Real work ‘begins now,’ says TKMS CEO after being named preferred sub bidder

OTTAWA — The CEO of the German defence firm that was named the preferred bidder in the competition to build Canada’s next fleet of submarines this week said negotiations to formalize the contract will move quickly.

Germany’s TKMS took a brief moment to celebrate after the announcement Monday but CEO Oliver Burkhard said the real work is now about to begin.

Prime Minister Mark Carney said Canada’s new Defence Investment Agency will lead the negotiations with the submarine maker as the two sides nail down the details of the final cost, delivery schedules and industrial benefits.

As he announced the next phase of the country’s largest-ever military procurement project in Halifax on Monday, Carney said the talks could take somewhere between six and 18 months.

Burkhard said he’s hopeful things could move faster.

“A lot has been already negotiated between Germany, Norway, and us as an industry player. So I think Canada can, to say it a bit simple in my words, copy and paste a lot of that,” he said in an interview on Tuesday in Ottawa.

The competition between TKMS and its partners, the governments of Germany and Norway, and South Korea’s Hanwha Oceans was intense and, unusually, played out in public through sponsorships and advertising campaigns in Canada.

Ottawa selected the two bidders in 2025, setting unusually tight deadlines that moved the process along at “light speed,” Burkhard said.

The CEO said the approach from the German and Norwegian governments was something he’d never seen before, either: putting another government “into a partnership where everybody is on eye level.” He attributed the new industrial policy approach to shifting geopolitical realities.

“German politicians are normally quite shy when it comes to defence business,” he said. “But this has changed, through the outbreak of the Ukraine war.”

Canada plans to purchase a fleet of up to 12 submarines — a significant upgrade from its current four. Those Victoria-class submarines were built in the late 1980s and 1990s and are set to be retired from service by 2035.

Retired vice-admiral Mark Norman said because of the way subs are rotated through maintenance, training and deployment, a fleet of up to 12 would allow Canada to have three or four boats in active use at a time — something he said is essential for the country with the world’s longest coastline.

“We have been negligent, to put it bluntly, for decades about protecting our own approaches,” he said in an interview on Monday.

Norman and other analysts said the contest was extremely close.

“There was no slam-dunk obvious choice here,” he said.

Paul T. Mitchell, a professor of defence studies at Canadian Forces College, said the Koreans “threw everything at this particular procurement” and said he expected them to be disappointed by Monday’s decision.

Carney, too, seemed to try to soften the blow by praising the Hanwha bid and emphasizing that he planned to meet South Korean President Lee Jae Myung on the sidelines of the NATO summit in Turkey this week.

That blow had immediate impacts however. Shares of Hanwha Ocean tumbled nearly 23 per cent in trade on the Korea Exchange Tuesday following the news the submaker was not selected as the preferred bidder.

In a social media post on Tuesday after the meeting, Carney said he and Lee were working to deepen their countries’ trade and investment relationship in sectors like energy, critical minerals and defence.

“Together, there is much more we can do to build a more prosperous, more secure future for both our peoples,” Carney’s post said.

The prime minister talked up the TKMS 212CD submarine’s stealth and Arctic capabilities and emphasized that it can operate alongside NATO allies.

In a statement to Korean media, Hanwha Ocean said it was “unable to overcome the wall of the NATO alliance.”

Canada’s submarine pact was promoted by Prime Minister Mark Carney, German Chancellor Friedrich Merz and Norwegian Prime Minister Gahr Store, who held a meeting on the sidelines of the NATO summit Tuesday.

Carney said the decision by Canada to pursue a contract with TKMS, which will create “very high quality jobs in all of our countries,” was taken within a year rather than by the end of the decade because of the “urgency of the situation” and the “threats that we face.”

“It is a great day for all of us and a great day for NATO,” he said.

Store said it was a “huge” decision and it speaks to swift action under Carney’s leadership. He said the three subs can operate in an integrated way — saying the three countries will have 26 subs in the water combined.

“This is the new way NATO will work. This is great. Our people from the navy can exchange and visit each others’ ships, they can integrate strategy,” he said.

Vina Nadjibulla, vice-president of research and strategy at the Asia-Pacific Foundation of Canada, said that is something the South Korean company has been trying to do for several years.

But she said the campaign Hanwha and the South Korean government launched through the bid process resonated outside Canada, too.

“It has introduced Hanwha as well as South Korea as a major defence and strategic partner for Canada. A lot more Canadians now know about South Korea,” she said.

Nadjibulla said Canada should build on the momentum of this process, noting South Korea has a strong defence industry.

“I see this as an opportunity to continue to deepen the partnership including in the defence sector,” she said.

This report by The Canadian Press was first published July 7, 2026.

Sarah Ritchie, The Canadian Press