Three South Korean firms, in collaboration with government backing, have unveiled an ambitious plan for Canada worth up to $20 billion aimed at modernizing submarines, artillery, and armored vehicles.
It was reported that this initiative marks a rare instance of teamwork among competitive Korean companies and the Seoul government, with the proposal being initiated by the Koreans rather than at Canada’s request.
The entire deal could escalate to around $25 billion, especially if Hanwha Ocean and Hyundai end up replacing Canada’s aging submarine fleet and establishing a new maintenance facility for submarines.
Canada boasts the world’s longest coastline but currently operates a fleet of four aging Victoria-class submarines dating back to the early 2000s. Last July, the government led by then-Prime Minister Justin Trudeau expressed interest in modernizing this fleet with 12 new, non-nuclear submarines, emphasizing better maneuverability under Arctic ice as a critical feature.
The KSS-III design, known as Dosan Ahn Changho, aligns with Canada’s requirements. This class of submarine offers the ability to travel under ice and launch land-attack cruise missiles—traits that enhance stealth compared to existing Canadian subs.
Reports indicated that Hanwha and Hyundai provided Canada with a “detailed joint presentation,” promising to deliver four new submarines by 2035.
Additionally, Hanwha Aerospace, a partner company of Hanwha Ocean, proposed a $1 billion plan to upgrade Canadian artillery and armored vehicles, potentially delivering high performance at competitive prices.
“We don’t envision this as a one-time transaction between our two nations. Should we make a successful sale, our objective will be to bolster the capabilities of Canada’s defense sector and further defense collaboration,” a spokesperson noted.
This opportunity for South Korea to forge ties with Canada was, in part, attributed to former President Donald Trump’s remarks about Canada. It seems that these sentiments persist, and they have influenced Canadian defense strategies over time.
Now, with Prime Minister Mark Carney in office, Canada is exploring other military suppliers as relations with the U.S. take a downturn. A key project under scrutiny is the controversial $19 billion F-35 fighter initiative.
Defense Minister Bill Blair recently stated his intention to seek alternatives to the F-35. While acknowledging a commitment to purchase 16 of the jets, he hinted that the Saab Gripen F-39, a rival to the F-35 during the selection process, could emerge as a viable option going forward.
Meanwhile, South Korea’s aerospace firm, KAI, has put forth the F-50 fighter jet as an alternative, although it hasn’t included specifics alongside the proposals from Hanwha Ocean, Hanwha Aerospace, and Hyundai Heavy Industries.
The F-50, Korea’s first domestically produced light attack aircraft, was designed to integrate with American systems, which South Korea heavily relies upon. While it lacks the sophistication and stealth of the F-35, it is significantly more affordable to manufacture.
According to analysis, despite potential friction from Canadian reactions to Trump, South Koreans feel optimistic about securing contracts due to concerns over European supply chains for defense needs.
South Korea, under former President Yook Yeol, aimed to position itself as a top-tier weapons supplier, especially following the shift in demand that saw countries like Poland looking toward Korea for defense procurement instead of European firms.
Dave Perry, from Canada’s Institute of Global Affairs, noted that Poland’s swift military reconstruction using South Korean equipment has garnered significant attention in Ottawa.
“Canada’s military is currently facing substantial operational readiness issues. They need solutions that can address at least some of their urgent procurement needs without delay,” Perry remarked.
