South Korea, ranked the world’s fifth most powerful military in the Global Firepower Index 2026—behind only the United States, Russia, China and India—is rapidly consolidating its position as one of the world’s most dynamic defence export powers. That ambition was on full display this week as a high-level South Korean delegation travelled to Canada to press Seoul’s case for one of the most lucrative naval contracts currently on offer globally.
The delegation, led by Presidential Chief of Staff Kang Hoon-sik, includes senior government officials and top executives from South Korea’s leading shipbuilders. Its mission is to underline Seoul’s full political and industrial commitment to winning Canada’s Canadian Patrol Submarine Project (CPSP), a programme aimed at replacing the Royal Canadian Navy’s (RCN) ageing Victoria-class submarines.
Canada plans to procure up to 12 diesel-electric submarines with specialised under-ice capabilities, a requirement driven by Ottawa’s growing focus on Arctic security and three-ocean operations. The CPSP is widely seen as one of the most technically demanding conventional submarine tenders in the world, given Canada’s need to operate simultaneously in the Pacific, Atlantic and Arctic theatres.
Ahead of the visit, South Korea’s Hanwha announced a sweeping industrial benefits package that proposes partnerships with major Canadian firms, including Algoma Steel, Telesat, MDA Space, Cohere and PV Labs. The initiative is intended to anchor the submarine bid within Canada’s domestic industrial ecosystem, while also strengthening lobbying efforts by promising long-term job creation and technology cooperation.
The South Korean push comes months after Canadian Prime Minister Mark Carney down-selected Germany’s Thyssenkrupp Marine Systems (TkMS) and South Korea’s Hanwha Ocean Co., Ltd. in August 2025 as the two finalists for the CPSP. Other contenders—including Saab’s oceanic A26, Navantia’s S-80 Plus and Naval Group’s Blackfin Barracuda—were eliminated after detailed technical and operational assessments.
At the time, Carney emphasised that the narrowing of the field reflected the exceptional demands placed on the RCN. “In Canada, submarine means weeks under the sea ice, as well as in the Pacific at the same time,” he said, noting the requirement for year-round deployments under extreme conditions on all three coasts. According to Carney, only two consortia ultimately met those standards.
The prime minister has since indicated that Ottawa wants to accelerate the acquisition, with a final decision expected by the end of this year. The timing is politically and strategically sensitive, coinciding with rising tensions between Canada and the United States. Relations have been strained by US President Donald Trump’s tariffs on Canadian goods and repeated rhetoric about Canada’s future within a continental US framework.
Trump recently threatened to impose 100 percent tariffs on Canadian imports should Ottawa conclude a trade deal with China, which is currently under negotiation. Separately, his remarks about Greenland and suggestions that Canada could become the 51st US state have unsettled policymakers in Ottawa, with reports indicating Canadian forces are, for the first time in a century, quietly reviewing contingencies involving the United States.
Against this backdrop, South Korea’s pitch goes well beyond submarines alone. Last year, Hanwha Defence and Hyundai Heavy Industries presented Canada with a broad proposal to modernise its depleted armed forces. The package included submarines, artillery systems, armoured vehicles and comprehensive training and support arrangements.
At the centre of the offer is the KSS-III submarine, developed jointly by Hanwha Ocean and Hyundai Heavy Industries, alongside the K9 Thunder self-propelled howitzer and a range of modern armoured vehicles. South Korean defence firms have already established a strong export record, supplying systems to countries such as India, Poland, Australia, Finland, Norway, Estonia, Turkey and Egypt.
The K9 Thunder has been particularly successful, with more than 1,800 units in service across 11 countries, giving it over 50 percent of the global self-propelled artillery market. The broader Canadian proposal reportedly also includes the K239 Chunmoo Multiple Launch Rocket System, the K21 Infantry Fighting Vehicle, K10 ammunition resupply vehicles and associated artillery support systems.
Crucially, Seoul’s bid enjoys full backing from the South Korean government, which views Canada as a strategic partner in expanding its global defence footprint. Earlier reports suggested the offer could include local maintenance and manufacturing facilities in Canada, along with unusually generous access to onboard technologies—an area where US defence exports are often criticised for restrictive conditions.
There were also indications that the broader package might involve civilian industrial cooperation, including the possibility of Hyundai Motor establishing a car plant in Canada. Hyundai, however, has since said it has no current plans to do so. Nonetheless, the breadth of the delegation underscores Seoul’s effort to frame the submarine deal as a comprehensive industrial partnership, with shipbuilding at its core.
Kang Hoon-sik said the CPSP would be evaluated not only on performance and cost, but also on industrial cooperation and job creation. He noted that securing the contract could support more than 300 local suppliers and generate at least 40 trillion won ($27.6 billion) in domestic output, creating over 20,000 jobs.
The bid also aligns with South Korea’s growing global influence in shipbuilding. A recent trade agreement with Washington commits Seoul to supporting Trump’s “Making American Shipbuilding Great Again” initiative, including $150 billion in Korean investment in US shipyards and an additional $200 billion for industrial sectors.
South Korean shipyards in Geoje and Ulsan are already producing advanced warships for their navy at speed and relatively low cost—an advantage Seoul is keen to replicate in export markets.
Launched in 2021, the CPSP is central to Canada’s strategy of safeguarding its vast maritime approaches, particularly in the Arctic. Ottawa’s 2024 defence policy paper, Our North, Strong and Free, stressed the need for superior underwater surveillance as melting ice opens new sea routes.
According to earlier reports, Canada aims to receive its first new submarine by 2035. Hanwha Ocean and Hyundai Heavy Industries have submitted a joint proposal valued at $20–24 billion, pledging to deliver four KSS-III submarines by that date.
The 3,700-ton KSS-III is designed for stealth and endurance, featuring air-independent propulsion that allows submerged operations of up to three weeks. Later batches will be larger and equipped with vertical launch systems capable of carrying conventionally armed missiles, advanced sonar suites and heavyweight torpedoes.
Priced at around $1 billion each, the KSS-III is significantly cheaper than US Virginia-class nuclear submarines, which can cost up to $3 billion per unit. Kang said the visit aims to promote a “win-win” framework for industrial cooperation, adding that large defence programmes increasingly require close public-private coordination beyond the capacity of individual firms.
