That was very will said. The king Solomon reference at the end was particularly apt, as the result of said attempt might be equally horrible, if it was followed through with.
I've read about the differing approaches to CPSP before, and those differences were usually left unexplained, or glossed over as cultural, but your article does a much better job of explaining the difference in approach in a much less condescending way. Thank you.
Thank you for an extensive balanced article, Mr. LaGasse. Notwithstanding the other important procurements soon to be underway, the CPSP decision will be the most significant acquisition in a generation methinks. I hope to stick around for the first four!
South Korea has also clearly recognized that Canada is a strategic partner to be prioritized across many economic issues. This shared perspective is reflected in the active support of the South Korean government for Hanwha’s efforts to sell submarines to Canada. Beyond a simple commercial opportunity, this initiative is part of a broader logic of deep economic complementarity: the industrial strengths, technological capabilities, and natural resources of one closely mirror the weakness of the other, and vice versa.
In a global context marked by the reorganization of supply chains and the search for reliable partners, this structural alignment further reinforces the relevance of closer collaboration between the two countries, both in defense and in innovation, and general economic development.
A Google AI summary of the Hanwha Industrial and Economic Benefits to Canada Proposal Annex yields the following: Hanwha’s proposal for the Canadian Patrol Submarine Project (CPSP) centers on a $94.1 billion GDP impact and the creation of approximately 22,500 annual jobs between 2026 and 2044, with average salaries 17–28% above the national average.
The industrial benefits package includes several key commitments:
Steel Investment: A binding $345 million CAD agreement with Algoma Steel to develop a new structural steel beam mill in Sault Ste. Marie, Ontario, ensuring domestic steel supply for submarine construction and maintenance.
Vehicle Manufacturing: A promise to establish a joint venture with Canadian Automotive Manufacturers Association (APMA) members to manufacture armoured vehicles (including K9 howitzers and K2 tanks) in Canada if the submarine bid is won.
Sustainment Partnerships: Collaborations with Babcock Canada for long-term maintenance, repair, and overhaul (MRO) infrastructure, and PCL Construction for facility development.
Technology & Research: MOUs with companies like L3Harris Canada, PV Labs, and MDA Space, alongside academic partnerships with the University of Toronto, Dalhousie University, and the University of New Brunswick for AI, navigation, and Arctic technology.
Delivery Schedule: Delivery of four submarines by 2035 [first by 2032] and the full fleet of twelve by 2043, which Hanwha claims is the fastest timeline among competitors, saving an estimated $1 billion in early retirement costs for the Victoria-class fleet.
Just noted that South Korea signed an MOU with Alberta for defense cooperation and oh by the way reduced the Canadian crude tariff from 3% to 0. Hmm. One thing that I am sure running in the back channels of Australia is Hanwah poking them on the AUKUS mega billion deal for used subs if the US feels like it some day. Perfect fit for leverage when the US has stiffed Japan and PURL for hardware that had already been paid for. If Canada, Australia, Indonesia, and others can provide some weight to SK all the better. How can 408 million people be wrong?
Nice read. I suppose the average Canadian is not reading Lloyd's List on the regular, but it's worth tracking Hanwha, which is very much embedded into US defence via its subsidiary. Lessons to be passed on.
A major concern that receives little attention is the gap between Hanwha’s proven ability to export products from Korea, versus its limited unproven capacity to generate sustainable industrial and economic benefits through local manufacturing and sustainment commitments outside Korea in nations similar to Canada.
There is no credible explanation of how long‑term demand would be created whether through exports or solely domestic needs, nor how its localisation commitments will actually deliver value to the existing local industry.
Hanwha is now offering the same localised economic and export‑driven demand opportunities to the US and Europe that it previously promised Australia and is currently promising Canada across multiple domains. Yet Australia has received no export orders from its Hanwha vehicle production despite those commitments to date. Similarly, Hanwha’s pledge to make Poland the central hub for European missile exports has since been replicated in its pitch to Germany to secure further localisation deals.
This raises a core issue, how can Hanwha credibly assure each country that global oversupply will not erode demand and undermine the economic benefits it claims to deliver when it repeatedly shifts or duplicates its promises in pursuit of short‑term wins? Without demonstrated follow‑through on earlier commitments, the long‑term viability it advertises to Canada remains unproven and potentially a risk we really need to consider.
The European TKMS production queue is congested, and Canada is not at the front of it. It appears that Hanwha has the production capacity for better timeline and greater Korean industrial willingness than Europe right now.
Interesting! No one has considered the most important two factors in the decision: military operations requirements; and price/costs.
Assuming that the military arctic requirements will have some influence (guesstimate 30% of decision); and that life cycle costs are part of the cost analysis, TKMS should win the contract.
