The new entity would feature Canadian majority ownership and board membership, with a Canadian chief executive, and would produce vehicles entirely in Canada using Canadian workers, parts and materials, including steel and aluminium. The initiative is designed to support the „Build in Canada” pillar of Canada’s recently released Defence Industrial Strategy (DIS), protecting and creating tens of thousands of jobs in the Canadian automotive sector.
Hanwha Ocean’s KSS-III is described as a proven, in-service and actively produced submarine that fully meets the requirements of the CPSP, offering superior underwater surveillance capability and deployability in the Arctic with extended range and endurance. Should the KSS-III be selected and a contract signed in 2026, Hanwha Ocean states it is able to deliver four submarines to replace Canada’s current Victoria Class fleet before 2035, with the remaining eight vessels delivered at a rate of one per year, bringing the full fleet of twelve submarines to Canada by 2043.
Earlier retirement of the Victoria Class fleet resulting from the accelerated delivery schedule is estimated to generate approximately $1 billion in savings on maintenance and support costs. Hanwha states that no competing offer can match this delivery timeline.
Should the KSS-III be selected, the joint venture would establish Canadian production capabilities for a range of military platforms, including the K9 Thunder self-propelled howitzer and K10 Ammunition Resupply Vehicle, the Redback infantry fighting vehicle, the Chunmoo multiple launch rocket system and uncrewed ground vehicles. The venture would also focus on the design and production of non-commercial industrial vehicles for the Canadian Armed Forces, federal, provincial and municipal government agencies, emergency services, and Arctic and Crown resource-sector operations.
Flavio Volpe, President of the APMA, described the agreement as a direct response to the Canadian government’s call to the automotive sector. „This joint venture will deliver on the Prime Minister’s challenge to Canada’s automotive sector to help drive the country’s unprecedented commitment to national defence,” he said. „This partnership, should Hanwha’s KSS-III submarine be selected for the Canadian Patrol Submarine Project, will be tremendous for Canada’s automotive sector. The APMA is proud to extend our full support to South Korea’s bid and broader industrial opportunities it presents for Canada,” he added.
Son Jae-il, Chief Executive Officer of Hanwha Aerospace, highlighted the potential of combining Canadian industrial capability with South Korean technology. „Canada brings world-class advanced manufacturing and highly skilled talent pools and APMA has long stood at the center of Canada’s manufacturing leadership and innovation,” he said. „We believe that when Canada’s industrial capability is combined with Hanwha’s technology and manufacturing experience, we could accomplish a new model of cooperation that goes beyond mere procurements,” he added.
Steve SK Jeong, Senior Executive Vice President and Head of Naval Ship International Business at Hanwha Ocean, framed the agreement in broader strategic terms. „Today’s agreement is a historic commitment to shaping the future of Canada’s defence industry together,” he said. „Perfectly aligned with the Government of Canada’s 'Build in Canada’ principle and Defence Industrial Strategy, this is more than a submarine contract — it is Hanwha’s promise to strengthen Canada’s industrial capacity and economic sovereignty,” he added.
Hanwha Ocean is a leading global shipbuilder with more than four decades of experience in complex naval and commercial shipbuilding programmes, operating a large-scale integrated shipyard in Geoje, South Korea, spanning five square kilometres and employing more than 31,000 people. Since its establishment in 1973, the company has delivered more than 1,400 vessels worldwide and builds approximately 45 commercial and naval ships each year, with deep expertise in the design, construction and sustainment of submarines and surface combatants for the Republic of Korea Navy.
