Canada considers utilizing EU loans for purchasing next-generation warplanes and submarines.

MILAN Canada has become the first country outside the European Union to join the blocs major military funding initiative, Security Action for Europe (SAFE), which could assist Ottawa in acquiring new fighter jets and submarines. Prime Minister Mark Carney announced that Canada has agreed to participate in the EUs 150 billion program, which offers loans for collaborative defense procurement to enhance military readiness.

Joining SAFE will unlock billions of dollars in defense opportunities for Canadian companies, attract dependable suppliers for our Armed Forces, and create significant prospects for national manufacturers to produce and export Canadian defense technology, Carney stated.

Canada is currently reviewing its next-generation fighter jet procurement. While the government has committed to purchasing 16 F-35 aircraft initially, officials are evaluating the possibility of a mixed fleet that could include Swedish-made Gripen jets. Many operational details of Canadas involvement in SAFE are still being finalized, with both Ottawa and the EU working to ratify a bilateral agreement that may streamline participation and provide exemptions from certain program rules.

SAFE guidelines stipulate that no more than 35% of a projects costs can come from countries outside the EU, European Economic Area, or Ukraine to qualify for funding. However, countries can gain additional access by making financial contributions. The amount Canada has agreed to provide, and whether it is a one-time fee or linked to procurement obligations, has not yet been disclosed. Similar funding discussions previously delayed the United Kingdom from joining, as the EU requested 46.5 billion, whereas the U.K. offered only 200300 million.

Canadas substantial procurement plans suggest that financing could extend to advanced fighter jets, conventional submarines, and maritime surveillance systems. Experts also anticipate potential use of SAFE loans for drones, anti-submarine systems, and secure satellite communications. Projects funded by SAFE require at least two participants, usually two member states or a combination of a member state with Ukraine or an EFTA/EEA country, which includes Norway, Iceland, Liechtenstein, and Switzerland.

According to defense analyst Roger Hilton, Canada is likely to form partnerships with European nations that align ideologically and share strategic interests, such as Arctic security and North Atlantic defense. Canada will probably collaborate with countries that possess robust aerospace and naval industriesparticularly France, Germany, Italy, Sweden, and Spainsince they have the industrial scale, design capabilities, and consortium structures favored by SAFE, Hilton explained.

Author: Riley Thompson