South Korea is making a high-stakes push to win the Canadian submarine contract bid—a deal worth over US$12 billion. On Monday, Presidential Chief of Staff Kang Hoon-sik flew to Canada with executives from Hyundai Motor and shipbuilders Hanwha and HD Hyundai. Their mission: secure a contract to build up to 12 diesel-powered submarines for the Royal Canadian Navy.
Canada is modernizing its aging fleet of four 1990s-era subs. As a NATO member with the world’s longest coastline—including Arctic waters—it needs advanced underwater surveillance and deterrence capabilities. The project is one of the largest defense procurements in Canadian history.
But South Korea faces tough competition. Germany’s TKMS (ThyssenKrupp Marine Systems) is also in the race. “We’re up against a manufacturing superpower,” Kang admitted. “The prospects are not necessarily easy.”
Still, Seoul is pulling out all stops. Kang said he plans to “directly convey the excellent performance of our submarines” and highlight South Korea’s commitment to deeper industrial and security ties with Canada. He’s traveling with Industry Minister Kim Jung-kwan—and notably, Hyundai Motor Group Executive Chair Euisun Chung.
Why is Hyundai involved? Because Canada wants more than submarines—it wants economic offsets. Earlier this month, Kang revealed that Canadian officials asked Hyundai to build a car plant locally. While Hyundai clarified it has “no current plans” for a Canadian factory, it is exploring cooperation in hydrogen and other strategic sectors.
Meanwhile, Hanwha Group pledged to create thousands of Canadian jobs by 2040 through partnerships in defense and beyond. Business leaders from both countries will meet this week to discuss collaboration in submarines, batteries, and clean tech.
For South Korea, the stakes are huge. Winning the Canadian submarine contract bid would deliver an estimated 40 trillion won (US$27.6 billion) in economic benefits and create 20,000 jobs. It would also mark a major leap toward President Lee Jae Myung’s goal of building the world’s fourth-largest defense industry—critical amid North Korea’s growing nuclear threat.
Germany isn’t backing down either. TKMS CEO Oliver Burkhard recently said his firm is crafting a multibillion-dollar investment package with Norwegian and German partners to sweeten its offer.
In short, this isn’t just about submarines—it’s about strategic alliances, industrial policy, and global influence. As Kang put it: “This bid is about more than defense. It’s about partnership.”
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