Canada has finalized an agreement to join the European Union’s Security Action for Europe (SAFE) program, a €150-billion initiative. Defence Minister David McGuinty confirmed the deal, highlighting Canada’s entry as the first non-European country to participate in the joint military procurement initiative. McGuinty expressed enthusiasm about the opportunities for Canada to supply various capabilities like ammunition, missiles, drones, artillery systems, and infantry weapons through the program.
The negotiations for Canada’s inclusion in the SAFE program began after Prime Minister Mark Carney signed a defense-security partnership with the EU last June. The program enables partner countries to access low-interest loans for joint military gear procurement and allows Canadian companies to bid on collaborative projects.
A European diplomat revealed that joining the SAFE scheme involves an entry fee, determined by the expected business volume of Canadian defense contractors. This fee grants companies greater access to the program’s loans underwritten by the European Commission. Although an agreement has been reached, specific details such as costs are still being refined, according to McGuinty.
The fee, crucial to participation, was a point of contention in the UK’s negotiations with the program, leading to breakdowns in talks. EU countries had set a deadline for initial bids for the loans, with Canadian companies eager to join the action. The SAFE program, part of Europe’s efforts to enhance defense amid the conflict in Ukraine, has seen 19 out of 27 EU countries applying for loans, with Poland receiving the largest allocation.
The initial €150 billion budget is nearly allocated, setting the stage for future procurement collaboration between Canada and the EU. Carney had earlier emphasized the significance of the SAFE program in rebuilding Canada’s military and industrial base. Concerns in the European diplomatic community about potential overselling of the program in Canada were raised in response to Carney’s remarks.
As the negotiations progress, Canada’s participation in the SAFE program presents substantial opportunities for collaboration in defense procurement with the EU over the upcoming multi-year fiscal framework cycle.