Canada selected a German-Korean partnership led by ThyssenKrupp Marine Systems (TKMS) to supply its new submarine fleet on July 6, 2024 [1].

The decision effectively ends the prospect for Algoma Steel, based in Sault Ste. Marie, Ontario, to provide steel for the Royal Canadian Navy. The company had been tied to a competing South Korean bid that was ultimately rejected by the federal government.

Defence Minister Anita Anand said the government chose the German-Korean partnership because it offers the best capability for Arctic operations and aligns with NATO commitments [2]. Officials said overall cost-effectiveness was a primary driver for the selection [3]. The procurement program is estimated to be valued at C$30 billion [4].

For the community of Sault Ste. Marie, the loss of the contract is seen as a significant economic blow. MP Terry Sheehan said the decision is a major blow to Algoma Steel and the Sault Ste. Marie community [5].

Deliveries of the new vessels are planned to begin by 2034 [2]. The transition to the new fleet is intended to modernize Canada's naval presence in the North, where operational capability is increasingly critical for national security.

Algoma Steel expressed disappointment regarding the outcome of the bidding process. A spokesperson for Algoma Steel said the company will explore other opportunities to support Canadian defence procurement [6].

“The decision is a major blow to Algoma Steel and the Sault Ste. Marie community.”

This procurement choice reflects a strategic pivot toward NATO interoperability and specialized Arctic warfare capabilities over domestic industrial gains. By prioritizing the TKMS partnership, Canada is securing hardware specifically designed for cold-water environments, though it sacrifices a significant opportunity to integrate Ontario-based steel production into a multi-billion dollar defense project.