Dangling a juicy submarine contract, Canada is saying jump, and South Korea and Germany are asking ‘how high?’
What happened: A South Korean envoy let slip to CTV News that, as part of its bid to provide the Canadian military with 12 new submarines, Hanwha proposed Project Beaver — a joint venture with Hyundai to build a hydrogen transport trucking industry in Canada.
If Ottawa chooses Hanhwa, the $3.1 billion investment would begin in 2030 with the construction of a hydrogen liquefaction plant in B.C. “Hyundai Motors is going to help Canada build its ecosystem on hydrogen,” special envoy Kang Hoon-sik said.
Catch-up: Hanwha and Germany’s TKMS, the other candidate to win the sub contract, have been pulling out all the stops to win the lucrative deal — especially since the feds extended the bidding process earlier this year to see what else the two sides had to offer.
Hanwha has made some very splashy promises, including building weapons and armoured vehicles in Canada, a pledge to use steel from Ontario company Algoma and potentially help it develop a new steel mill, and providing launch technology for Canada’s first spaceport.
TKMS has made promises related to weapons-building, tech, and industry — promising an $86 billion GDP boost and 654,695 jobs over the lifetime of the deal — but has also touted the benefits the partnership will bring for Arctic defence and NATO interoperability.
Zoom out: With Project Beaver (we really can’t believe they called it that), Hanwha has upped the ante by offering to bring an entire industry to Canada, and in a sector that’s in a serious slump right now as Canada struggles with EV plant closures and U.S. tariffs.
Why it matters: Hanwha and TKMS are fighting hard for a reason: the deal could end up being worth $120 billion over a 70-year period. This scope makes it the first truly big deal of Canada’s new era of increased defence spending; it’s crucial Ottawa makes the most beneficial choice. We’ll likely find out who the victor is at the end of June, so buckle in.—QH
