Canada aims for auto partnership with Korea in submarine procurement talks

Canada’s Secretary of State for Defence Procurement Stephen Fuhr, fifth from left, visits Hanwha Ocean’s Geoje shipyard located in South Gyeongsang Province, Monday, to inspect the ROKS Jang Yeong-sil, the lead vessel of the Jangbogo-III Batch-II submarine proposed for the Canadian Patrol Submarine Project. Courtesy of Hanwha Ocean

As Canada approaches the selection of a final contractor for the Canadian Patrol Submarine Project, valued at up to 60 trillion won (about $45 billion), its defense procurement chief visiting Korea called for expanded bilateral cooperation in the automotive sector as part of offset agreements linked to the deal.

Stephen Fuhr, Canada’s secretary of state for defense procurement, made the remarks Monday during a visit to Hanwha Ocean’s Geoje shipyard in South Gyeongsang Province, touring the facilities with a delegation of about 30 Canadian government and shipbuilding industry officials. The delegation also included representatives from major Canadian shipyards, including Ontario Shipyards, Irving Shipbuilding, Davie and Seaspan Shipyard, highlighting deepening bilateral cooperation in the shipbuilding and maritime defense sectors.

Fuhr boarded the ROKS Jang Yeong-sil, a 3,600-ton-class Jangbogo-III Batch-II submarine currently undergoing sea trials, to assess the vessel’s capabilities firsthand. Hanwha Ocean CEO Kim Hee-cheul, along with senior Korean government officials such as Vice Minister of National Defense Lee Doo-hee, guided the inspection.

Following the tour, Fuhr described the visit as “an impressive experience,” praising the submarine’s internal systems and technological sophistication.

Fuhr emphasized that broader economic cooperation, particularly in the automotive and mobility sectors, should be a central part of the submarine offset package. He noted that both Korea and Germany, the two shortlisted bidders, are major car manufacturers, adding that collaboration in these areas could deepen bilateral economic ties well beyond defense.

Canada’s search for a new submarine fleet has become a high-stakes exercise in industrial strategy. By linking the $45 billion project to offset requirements, Ottawa is signaling that the winning bidder — likely Korea or Germany — must deliver more than maritime security. It must help bolster Canada’s automotive future.

Once estimated at 12 trillion won to 20 trillion won, the CPSP has been reassessed at around 60 trillion won after accounting for more than 30 years of maintenance, repair and overhaul, long-term logistics support and lifecycle sustainment. South Korean shipbuilders Hanwha Ocean and HD Hyundai Heavy Industries are competing against German firms for the contract, which would be the largest defense procurement project in Canadian history.

The urgency of the program is underscored by the condition of the Royal Canadian Navy’s four Victoria-class submarines, acquired secondhand from the United Kingdom in the late 1990s. Aging-related issues have significantly constrained operational availability, often limiting deployments to a single submarine at a time.