Canadian Prime Minister Mark Carney announced on Monday that he is awarding a multi-billion dollar contract to build up to 12 new submarines for Canada to a German-Norwegian bid led by Thyssenkrupp Marine Systems. The deal, the largest defence procurement in Canadian history, promises a badly needed boost for Germany’s ailing economy and represents a down payment on a new transatlantic relationship.
Strategic project binding Canada, Germany, and Norway
“Ahead of the NATO summit beginning tomorrow, the Canadian government is sending a strong signal of transatlantic and European cooperation in the defence industry,” German Chancellor Friedrich Merz said in a statement Monday night. “This is a major strategic project that will bind Canada, Germany, and Norway together for decades.”
As a result of the deal, Germany, Canada, and Norway may eventually be able to deploy a fleet of up to 24 identical submarines, particularly designed to boost their presence in the Arctic. The contract is a sign that Carney is making good on his pledge to build a new, deeper relationship with Canada’s European allies as a bulwark against the instability of President Donald Trump’s second term.
Carney’s vision for middle powers
In a now famous speech in Davos, Carney argued that middle powers like Canada and members of the European Union need to work together to defend their common interests because the most powerful countries no longer respect the rules-based order. Since then, Germany has agreed to buy one million metric tons of LNG a year from Canada for 20 years from the early 2030s, and Carney met with Merz at a NATO exercise in Norway. Canada is also the only non-European country to join the EU’s military procurement program known as SAFE.
Timing underscores commitment amid US pullback
The timing for the submarine announcement appears designed to underline Canada’s commitment to its European allies at a moment when the United States is dialing back its presence on the continent. NATO Secretary General Mark Rutte on Tuesday unveiled a raft of defence contracts designed to demonstrate to Trump that European nations are delivering on their pledge to ramp up their capabilities.
Merz’s relations with the U.S. president have proven bumpy despite a promising start after both took office early last year. The two leaders held a phone call last Friday after Trump had accused Germany of not doing enough for its defence. The chancellor made clear to him that Trump was basing his criticism on outdated numbers, the chancellery said.
Building a European NATO
“We are building a European NATO so that NATO can remain transatlantic,” Merz said before his departure at the Berlin airport. “And this is welcome news — not only from an economic perspective.”
The submarine deal is the latest in a series of steps strengthening ties between Canada and European allies, reflecting a broader realignment of defence and economic partnerships in response to shifting US foreign policy.
