Defense, Minerals, and AI "Package Deal": Intense Competition for Canada’s Submarine Contract

Korea-Canada Industrial Cooperation Forum and CEO Dialogue Held in Toronto
Six MOUs Signed in Steel, Space, AI, and Rare Earths
Aiming for a 60 Trillion Won Submarine Contract
Hyundai, Hanwha, and HD Hyundai Heavy Industries Participate

As South Korea actively pursues a bid for Canada’s next-generation submarine project (CPSP), a “package-type industrial diplomacy” combining advanced industry cooperation is now underway. With both the government and the business sector fully mobilized, the scope of collaboration is expanding across key strategic industries of both countries, including steel, space, artificial intelligence (AI), and rare earth development.

On January 26 (local time), the Ministry of Trade, Industry and Energy held the “Korea-Canada Industrial Cooperation Forum” at the Park Hyatt Hotel in Toronto. The forum consisted of two parts: the “Korea-Canada Automotive Industry Cooperation Forum” and the “Korea-Canada CEO Dialogue.” The Korean delegation included Kang Hoon-sik, Chief Presidential Secretary, Kim Jeonggwan, Minister of Trade, Industry and Energy, and Lee Yongcheol, Commissioner of the Defense Acquisition Program Administration. The Canadian side was represented by Philip Jennings, Deputy Minister of Innovation, Science and Economic Development, and Victor Fedeli, Ontario’s Minister of Economic Development, among others.

The two sides discussed ways to expand cooperation in future mobility sectors such as electric vehicles and autonomous driving. Minister Kim stated, “The automotive industry is a core foundational industry that runs through both countries,” adding, “We will help our industries seek opportunities and grow together.”

On the occasion of this forum, six memoranda of understanding (MOUs) were signed between Korean and Canadian companies in areas such as steel, defense and space, AI, advanced sensors, and rare earth development. The companies involved are: Hanwha Ocean and Algoma Steel (steel); Hanwha Systems, Telesat, and MDA (low Earth orbit satellites); Hanwha Ocean, Hanwha Systems, and Cohere (AI); Hanwha Systems and PVLabs (advanced sensors); and POSCO International and Torngat Metals (rare earth development). The government expects that these collaborations will strengthen the industrial ecosystem through supply chain stabilization, local production linkage, and technology development.

Yonhap News Agency

Following this, the third “Korea-Canada CEO Dialogue,” hosted by the Federation of Korean Industries and the Business Council of Canada, brought together CEOs from 21 companies from both countries to discuss directions for strategic industry cooperation. Minister Kim remarked, “Canada is a reliable core partner,” and added, “This will serve as an important foundation for strengthening supply chain stability, creating mutual jobs, and enhancing global competitiveness.”

The industrial cooperation activities in Toronto have drawn attention as they coincide with South Korea’s entry into the competition for Canada’s next-generation submarine project. Canada is pursuing a submarine procurement program worth up to 60 trillion won for as many as 12 vessels to replace its aging Victoria-class submarines. South Korea, led by a consortium of Hanwha Ocean and HD Hyundai Heavy Industries, is competing against Germany’s Thyssenkrupp Marine Systems (TKMS).

The full participation of Minister Kim, Chief Secretary Kang, and the business delegation is seen as a strong indicator of a diplomatic and industrial package support for this project. Foreign media have described the Korean delegation’s activities as “high-level lobbying to win the submarine project contract.”

A government official explained, “Strategic industry cooperation, including submarines, is not just about defense contracts; it is a comprehensive package involving supply chains, technology, and investment. There is significant potential for synergy between Canada’s mineral and energy resources and Korea’s manufacturing and defense capabilities.” Industry insiders believe that Korea-Canada cooperation, as it expands to securing key resources such as rare earths and battery minerals, will also impact the position of Korean companies within the North American supply chain.

The selection of the submarine contractor is expected to become clear as early as the first half of this year.