Canada is considering splitting a multibillion-dollar contract for 12 new submarines by buying an equal number from Europe and South Korea as Ottawa rearms to confront the challenges of a more dangerous world, two senior government sources say.

Germany’s ThyssenKrupp Marine Systems, in partnership with the government of Norway, and Seoul-based Hanwha Ocean are shortlisted for the contract, which could cost Canada upward of $24-billion.

Final proposals for the contract to build 12 diesel-electric submarines were submitted to the federal government on Monday. A decision is expected to be made by April 4 at the earliest.

The new modern fleet of submarines would replace the Royal Canadian Navy’s current aging fleet of second-hand Victoria-class boats.

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Defence experts have raised concerns that splitting Ottawa’s submarine contract could complicate supply chains and parts inventories. In September, Prime Minister Mark Carney also raised doubts about a mixed fleet, saying you get “many efficiencies in economies of having one fleet.”

The two government sources said Ottawa will assess the bids, including whether to split the contract, on the basis of what best serves the country’s economic and military needs.

A final decision will involve more than just acquiring new submarines. Mr. Carney is looking for greater trade and economic ties with Europe and Asia as a way to reduce reliance on the United States.

The sources say the benefit of splitting the contract is that Canada would reap industrial benefits from both bidders, including possible investments in this country’s auto industry. Canada’s auto sector has been hit hard by U.S. President Donald Trump’s tariffs, as have the country’s steel and aluminum industries.

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