The Canadian government has chosen Germany's TKMS to construct its first significant submarine fleet, favoring NATO allies and European partners over South Korea's Hanwha.

Prime Minister Mark Carney announced the decision in Halifax, concluding a 10-month competitive process where both nations vied for economic benefits.The contract, worth up to $40 billion including operations and maintenance, will see Germany and Norway collaborate on building up to 12 submarines.Ottawa prioritized economic advantages over technical specifications, as both diesel-electric models met requirements.The decision aligns Canada with NATO, while South Korea, a non-member, was excluded.The announcement involved strict confidentiality measures due to commercial sensitivity, with TKMS shares rising sharply.Experts warn delays are common in defense procurements, though the long-term implications for Canada's naval strategy remain under scrutiny.