Canada has chosen German company TKMS to build new submarines.

The Canadian government has selected a German defense company to build the new submarines in one of Canada’s top military procurement deals.

Prime Minister Mark Carney announced last Monday that the government had selected TKMS for the multibillion-dollar, 12-ship contract.

The announcement comes before Carney heads to Turkey for a NATO summit, where members are expected to be under pressure to show they are increasing their defense investment.

Since taking office, Carney has committed to reducing Canada’s defense spending from 2 percent of GDP to 5 percent by 2035.

In Halifax, Nova Scotia, Monday, Carney said the government will negotiate with TKMS to sign a contract, which could take several months.

“This project is about more than finding submarines,” Carney said. “Building Canada’s Industrial Capacity.”

TKMS – the world’s largest manufacturer of non-nuclear submarines – was competing with South Korea’s Hanwha Ocean Shipbuilding Company to bid for the ship.

The latest submarines are part of Carney’s efforts to increase military spending and strengthen the country’s maritime sovereignty, particularly in the Arctic.

It is remembered that the US President Donald Trump pressured the 32 members of the NATO military alliance to increase defense spending.

Canada has announced it will seek a contractor to build the new submarines in July 2024, with Carney saying he will decide the winner this June for the country’s aging Victoria-class fleet, bought in 1998.

David Perry, president of the Canadian Institute of Global Affairs, said the submarine contract gives Carney “great credibility” in his efforts to ensure that defense spending is increased.

“He decided to move the project on a very accelerated schedule — remarkably fast by Canadian standards and seems to have delivered,” he said. “This project will accelerate our core defense as a result.”

Perry said that the Canadian government is focused on awarding the contract to a country that wants to create a strategic partnership. Carney has sought to strengthen economic and security ties with Europe as Canada faces trade tensions with the US, its longtime ally to the south.

TKMS has submitted its bid to work with Norway on an agreement that will allow Canada to undertake “a low-risk, NATO-aligned and economically transformative solution” for joint maintenance and repair, training, logistics and operations.

Perry added that the new ships would give Canada a “huge boost” in maritime capabilities.

“It should allow three submarines to operate safely at any given time,” Perry said. “This is a significant increase in capability for an infrequently operated submarine, which has been our reality for many years.”

According to the Canadian government, the new submarines – which are conventionally operational and capable of operating under the ice – are critical to the security and sovereignty of the country with the world’s largest coastline.