Canada to Begin Talks to Buy Up to 12 German-Made Submarines

(20:18 GMT) *Canada to Enter Talks With Germany's TKMS to Buy 12 Submarines (20:18 GMT) *Canada Could Seek Submarines From South Korea's Hanwha Ocean Should TKMS Talks Fail (20:18 GMT) *Canada Discloses No Pricetag for Submarine Purchase (20:33 GMT) Canada to Begin Talks to Buy Up to 12 German-Made Submarines

By Paul Vieira

OTTAWA--Canada said it would begin negotiations with ThyssenKrupp's naval division TKMS to purchase up to 12 submarines in the latest sign of Ottawa's intent to ramp up defense spending and upgrade its military capacity.

Prime Minister Mark Carney said Monday the acquisition of the German-made submarines would be the largest military procurement in the country's history. TKMS beat out a bid from South Korea's Hanwha Ocean. Carney said Canada has the right to opt for South Korean submarines in the event talks with TKMS fail.

Canada didn't provide an estimated cost for the 12 submarines, although Carney said they are accounted for in the federal government's fiscal plan. In the government's annual budget plan last year, Ottawa pledged to spend over 80 billion Canadian dollars, equivalent to about US$56 billion, on a cash basis to upgrade the Canadian military. Officials now estimate that total spending related to the military--from procurement to investments in defense-related infrastructure--will total about C$500 billion by 2035.

The announcement comes just ahead of Carney's trip to Turkey to participate in a summit involving leaders from member countries of the North Atlantic Treaty Organization, or NATO. Defense analysts contend that the Canadian navy is constrained in its ability to adequately patrol and defend Canada's own waterways, due in part to insufficient numbers of vessels available.

Write to Paul Vieira at paul.vieira@wsj.com