In a strategic move to bolster its naval capabilities, the Canadian government is working toward purchasing new submarines for its fleet, and a significant proposal from South Korean shipbuilders Hanwha Ocean and HD Hyundai Heavy Industries (HHI) is on the list of potential providers.
This development comes as Hanwha Ocean announced the opening of a new office in Canada, signaling a deepening commitment to the Canadian market and its defense needs. The proposal, valued at an estimated $20 billion to $24 billion, could reshape Canada’s underwater defense strategy and enhance its maritime presence across its three coasts.
In early March 2025, Hanwha Ocean and HHI, typically fierce competitors, joined forces to submit an unsolicited yet highly detailed proposal to the Canadian government. The proposal outlines the delivery of 12 KSS-III diesel-electric attack submarines by 2035, designed to meet Canada’s need for a modernized, capable submarine fleet. The KSS-III, already in service with the Republic of Korea Navy (ROKN), is a state-of-the-art vessel displacing approximately 3,600 tonnes, equipped with advanced lithium-ion battery technology and air-independent propulsion (AIP) systems. These features enable extended submerged operations—up to 21 days—making the KSS-III particularly suited for Canada’s vast Arctic waters and long-range maritime patrols.
The South Korean offer goes beyond just supplying submarines. It includes plans to establish specialized maintenance facilities on Canada’s east and west coasts, alongside the recruitment and training of local personnel. This comprehensive approach aims to create a sustainable ecosystem for submarine operations, fostering long-term economic benefits through job creation and technology transfer. Hanwha Ocean’s new office in Canada, as reported by Baird Maritime, underscores this commitment, serving as a hub to facilitate collaboration with Canadian stakeholders and support the proposed submarine program.
The KSS-III submarines are a compelling option for Canada’s Patrol Submarine Procurement (PSP) project, launched by the Canadian Department of National Defence in July 2024. Unlike Canada’s current fleet of four aging Victoria-class submarines, which have faced operational and maintenance challenges, the KSS-III offers cutting-edge technology and proven reliability. Powered by lithium-ion batteries developed by Samsung SDI, the submarines boast greater cruising speeds and longer submerged endurance, critical for covert operations in Canada’s expansive maritime domain. The vessels are also equipped with an all-Korean-designed combat-management system, offering Canada the flexibility to integrate its own systems or opt for Korean-made torpedoes and submarine-launched ballistic missiles (SLBMs).
With a standard crew of 33 sailors, the KSS-III incorporates a high degree of automation, reducing operational demands while maintaining robust capabilities. Its ability to fire torpedoes and SLBMs enhances Canada’s capacity to deter maritime threats, control approaches, and project power far from its shores. The submarines’ 19,000-kilometer cruising range and 20-knot submerged speed further align with Canada’s need for a versatile, long-range fleet capable of operating in diverse environments, from the Atlantic to the Arctic.
The South Korean proposal arrives at a pivotal moment for Canada, as it seeks to modernize its navy amid growing geopolitical tensions and increasing maritime activity in the Arctic. The PSP project aims to replace the Victoria-class submarines with a larger, more capable fleet to address emerging threats and assert sovereignty over Canada’s maritime approaches. Hanwha Ocean and HHI’s unsolicited bid stands out among expressions of interest from shipyards in Germany, Norway, and Spain, as it offers not only advanced technology but also a clear plan for local investment.
While the South Korean proposal is compelling, it faces competition from European shipbuilders, and the Canadian government has yet to issue a formal request for proposals. Questions remain about the integration of Canadian or foreign combat systems, the total cost of ownership, and the timeline for delivery. Additionally, the unsolicited nature of the bid may require careful evaluation to ensure alignment with Canada’s defense priorities and procurement processes.