Canada Signs Landmark EU Defence Pact, Joins $237B Arms Procurement Fund
BRUSSELS—Prime Minister Mark Carney cemented Canada’s strategic pivot toward European defence partnerships Monday, signing a historic security agreement with the European Union that includes participation in a €150 billion (C$237 billion) joint arms procurement fund. The pact, finalized at an EU-Canada summit in Brussels, signals reduced reliance on U.S. military suppliers amid escalating global tensions.
Key Agreement Details
Canada will access the EU’s Strategic Armaments Financing Entity (SAFE)—a five-year loan facility enabling collaborative military equipment purchases. Ottawa only repays drawn amounts, not the full €150 billion pool. The deal also commits both parties to:
- Joint responses to cyber, hybrid, and space threats
- Enhanced military mobility and arms control
- New negotiations on AI standards and data governance
Geopolitical Shifts
The signing coincided with heightened global instability. Summit talks—originally focused on Ukraine—shifted to Middle East tensions after former U.S. President Donald Trump’s strikes on Iranian nuclear facilities. As EU President Ursula von der Leyen declared a “new era in cooperation,” Reuters reported the summit was far from “business as usual.”
Defence Spending Overhaul
Carney acknowledged Canada’s “over-reliance” on U.S. arms, noting 80% of defence budgets flow to American suppliers. At Tuesday’s NATO summit in The Hague, he’ll endorse raising alliance spending targets from 2% to 5% of GDP—a threshold missed under predecessor Justin Trudeau. Canada aims to hit 2% by 2025 (up from 1.45% in 2024).
Economic Implications
The EU seeks expanded Canadian liquefied natural gas (LNG) and critical mineral exports to reduce dependence on China and the U.S. This follows similar pacts with the U.K. and ongoing talks with South Korea. An EU official told the Financial Times the deal represents “as comprehensive a framework as we can offer a third country.”
UP NEXT: Carney attends NATO summit talks Tuesday, where heightened defence spending targets will dominate discussions.