OTTAWA — Canada hasn’t even agreed yet to buy any submarines from Germany’s TKMS but the mere prospect is already paying off, with a TKMS ally quickly finalizing a contract with Nova Scotia spaceport Maritime Launch Services.

Isar Aerospace, which is based near Munich, signed a 10-year contract with the Canadian space company on Tuesday, intending to send rockets into orbit from Canso, N.S., starting in 2028. 

In May, as TKMS battled South Korea’s Hanwha for a multibillion-dollar submarine contract with Canada, it announced a deal with Isar to work on Canadian space-launch capability. It was “an integral contribution to TKMS’s bid,” the shipbuilder said as it tried to convince the Canadian government it had a better industrial-benefits package than Hanwha did.

Neither TKMS nor Isar named a Canadian partner at the time, though Isar and Maritime Launch Services (MLS) followed up a week later by signing a letter of intent to co-operate on “orbital launch readiness.”

Launch capacity is a critical bottleneck for most countries seeking to use satellites for science, defence and intelligence, Isar’s vice-president of mission and launch operations Alexandre Dalloneau said in a statement. “Canada is the next step in our road map to bring full end-to-end launch capability to sovereign nations.”

The deal is to pay MLS US$3.75 million a quarter, or US$15 million a year, with a 30-month pause after an initial startup year. At current exchange rates, that means Isar will pay MLS more each year than the Canadian government will on its own 10-year, $200-million lease for a launchpad at the site.

The Isar contract comes with the possibility of two five-year extensions on top of that.

Now, one day after Prime Minister Mark Carney announced TKMS as Canada’s preferred submarine supplier, that letter has turned into a firm contract.

“By combining Isar Aerospace’s launch vehicle, Spectrum, with Spaceport Nova Scotia’s licensed infrastructure, we are creating the conditions for reliable orbital launch services from Canada,” MLS chief executive Stephen Matier said in a statement.

The deal continues a phenomenal turnaround for Maritime Launch Services, a company that almost flamed out just two years ago.

Isar is one of numerous German companies seeking to profit from growth in the private space sector. Its Spectrum rocket is still in development, though it’s intended to launch payloads of up to 1,000 kilograms into low orbit. That would make it heftier than rockets from another MLS partner, Reaction Dynamics of Longueuil, Que., which are to haul payloads of about 200 kilograms.

A Spectrum prototype took off in a first test flight in March 2025. The rocket climbed briefly before it started veering out of control. Isar cut the engines; the rocket crashed into the sea and blew up next to a private launch site in Andøya, in northern Norway.

This past June, Isar scrubbed a second test flight due to “off-nominal behaviour in the vehicle’s fluid systems,” though it raised €270 million in new capital in a Series D round that same month.

Andøya is north of the Arctic Circle. High latitudes are good for launching satellites into polar, or north-south, orbits. Launch spots closer to the equator are better for orbits that go around the planet from west to east, because launches at lower latitudes get boosts from Earth’s natural rotation.

Open water east of such a site means rockets can drop first-stage engines and fuel tanks, and ditch entirely if they have to, with relative safety. Launches from Europe are difficult because Asia is in the way; instead, the European Space Agency put its own spaceport on the Atlantic coast of French Guiana, in South America.

On the same day as Isar and MLS announced their deal, Carney and Germany’s Chancellor Friedrich Merz said the two countries want to sign a broad partnership agreement by the end of the year, with space included on the shared to-do list.