'Defense Fairy' Kang Hoon-sik Heads to Canada for Submarine Deal: "At Least 40 Trillion Won in Production Impact"

Kang Hoon-sik to Depart for Canada on the 26th
Fourth Overseas Visit as Special Envoy for Strategic Cooperation
Many Korean Companies, Including Hyundai Motor, to Join Delegation
Kang Hoon-sik: "Expecting to Create 20,000 Jobs"

As a "Special Envoy for Strategic Economic Cooperation," Kang Hoon-sik, Chief Secretary of the Presidential Office, is speaking to the press before departing for Canada through Incheon International Airport on the 26th. Photo by Yonhap News Agency

Kang Hoon-sik, Chief Secretary of the Presidential Office, is departing for Canada on the 26th to secure a submarine project contract worth 60 trillion won. Kang is determined to do his utmost to win the contract, as the additional production-induced effect alone is expected to reach at least 40 trillion won and tens of thousands of jobs could be created. His strategy is to demonstrate a comprehensive commitment to "industrial cooperation" to the Canadian government by including a variety of companies, such as Hyundai Motor Group, in the special envoy delegation. Following the Canada visit, he is also expected to discuss the export of the Korean Multiple Launch Rocket System (MLRS) "Cheonmu (K-239)" in Norway.

Speaking to reporters at Incheon International Airport before departing for Canada on the morning of the 26th, Kang stated, "This Canadian submarine project is one of the largest ongoing defense contracts," adding, "The domestic production-induced effect alone is estimated to exceed at least 40 trillion won, and if we succeed in winning the contract, more than 300 partner companies will be given work, and around 20,000 jobs are expected to be created." Kang is visiting Canada as the Special Envoy for Strategic Economic Cooperation, marking his fourth overseas trip as a special envoy to support Korean defense exports.

Canada's "Canadian Patrol Submarine Project (CPSP)" aims to acquire up to 12 diesel submarines of 3,000 tons each. Including construction costs and future maintenance, repair, and operations (MRO) expenses, the project is estimated to be worth up to 60 trillion won. Hanwha Ocean and HD Hyundai Heavy Industries have formed a "one team" consortium to participate in the bid, competing against Germany's Thyssenkrupp Marine Systems (TKMS) in the final round. Canada plans to close final proposals in March and select a preferred bidder in the first half of the year.

The special envoy delegation includes Minister of Trade, Industry and Energy Kim Jeonggwan, Defense Acquisition Program Administration Commissioner Lee Yongcheol, and representatives from Hanwha Ocean and HD Hyundai Heavy Industries, who have formed the consortium. In addition, although not directly related to the bid, many Korean companies, including Hyundai Motor Group, are accompanying the delegation. Kang explained, "Large-scale defense contracts are difficult to win based solely on weapon performance or individual company capabilities," and added, "The Canadian government has stated that, beyond performance and price, industrial cooperation such as job creation will be an important criterion."

Industry insiders also believe that how attractive an industrial cooperation proposal Korea submits to Canada will determine the outcome of the contract. The Canadian government is said to have requested an "offset" at the level of the submarine contract amount. Offset refers to a conditional trade arrangement in which the importing country demands economic benefits in return for awarding the contract. The Canadian government has asked for a package including local equipment purchases, local production, technology investment, and resource and energy cooperation. It is reported that Canada requested Hyundai Motor to establish a local plant in Korea's case, and additional facilities from Volkswagen in Germany's case.

"The situation is not easy... but if we can raise the chances of winning even slightly"

The outlook for winning the contract is not entirely bright. This is due to the offset requirements, as well as the strengthening of joint weapons procurement initiatives among NATO and European Union member states. Observers note that uncertainty over Korea's submarine bid has increased since the Canadian government announced its intention to participate in the EU's joint weapons procurement program. Kang acknowledged, "Considering that we received technology transfer from Germany in the early stages of submarine development, I believe the situation is not easy."

On the 25th, Chief Secretary Kang visited the War Memorial of Korea in Yongsan to pay tribute to Canadian soldiers who died during the Korean War. This diplomatic gesture was intended to highlight the two countries' history as comrades-in-arms during the war in the context of the contract bid. Kang said, "At the suggestion of the Minister of Trade, Industry and Energy, we took this opportunity to honor Canada's dedication and sacrifice during the Korean War and to reaffirm the history of security cooperation between our countries," adding, "We plan to fully convey these sentiments to the Canadian side."

Kang emphasized, "In addition to the excellent performance of our submarines, I intend to personally deliver the government's commitment to expanding industrial and security cooperation between the two countries to the highest levels of the Canadian government," and continued, "There is a Canadian saying that 'a true friend comes in winter.' If we can raise the chances of winning the contract even slightly, and if we can convey Korea's sincerity, the role of the special envoy delegation is to do our utmost during this visit."

After the Canada visit, the special envoy delegation plans to travel to Norway to support the export of the "Cheonmu" system. Norway is currently pursuing a multiple launch rocket procurement project, and Hanwha Aerospace's chances of winning the contract are being discussed locally.

Since last October, Kang has been engaged in "sales diplomacy" to support defense exports, visiting Poland, Romania, and Norway, as well as the UAE and Saudi Arabia in November, and Poland again in December. Notably, in December last year, after signing a Cheonmu guided missile contract worth 3.9 billion dollars (approximately 5.6 trillion won) in Poland, he announced in a return briefing, "The total value of defense contracts with foreign countries in 2025 was 15.2 billion dollars, and since the inauguration of the Lee Jaemyung administration in June, contracts worth more than 14.2 billion dollars, or over 90%, have been signed."