South Korea’s defence giant Hanwha Aerospace is raising the stakes in Canada’s massive submarine competition by offering to manufacture armoured military vehicles in Canada if it wins the contract to build the next fleet of submarines for the Royal Canadian Navy.
The move comes as Canada weighs bids for a project valued at more than $100 billion, including long-term maintenance over three decades. The Canadian Armed Forces is seeking up to 12 new diesel-electric submarines to modernize its naval capabilities.
Hanwha has reportedly signed a partnership agreement with the Automotive Parts Manufacturers’ Association to produce K9 armoured vehicles in Canada for export markets if its KSS-III submarine proposal is selected. Company sources say the manufacturing plan is entirely tied to winning the submarine deal.
The offer is designed to appeal to Ottawa’s growing focus on domestic economic benefits, job creation and industrial capacity. Canada had requested stronger commitments to local manufacturing and workforce development as part of the revised bidding process.
Hanwha’s K9 artillery platform is already used by several NATO countries including Poland, Norway, Romania and Estonia. Other nations such as Australia, Egypt and Vietnam have also placed orders.
Sources say the Canadian manufacturing arrangement could eventually expand beyond K9 vehicles to include other Hanwha systems such as the Chunmoo rocket launcher and additional defence equipment.
The competition has narrowed to Hanwha and Germany’s Thyssenkrupp Marine Systems (TKMS). Earlier this month, the Defence Investment Agency extended the bidding deadline by three weeks, giving both firms time to improve their industrial and economic offers.
Under the evaluation system, long-term fleet support and sustainment account for half the scoring, while strategic and economic partnerships represent another major factor. That means creating jobs, building supply chains and establishing Canadian production could be decisive.
For Canada, the decision is about more than submarines. It is also about whether one of the country’s biggest defence procurements can become a catalyst for advanced manufacturing, skilled jobs and long-term industrial growth.