Korea mounts final push for Canada's $39 bil. submarine project

Korean and Canadian naval submariners pose on a deck of the Republic of Korea Navy's 3,000-ton Dosan Ahn Chang-ho submarine at Canadian Forces Base Esquimalt in Victoria, Canada, June 2. Yonhap

The Korean government and defense players are making last-ditch efforts to win Canada’s next-generation submarine project worth up to 60 trillion won ($39.14 billion), as Ottawa is expected to select a preferred bidder by the end of this month.

Under the Canadian Patrol Submarine Project, the Royal Canadian Navy’s aging fleet of four Victoria-class submarines will be replaced with 12 new 3,000-ton diesel-electric vessels. The comprehensive contract includes long-term maintenance, repair and overhaul (MRO) lifecycles.

With a decision looming, Seoul has elevated its bid to top-tier head-of-state diplomacy, seeking to give Korea’s consortium, led by Hanwha Ocean, an edge over rival bidder TKMS of Germany — a traditional heavyweight in submarine technology — in the closely contested race.

President Lee Jae Myung recently provided critical diplomatic backing during a bilateral summit with Canadian Prime Minister Mark Carney on the sidelines of the Group of Seven summit in Evian-les-Bains, France. Lee said he emphasized Korea’s readiness to contribute to Canada’s defense capabilities, but acknowledged during a Friday press conference that the outcome remains difficult to predict.

Hanwha Ocean’s bid centers on the 3,000-ton Dosan Ahn Chang-ho, a KSS-III class submarine built by its predecessor Daewoo Shipbuilding & Marine Engineering. The company has proposed delivering the first four vessels to Canada by 2035 and completing all 12 by 2043.

Unlike TKMS’ paper design, the KSS-III’s key selling point is its proven track record, as it is already actively deployed and operated by the Republic of Korea Navy.

A Royal Canadian Navy submariner boards the Republic of Korea Navy's 3,000-ton Dosan Ahn Chang-ho submarine during a joint naval drill at Canadian Forces Base Esquimalt in Victoria, Canada, June 2. Yonhap

Moon Keun-sik, a professor at Hanyang University’s Graduate School of Public Policy and a former Korean submarine captain, believes Seoul holds a slight technological edge.

"In terms of submarine performance and operational combat capability, Korea is on par with or slightly ahead of Germany," Moon said. "The Dosan Ahn Chang-ho is a proven, operational 3,000-ton vessel, whereas Germany would have to build its proposal from scratch."

While technical specifications account for roughly 20 percent of Canada's evaluation, the remaining 80 percent hinges on such factors such as MRO capabilities and industrial cooperation — areas in which Hanwha also believes it has a competitive edge.

"The Korean government’s recent strong commitment to supporting the hydrogen and energy sectors with Canada may tip the scales in our favor," he said, adding that recent joint naval drills involving the Korean Navy’s Dosan Ahn Chang-ho in Canadian waters have generated highly favorable sentiment among both the Canadian public and military.

The Republic of Korea Navy's 3,000-ton Dosan Ahn Chang-ho submarine is docked at Canadian Forces Base Esquimalt in Victoria, May 25. Yonhap

However, Moon cautioned that Germany and Canada's shared NATO membership remains a significant political obstacle for Seoul.

To offset that disadvantage, the Hanwha-led "Team Korea" has pitched an extensive industrial cooperation package spanning hydrogen, liquefied natural gas, aerospace and crude oil, backed by roughly 75 memorandums of understanding signed with Canadian firms.

Most notably, Seoul unveiled Hyundai Motor Group's Project Beaver investment initiative worth around 4 trillion won. Under the proposal, the Korean carmaker would establish a comprehensive hydrogen mobility ecosystem — including hydrogen liquefaction plants, fueling stations and a hydrogen truck manufacturing facility — in Canada, if Korea secures the submarine deal.

Yang Uk, a research fellow at the Asan Institute for Policy Studies, questioned whether Korea’s proposal aligns with Canada's strategic goals.

"Canada's primary concern goes beyond mere hardware manufacturing," Yang said.

"They seek deeper naval cooperation and interoperability across the Arctic region. Germany already maintains robust naval ties with Canada under the NATO framework in the area. Against the backdrop, Berlin remains better positioned than Seoul in terms of both long-term naval cooperation capacity and strategic alignment."