A submarine economic boom is just around corner. So are the challenges.

Both qualified bidders offered multiple partnerships with Canadian companies in their heated, high-stakes race for the multi-billion dollar contract to manufacture up to 12 submarines.

Secretary of State for Defence Procurement Stephen Fuhr said Monday Ottawa has been squarely focused on the economic benefits that would flow from either bid, since both of the boats on offer meet all the navy’s requirements.

“We’ll go from two qualified suppliers to a preferred supplier, and the government of Canada will enter into contract negotiations with the preferred supplier so we can turn lots of MOUs and promises into tangible outcomes for Canada,” Fuhr told journalists on a call from Australia on Monday morning.

The Liberal government is expected to announce a preferred bidder within the next two weeks, ahead of the NATO summit that starts July 7.

Once a preferred bidder is selected, the government will enter into months of contract negotiations.

Daniel Kerry, a consultant with Deloitte who worked on the U.K.’s submarine program, said the contract talks will be followed by a “high amount of activity across everything from supply chains, to the crew, to the infrastructure that’s required, through to component parts.”

Competing shipyards promise economic benefits

Both of the competing shipyards — South Korea’s Hanwha and Germany’s TKMS — have promised billions of dollars in economic returns for Canada, although the bids they submitted in March remain confidential.

Hanwha has campaigned aggressively with pitches to help tariff-affected industries such as steel and auto manufacturing.

The Korean firm has said it can provide $70 billion in economic opportunities, about 500,000 jobs from 2026 through to 2044, and some $100 billion in GDP.

TKMS has pledged $160 billion in economic activity, $86 billion in GDP and more than 650,000 jobs over the course of the entire project. It has said the biggest impacts on job creation would be felt over the first five to seven years of the contract.

Hanwha reached 67 agreements with multiple Canadian companies, including PCL Construction, BlackBerry and Ontario Shipyards, and signed agreements with various levels of government.

While TKMS has announced far fewer partnerships, it insists it’s focused on quality over quantity and some of the key partnerships in its bid have not yet been publicly reported.

The German firm has touted agreements with EllisDon, Marmen and Seaspan. Some Canadian companies such as CAE and Cohere opted to partner with both bidders.

Government incentives boost bidding competition

The shipyards’ respective governments also upped the ante. South Korea has offered billions of dollars in incentives, including one pitch to build hydrogen freight trucks and charging stations in Canada under a plan to be called “Project Beaver.”

Germany also has proposed a series of investments and Norway, a partner nation in the 212CD sub program, has offered up the designs for its own submarine facility so that Canada can build copies on either coast.

Long-term servicing focus in bid evaluations

The federal government has said that in evaluating the two bids, it has put most of its emphasis on plans for the long-term servicing of the submarines over the coming decades. The navy has struggled to keep up maintenance of its current fleet.

Ottawa has said its scoring of the bids breaks down to 50 per cent for sustainment, 20 per cent for submarine capabilities, 15 per cent for cost and 15 per cent for economic benefits and strategic value.

Since Ottawa will be forced soon to retire its Victoria class submarines, which are quickly approaching the end of their lifespans, the bidders pitched delivery times in the early 2030s. That means Canada has little time to build the needed support infrastructure.

“This is where I think you will probably see the most obvious activity the earliest,” said retired navy officer Darren Hawco, who also works with Deloitte.

The navy will need to review the size and depth of its harbours and the construction of new jetties will require years of work, Hawco said.

Skilled labour shortages may impact construction

The construction and operation of specialized maintenance facilities on both coasts will also require a large, skilled workforce of pipe fitters, welders and maritime electrical specialists. Experts say that could pose a serious challenge, since workers in many marine trades are in short supply.

That need for skilled labour could also create tensions with the shipbuilding industry if federal projects end up poaching workers from shipyards. Irving already has wondered aloud where the federal government expects to find its workforce.

Training demands increase for naval personnel

Paul Mitchell, a professor at Canadian Forces College and an expert on submarines, said the success of the program will be decided not in the depths, but on land.

“It’s mostly about how we staff and fund our shore establishments, the schools, the engineering management, the fleet maintenance facilities, the ability of industry to hire very, very arcane types of technological skill sets, which are actually in competition with things like pipelines,” he said.

“The kind of welding skills that you need to work on a submarine are exactly the same kind of skills needed to work on a pipeline.”

Ottawa also will need to rapidly ramp up the number of sailors, trades and personnel involved in sustainment, he said, as the submarine program grows rapidly.

That will mean more demands on training schools as more students move through the system.

This report by The Canadian Press was first published June 23, 2026.