While the boats are similar, there are significant differences. Examples: the Hanwha vessel is approximately 25% larger and requires 40% more crew. This increases life cycle operational costs significantly. And there is the issue of under ice capabilities and experience.
Canada needs its submarines to also focus on blue-water capability in the Pacific and Atlantic. So, the KSS-III gets my vote especially since the KSS-III is built and already in service while the TKMS Type 212CD is not yet in the water.
My understanding/analysis is the opposite. The Hanwha boat is larger to accommodate the vertical launch of missiles (the TKMS boat doesn't have this armament). The larger size and additional armament means a larger crew resulting in larger life cycle costs over 30-40 years. My crew numbers are TKMS: 30-33 and Hanwha: 50.
I have no personal information on these vessels but I used good sources I believe. My analysis was based on my experience/background in the feds procurement and decision-making process. For example I assigned military ops requirements 30 %, and purchase price and life cycle costs 25%. The remaining 45% divided among about another ten factors.
The results based on my assumptions (the most important is meeting military requirements including under-ice capabilities), show that TKMS should win. I also did a Monte Carlo analysis (10,000 level). It confirmed TKMS unless military requirements dropped below 5-8 %.
If my information on the vessels specifications and manufacturer's experience are incorrect, then of course my conclusion is as well.
I’ll certainly not argue with your findings. I applaud the effort and analysis that you’ve put into your comment. It’s refreshing to have a discussion with someone who can reply with a thoughtful, respectful response. But the information provided on crewing that I’ve presented here was, according to sources, provided by the OEMs. As for the VLS tubes, I’m of the opinion that they are essential to carry the sub further into the 21st century, giving the CAF/RCN options that they really won’t understand the need until the submarine force matures and as new technologies evolve. Anyhoo, thanks for your comment.
Thanks Fraser. I did this pretty limited analysis out of curiosity only. And I'm a Canadian!
I did take another look at the crewing requirements from another source. This indicated that the Korean boat has a max crew capacity of 50 but can be operated with 30 depending on specialist (ops) requirements. So who knows? It probably depends on how important under-ice capacity and experience is to the decision team.
As to the VLS missiles, I can understand the Koreans need them given their neighbors. But I'm not sure we would use them. Washington?
That was very will said. The king Solomon reference at the end was particularly apt, as the result of said attempt might be equally horrible, if it was followed through with.
I've read about the differing approaches to CPSP before, and those differences were usually left unexplained, or glossed over as cultural, but your article does a much better job of explaining the difference in approach in a much less condescending way. Thank you.
Thank you for an extensive balanced article, Mr. LaGasse. Notwithstanding the other important procurements soon to be underway, the CPSP decision will be the most significant acquisition in a generation methinks. I hope to stick around for the first four!
South Korea has also clearly recognized that Canada is a strategic partner to be prioritized across many economic issues. This shared perspective is reflected in the active support of the South Korean government for Hanwha’s efforts to sell submarines to Canada. Beyond a simple commercial opportunity, this initiative is part of a broader logic of deep economic complementarity: the industrial strengths, technological capabilities, and natural resources of one closely mirror the weakness of the other, and vice versa.
In a global context marked by the reorganization of supply chains and the search for reliable partners, this structural alignment further reinforces the relevance of closer collaboration between the two countries, both in defense and in innovation, and general economic development.
A Google AI summary of the Hanwha Industrial and Economic Benefits to Canada Proposal Annex yields the following: Hanwha’s proposal for the Canadian Patrol Submarine Project (CPSP) centers on a $94.1 billion GDP impact and the creation of approximately 22,500 annual jobs between 2026 and 2044, with average salaries 17–28% above the national average.
The industrial benefits package includes several key commitments:
Steel Investment: A binding $345 million CAD agreement with Algoma Steel to develop a new structural steel beam mill in Sault Ste. Marie, Ontario, ensuring domestic steel supply for submarine construction and maintenance.
Vehicle Manufacturing: A promise to establish a joint venture with Canadian Automotive Manufacturers Association (APMA) members to manufacture armoured vehicles (including K9 howitzers and K2 tanks) in Canada if the submarine bid is won.
Sustainment Partnerships: Collaborations with Babcock Canada for long-term maintenance, repair, and overhaul (MRO) infrastructure, and PCL Construction for facility development.
Technology & Research: MOUs with companies like L3Harris Canada, PV Labs, and MDA Space, alongside academic partnerships with the University of Toronto, Dalhousie University, and the University of New Brunswick for AI, navigation, and Arctic technology.
Delivery Schedule: Delivery of four submarines by 2035 [first by 2032] and the full fleet of twelve by 2043, which Hanwha claims is the fastest timeline among competitors, saving an estimated $1 billion in early retirement costs for the Victoria-class fleet.
