Canada seals deal on EU defence procurement as Munich summit tests transatlantic ties

The program allows EU countries to access low-interest loans to buy military gear and weapons, as part of an initiative called ReArm Europe aimed at weaning the continent off relying on the U.S.

As the first non-European country taking part in SAFE, Canadian companies can partner with European peers to bid on joint projects and access favourable financing.

Canada entering the deal was all but confirmed last June when Prime Minister Mark Carney signed a security and defence partnership with the European Union during a visit to Brussels.

Last December, the European Union revealed the fee Canada will pay to join this program is 10 million euros — the equivalent of C$16 million — which has observers questioning how much investment the pact will generate.

The fee is proportionate to the scale of contracts the EU expects a country will generate for its domestic industry, and the assessed fee for the U.K. is several times the size of Canada’s fee.

“The agreement strengthens our collective security, supports the development of key defence capabilities, and gives Canadian industry access to European defence markets while contributing to European and Ukrainian security,” McGuinty wrote in a Saturday statement to media outlets.

Carney was set to oversee this and other deals being signed in Munich but suddenly cancelled his trip following a mass shooting in Tumbler Ridge, B.C.

The prime minister was expected to address the security conference following his headline-grabbing speech last month at the World Economic Forum in Davos, where he urged middle powers to work together against “American hegemony” and other great powers coercing and subjugating smaller countries.

Andrea Charron, director of the Centre for Defence and Security Studies at the University of Manitoba, called Carney’s Davos address a “really important inflection point.”

“Before that speech, I perhaps thought that all the Europeans and other actors would try and outdo themselves to fawn over Trump to prevent another round of tariffs,” she said.

“Carney’s speech was sort of a call to action, for especially middle powers to stop trying to mollify a bully, and for them to forge their own future.”

U.S. President Donald Trump has put serious strain over transatlantic relations in particular, with repeated threats to annex Greenland, an autonomous territory of fellow founding NATO member Denmark.

Trump escalated these threats for weeks before saying he would not use force to take the territory, a move Denmark said would have ended the NATO alliance.

Roland Paris, who leads the University of Ottawa’s graduate school of international affairs, said the American threat against a fellow NATO member means the Munich conference is taking place under extraordinary circumstances.

“That was a wake-up call for many people in Europe who may have been hoping that this strange period in American politics could be weathered,” Paris said.

“That’s the part of Carney’s speech that has, I think, gotten people talking, in Europe in particular, taking stock of a fundamentally changed world and what that means for Europe, including for its security.”

Europe and Canada are both increasing their defence spending after Trump accused both of free-riding on American defence expenditure, and he has at times suggested Russia should invade NATO members who don’t pay up.

On Saturday, U.S. Secretary of State Marco Rubio told the Munich conference that “Trump demands seriousness and reciprocity from our friends here in Europe” but does not want to abandon the continent.

Carney has agreed to spend the equivalent of five per cent of GDP on defence by 2035 — a huge increase from the two per cent Canada was expected to reach in 2025, according to NATO estimates.

At Munich, Canada has also signed a military-industrial memorandum with Denmark and a joint declaration with Germany on artificial intelligence that touches on technology sovereignty.

Ahead of Carney cancelling his trip, officials who briefed reporters on the condition they not be named said he had been set to meet with the heads of government of Greenland, Denmark, Ukraine, Germany, Spain, Finland, Norway and the European Union, as well as a delegation of U.S. senators.

He was also set to meet with business leaders while in Munich to try and attract investment in Canada’s critical mineral, energy and technology sectors.

The Munich Security Conference is “the largest gathering of security and foreign policy types in the world,” explained Sen. Peter Boehm, a former diplomat who served as ambassador to Germany. He described it as similar to Davos, but focused on security and foreign policy.

At last year’s event, U.S. Vice-President JD Vance gave a speech where, instead of talking about Ukraine as expected, he attacked European countries and used a part of his speech to focus on the exclusion of a far-right party.

“Of course, Germany has restrictions on hate speech because of its World War II legacy. And so this was really astonishing and appalling for the Europeans,” explained Stephen Saideman, Paterson chair in international affairs at Carleton University.

Some things have changed since then, he said.

“After a year of everybody’s trying to figure out how to best pander to Trump and make sure they don’t upset him, they’ve now started to price in his anger and are willing to move ahead even if they do things that annoy the United States,” Saideman explained.

Speaking before Carney cancelled his trip, Boehm predicted there would be lobbying of Canada over its upcoming submarine purchase.

German submarine manufacturer TKMS and South Korean firm Hanwha Oceans are competing for a lucrative, multibillion-dollar contract to supply Canada with up to 12 new submarines.

Canada is also in the market for fighter jets. In 2025, Carney asked for a review of Canada’s plan to purchase a fleet of U.S.-made F-35 fighter jets.

With files from Kyle Duggan and David Baxter