Canada has officially joined the European Union’s Security Action for Europe (SAFE) program, a €150-billion initiative for military procurement. Defense Minister David McGuinty confirmed the agreement but could not provide precise cost details to the federal treasury. This partnership allows Canada to contribute various capabilities like ammunition, missiles, drones, and artillery systems to the initiative.
The inclusion of Canada in the SAFE program marks a significant milestone as it is the first non-European country to participate in this joint military procurement effort. The collaboration will open doors for Canadian companies to engage in low-interest loans for military gear procurement and bid on joint projects facilitated by the European Commission.
Negotiations for Canada’s entry into the SAFE program started following the overarching defense-security partnership signed by Prime Minister Mark Carney with the EU last year. Although the agreement has been reached, certain specifics, including financial aspects, are still under discussion.
According to sources, there is an entry fee for countries joining the SAFE scheme, calculated based on the anticipated business volume of Canadian defense contractors. This fee grants access to a larger portion of the loans provided by the European Commission. McGuinty mentioned that while the agreement is in place, finer details such as the costs are being fine-tuned and will be disclosed in due course.
The fee requirement is a critical factor, as demonstrated by the recent breakdown of negotiations between the United Kingdom and the EU over this issue. Failure to reach an agreement on the fee may limit the contribution of companies to the projects. The deadline for initial loan bids was set for November 30, with expectations of loan issuance in the coming year.
The SAFE program, introduced by the EU to bolster European defense amid ongoing conflicts like Russia’s battle with Ukraine, has received applications from 19 out of the 27 EU countries. Notably, Poland has secured the largest share of funds, followed by Romania, Hungary, and France. Canada aims to leverage the opportunities presented by the SAFE program to enhance its defense capabilities and industrial base in collaboration with the European Union.