Just noted that South Korea signed an MOU with Alberta for defense cooperation and oh by the way reduced the Canadian crude tariff from 3% to 0. Hmm. One thing that I am sure running in the back channels of Australia is Hanwah poking them on the AUKUS mega billion deal for used subs if the US feels like it some day. Perfect fit for leverage when the US has stiffed Japan and PURL for hardware that had already been paid for. If Canada, Australia, Indonesia, and others can provide some weight to SK all the better. How can 408 million people be wrong?
Nice read. I suppose the average Canadian is not reading Lloyd's List on the regular, but it's worth tracking Hanwha, which is very much embedded into US defence via its subsidiary. Lessons to be passed on.
A major concern that receives little attention is the gap between Hanwha’s proven ability to export products from Korea, versus its limited unproven capacity to generate sustainable industrial and economic benefits through local manufacturing and sustainment commitments outside Korea in nations similar to Canada.
There is no credible explanation of how long‑term demand would be created whether through exports or solely domestic needs, nor how its localisation commitments will actually deliver value to the existing local industry.
Hanwha is now offering the same localised economic and export‑driven demand opportunities to the US and Europe that it previously promised Australia and is currently promising Canada across multiple domains. Yet Australia has received no export orders from its Hanwha vehicle production despite those commitments to date. Similarly, Hanwha’s pledge to make Poland the central hub for European missile exports has since been replicated in its pitch to Germany to secure further localisation deals.
This raises a core issue, how can Hanwha credibly assure each country that global oversupply will not erode demand and undermine the economic benefits it claims to deliver when it repeatedly shifts or duplicates its promises in pursuit of short‑term wins? Without demonstrated follow‑through on earlier commitments, the long‑term viability it advertises to Canada remains unproven and potentially a risk we really need to consider.
The European TKMS production queue is congested, and Canada is not at the front of it. It appears that Hanwha has the production capacity for better timeline and greater Korean industrial willingness than Europe right now.
Interesting! No one has considered the most important two factors in the decision: military operations requirements; and price/costs.
Assuming that the military arctic requirements will have some influence (guesstimate 30% of decision); and that life cycle costs are part of the cost analysis, TKMS should win the contract.
While the boats are similar, there are significant differences. Examples: the Hanwha vessel is approximately 25% larger and requires 40% more crew. This increases life cycle operational costs significantly. And there is the issue of under ice capabilities and experience.
Canada needs its submarines to also focus on blue-water capability in the Pacific and Atlantic. So, the KSS-III gets my vote especially since the KSS-III is built and already in service while the TKMS Type 212CD is not yet in the water.
Ditto
Au contraire. The KS-III requires a crew of 33. The TKMS 212CD is specified to take 30-50 crew, confined to a much smaller space. Sources are an AI search and this excellent analysis: https://www.michaeljlalonde.com/2025/09/15/which-submarine-should-canada-buy/
My understanding/analysis is the opposite. The Hanwha boat is larger to accommodate the vertical launch of missiles (the TKMS boat doesn't have this armament). The larger size and additional armament means a larger crew resulting in larger life cycle costs over 30-40 years. My crew numbers are TKMS: 30-33 and Hanwha: 50.
I have no personal information on these vessels but I used good sources I believe. My analysis was based on my experience/background in the feds procurement and decision-making process. For example I assigned military ops requirements 30 %, and purchase price and life cycle costs 25%. The remaining 45% divided among about another ten factors.
The results based on my assumptions (the most important is meeting military requirements including under-ice capabilities), show that TKMS should win. I also did a Monte Carlo analysis (10,000 level). It confirmed TKMS unless military requirements dropped below 5-8 %.
If my information on the vessels specifications and manufacturer's experience are incorrect, then of course my conclusion is as well.
I’ll certainly not argue with your findings. I applaud the effort and analysis that you’ve put into your comment. It’s refreshing to have a discussion with someone who can reply with a thoughtful, respectful response. But the information provided on crewing that I’ve presented here was, according to sources, provided by the OEMs. As for the VLS tubes, I’m of the opinion that they are essential to carry the sub further into the 21st century, giving the CAF/RCN options that they really won’t understand the need until the submarine force matures and as new technologies evolve. Anyhoo, thanks for your comment.
Thanks Fraser. I did this pretty limited analysis out of curiosity only. And I'm a Canadian!
I did take another look at the crewing requirements from another source. This indicated that the Korean boat has a max crew capacity of 50 but can be operated with 30 depending on specialist (ops) requirements. So who knows? It probably depends on how important under-ice capacity and experience is to the decision team.
As to the VLS missiles, I can understand the Koreans need them given their neighbors. But I'm not sure we would use them. Washington?