South Korea pitches Canada on $20B-plus plan for subs, armoured vehicles

A trio of South Korean companies have made a significant, multibillion-dollar pitch to Canada, promising to quickly replace the navy's aging submarines, deliver more firepower to the army and help revitalize the country's defence industrial base.

A detailed overview of the unsolicited proposals, which were delivered to the federal government in early March, was given to CBC News.

The companies have the full backing of the South Korean government, which is eager to expand the defence and security partnership it signed with former prime minister Justin Trudeau two years ago in Seoul.

CBC News was given unprecedented, exclusive access to senior Korean defence and security officials as well as two defence plants and shipyards, which have set aside their competitive differences in order to bid on Canada's submarine replacement program.

Hanwha Ocean and Hyundai Heavy Industries submitted a detailed, joint presentation worth $20 billion to $24 billion, promising to deliver the first four submarines by 2035, the current Royal Canadian Navy deadline to receive just one new boat. It has also pitched building maintenance facilities in this country which would employ Canadians.

Hanwha Aerospace, a sister company to the shipyard, has separately put down two detailed proposals to re-equip the army with big, mobile howitzers and rocket-propelled artillery, similar to the U.S.-made HIMAR system. It has also proposed a bigger package of armoured vehicles to fill the gaps the army has in tracked fighting vehicles and defence. 

Those pitches are worth more than $1 billion, depending on what the Canadian government chooses and come with rapid delivery times and the possibility of setting up maintenance — and potentially manufacturing — centres, South Korean defence officials said.

The proposals represent an unprecedented diplomatic and corporate push to get Canada to buy its military equipment elsewhere than the United States and Europe. 

"We do not think of this as a single, one-time deal between two countries. It's not a transaction for us," Deputy Defence Minister Hyunki Cho told CBC News in a recent translated interview. "If we do succeed in making the sale, then we are going to try and give our effort toward strengthening the capabilities of Canada's defence industry, as well as furthering defence co-operation."

The bids were presented at a time when many Canadians — facing the Trump administration's trade war and threats of annexation — have demanded the federal government cancel major military purchases from the United States, including the F-35 fighter program.

The Liberal government of Prime Minister Mark Carney ordered a review of the plan and hinted that Canada may take delivery of the aircraft it has already paid for and look elsewhere to fill the rest of the order. In total, Canada has said it requires 88 advanced fighters. 

While it did not submit a full unsolicited proposal, Korean Aerospace Industries (KAI) has expressed interest in selling Canada its F-50 fighter aircraft as a training jet that could be quickly converted into a combat aircraft. 

South Korea has also begun manufacturing its own stealth fighter in partnership with Indonesia. However, KAI officials have not yet offered it to Canada.

Despite the enthusiasm, there's deep skepticism among South Korean defence and foreign policy officials and observers that Canada is serious about breaking its dependency on the defence-industrial complex of the United States.