Canada moves closer to the European Union for its military purchases

Mark Carney's government has reached an agreement to join the EU's SAFE program, allowing Canada to participate in group arms purchases and giving Canadian manufacturers access to contracts financed by a €150 billion fund, at a time when defense spending in Europe is increasing significantly. The entry fee has not been disclosed at this stage, but Ottawa says it is aiming for economies of scale and new opportunities for its industry, with technical details still under negotiation.

Canada becomes the first non-EU country to gain this access, a decision presented by Ottawa as a means of reducing dependence on US suppliers and diversifying industrial partners. Joint purchases may cover critical capabilities such as ammunition, missiles, drones, artillery systems, and infantry weapons, although Canada, as a third country, will not be eligible for SAFE loans to member states.

Politically, this move is part of a security and defense partnership agreed earlier this year between Mark Carney and Ursula von der Leyen, which emphasizes the goal of spending more wisely in the face of a more unstable strategic environment. Ottawa is highlighting billions of dollars in potential opportunities for Canadian companies, but acknowledges that the cost of membership is still being finalized, with trade-offs on percentages and clauses within the European framework.

Challenges remain: re-export restrictions related to US regulations on arms transfers could limit certain sales involving US components, and the lack of full ratification of the CETA agreement by ten EU countries complicates the uniform application of non-discrimination rules. Industry players also believe that significant contracts awarded to European manufacturers could lead to reciprocal benefits for Canadian companies.

On the budgetary front, Canada and the 23 EU members belonging to NATO have committed to increasing defense spending to 5% of their GDP by 2035, which would represent the largest increase for Ottawa in more than 70 years. The prospect of joint procurement and increased European rearmament, motivated in particular by Russia's policy, reinforces the value of Canadian integration into European supply chains and tenders. The Globe and Mail

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