Hanwha Advances Canadian Submarine Bid with Local Steel Partnership

In June 2026, Hanwha Defence Canada is intensifying its proposal for the Canadian Patrol Submarine Project (CPSP), which is set to award a contract valued at up to 60 trillion won to build a fleet of submarines for the Royal Canadian Navy. The strategy entails utilizing steel from Algoma Steel, a local Canadian manufacturer, in the production of military land vehicles alongside the submarine project. This move not only highlights Hanwha's intent to fulfill Canada's defense industrial strategy but also seeks to bolster the country’s local manufacturing capabilities and create jobs within the community. According to industry analysis, the CPSP could lead to the creation of approximately 15,000 direct and an equal number of indirect jobs, reviving critical sectors that have faced challenges due to tariffs and other trade barriers.

The Canadian government is adamant about ensuring that large-scale defense procurements contribute to domestic job creation and the revitalization of local industries. The emphasis on local sourcing and production capabilities will heavily influence the decision-making process for the CPSP, making it imperative for bidders like Hanwha to align with these governmental priorities. As articulated by Flavio Volpe, President of the Automotive Parts Manufacturers’ Association (APMA), Hanwha's partnership with Algoma is akin to generating the economic impact of building a new automotive plant, hence presenting an appealing argument for their bid.

With the CPSP contract set for announcement by the end of June 2026, rapid strategic developments are underway. Hanwha's approach goes beyond the standard defense procurement model, reflecting a commitment toward a more integrated contribution to the manufacturing ecosystem in Ontario and beyond. The partnership with Algoma Steel is complemented by Hanwha’s existing agreements via the APMA, which underscores a collaborative framework aimed at producing armored vehicles including the K-9 Thunder self-propelled howitzer, K-10 ammunition resupply vehicle, Redback infantry fighting vehicle, Cheonmu multiple rocket launcher, and a unmanned ground drone vehicle. Each of these innovations is expected to leverage local resources and capabilities, setting a precedent for future defense contracts.

Additionally, this localization strategy assists in addressing the significant downturns in Canada’s auto manufacturing sector, which has been severely impacted by U.S. tariffs. Industry stakeholders are keenly observing how this localization narrative will translate into actual contract awards, as firms vie for a stake in a project deemed crucial for national defense and local economic development.