Prime Minister Mark Carney toured a newly completed South Korean submarine Thursday as Canada weighs a multibillion-dollar purchase to replace its aging Victoria-class fleet — a deal that could define the next generation of Canada’s naval capability.

Accompanied by South Korean Prime Minister Kim Min-seok, Carney visited the Hanwha Ocean Ltd. shipyard in Geoje, near the site of the APEC summit. The tour showcased the KSS-III (Batch 2) submarine — South Korea’s advanced diesel-electric model — which, in a symbolic gesture, flew the Canadian flag from its mast.

Hanwha Ocean and its partner Hyundai Heavy Industries have been aggressively pitching their design to Ottawa, offering to deliver four submarines by 2035, matching the Royal Canadian Navy’s retirement timeline for its current fleet.

“It’s a beautiful submarine,” said Vice-Admiral Angus Topshee, commander of the Royal Canadian Navy. “The size, the design, the crew accommodations — it’s impressive.”

Carney was joined by Defence Minister David McGuinty, who confirmed the tour is part of Ottawa’s final evaluation of competing bids from Hanwha Ocean and Germany’s ThyssenKrupp Marine Systems (TKMS).

South Korea vs. Germany

Carney visited TKMS’s facilities in Kiel, Germany, in August, but analysts say the Korean bid has momentum — particularly given its shorter delivery schedule. German officials have acknowledged that their first sub might not reach Canada until 2032 or later.

The project will be managed through Canada’s new Defence Investment Agency (DIA), with Ottawa pledging to prioritize job creation and rapid delivery. DIA cabinet secretary Stephen Fuhr said last month that the government will choose the proposal that “creates the most Canadian jobs.”

However, both McGuinty and Topshee downplayed the idea of domestic production.

“Setting up a manufacturing site for submarines is not uncomplicated,” McGuinty said.
“We’re not looking for the submarines to be built in Canada,” Topshee added. “We need them now — and we don’t have the capacity.”

Budget Still Undecided

While both designs meet the Navy’s operational requirements, Ottawa has not yet finalized the budget or funding timeline.

“The numbers are being refined,” said Topshee. “It will fit within the government’s commitment to reach NATO spending targets.”

McGuinty confirmed that the submarine program will be part of Canada’s pledge to reach two per cent of GDP in defence spending by March 2026.

Procurement Under Scrutiny

The submarine visit follows a Parliamentary Budget Office report showing Ottawa underspent $18.5 billion on defence equipment between 2017 and 2024. The report questioned Canada’s ability to manage the surge in procurement required to meet its new NATO commitments.

Despite those concerns, Thursday’s visit signalled Ottawa’s readiness to move quickly. Hanwha officials said Carney asked “detailed, technical questions” and appeared impressed with what he saw.

With Canada’s four Victoria-class subs set to retire by 2035, a final decision on their replacements could come as early as next year — potentially marking the largest naval procurement in Canadian history.

Opposition MPs are demanding that Prime Minister Mark Carney’s government release the governing framework documents for three powerful new federal agencies managing billions of taxpayer dollars — documents the government now claims are secret.

The agencies — the Major Projects Office, the Defence Investment Agency, and Build Canada Homes — were established to accelerate major infrastructure, defence procurement, and affordable housing projects. But their framework agreements and business plans, which define how they operate and what exceptions they enjoy from federal rules, have not been made public.

Opposition Calls Secrecy “Alarming”

NDP interim leader Don Davies called the situation unacceptable.

“These entities will manage massive sums of public money,” Davies said. “Framework agreements have historically been public — it’s alarming and it’s unacceptable that they’re now being kept secret.”

Bloc Québécois MP Marie-Hélène Gaudreau accused the government of continuing a “culture of secrecy and opacity.”

“Taxpayers have a right to know how their money is spent,” she said. “The Liberals have given themselves the power to bypass laws with the Major Projects Office.”

Conservative House Leader Andrew Scheer said the pattern is familiar.

“We’ve seen this before — huge costs and no accountability,” Scheer said. “This government adds bureaucracy while transparency vanishes.”

Documents Once Public Now Classified

CBC News reported that Public Services and Procurement Canada, which houses the Defence Investment Agency, confirmed that both the framework agreement and business plan exist and were approved by Treasury Board, but they are now classified.

Historically, Treasury Board guidance treated such documents as public records. A 1990s government website — now archived — stated that framework documents “are generally treated as public documents and are made available, on request, to any Canadian.”

Despite multiple access-to-information requests, neither the Privy Council Office nor the Department of Housing, Infrastructure and Communities has released the documents.

Critics Warn of Eroding Accountability

Davies expressed concern that the Carney government, early in its mandate, is embedding structures that resist scrutiny.

“Mr. Carney may be importing private-sector habits that don’t fit public governance,” he said. “We’re talking about taxpayer money, not corporate capital.”

Green Party Leader Elizabeth May called the lack of transparency a “red flag.”

“You can’t build public trust when large new agencies are empowered to move fast but unaccountably,” May said. “That’s a recipe for disaster.”

Conservative Leader Pierre Poilievre’s office went further, urging the government to scrap the agencies altogether.

“The answer to bureaucratic inefficiency is not more bureaucracy,” his office said.

Democracy Watch: Secrecy May Breach Law

Duff Conacher, co-founder of Democracy Watch, said withholding these foundational records violates Canada’s open-government principles.

“It’s clearly illegal to create new government agencies and keep their startup records secret,” he said. “This excessive secrecy denies the public’s right to know — and it’s a recipe for corruption and waste.”

While the Carney government insists the agencies need “flexibility” to move faster on major files, pressure is mounting in Parliament for it to restore transparency and release the governing documents — long considered key to democratic oversight.

The cost of building a new federal inmate hospital in New Brunswick has surged to $1.3 billion, more than triple the original $400 million estimate announced in 2021, according to federal documents and senior government sources.

The funding, approved by Treasury Board in December 2024, has not yet been made public due to ongoing bidding with construction firms. Despite widespread budget tightening across departments, the project reportedly survived Ottawa’s expenditure review ahead of the November 2024 federal budget.

The planned 155-bed bilingual facility will serve men and women in the federal correctional system, offering both mental and physical health care. It will be located on the grounds of Dorchester Penitentiary in southeastern New Brunswick, replacing the 53-bed Shepody Healing Centre, which officials have long criticized as outdated and unsafe.

“We have isolation cells that look like dungeons. The windows are deficient. The space is cramped,” said Dr. Louis Thériault, a psychiatrist at the current facility. “Of all treatment centres across the country, we are in the worst situation.”

The new hospital falls within the Beauséjour riding of Minister Dominic LeBlanc, who confirmed last year that the project’s cost would exceed original projections — comparing it to the Confederation Bridge, built in 1997 for roughly $1 billion.

“The scale of this project is very much in that range,” LeBlanc said at the time.

Federal documents obtained by Radio-Canada under the Access to Information Act show that when LeBlanc was public safety minister in 2023, he was informed of rising costs but directed officials to maintain the full scope of the project.

“At that time, [Correctional Service Canada] was asked not to reduce the scope of the project,” wrote Commissioner Anne Kelly in a briefing note.

According to Correctional Service Canada, the new hospital will address complex clinical and psychiatric needs of inmates nationwide. The Dorchester Penitentiary, which opened in 1880, will continue operating alongside the new centre, expected to be completed by 2032.

If finalized at $1.3 billion, the facility would be among the most expensive correctional health projects in Canadian history, highlighting the growing cost of modernizing the country’s aging prison infrastructure.