Canada has selected a German consortium to build a dozen cutting-edge submarines in one of the country’s largest-ever defence contracts, further deepening its NATO ties. This was reported by Qazaqyia.kz citing The Guardian.

On Monday, Prime Minister Mark Carney announced the winner of a tightly contested battle for the lucrative government contract to replace the fleet of ageing, secondhand subs, most of which are undergoing maintenance. The Royal Canadian Navy currently has four submarines bought second-hand from Britain in 1998, three of which are in maintenance.

For months, ThyssenKrupp Marine Systems (TKMS) and South Korean shipbuilder Hanwha Ocean have promised tech-heavy submarines and spillover economic benefits. TKMS, the largest manufacturer of non-nuclear submarines and a key supplier of NATO's fleet, won the contract.

The new subs will likely help Canada gain a stronger foothold in the Arctic. The TKMS vessels are designed with modern stealth technology to operate in contested areas with minimal detection and can conduct lengthy surveillance missions in key Arctic routes, including the Northwest Passage.

The submarine order itself is estimated to be worth more than US$12bn (£9bn), but including roughly half a century of maintenance, the total bill could exceed US$70bn. Canada's federal government and TKMS will still have to enter into lengthy negotiations to finalise the contract.

Carney took a delegation of senior cabinet ministers to visit TKMS’s building facility in Kiel, Germany last year, and toured a newly built sub at Hanwha’s facility in Geoje, South Korea. Senior officials from both countries also made visits to Canada to sell the broader economic benefits.

Carney’s Liberal party has committed to dramatically increasing government defence spending, with a pledge to allocate 5% of GDP by 2035. Canada has also suggested it is open to making larger purchases from European contractors as part of a push to lessen reliance on the US.

Canada has already committed to buying 18 American-made Lockheed Martin F-35 Lightning II jets, but recent political tensions have pushed Ottawa to look at other vendors. Canada is weighing the purchase of 72 Saab-made Gripen war planes.

On Monday, NATO Secretary General Mark Rutte told reporters that the members of the alliance were about to announce billions in new contracts, calling it the “crucial kit we need to deter and defend.”