Canada has finalized an agreement to join the European Union’s Security Action for Europe (SAFE) program, a €150-billion initiative. However, Defense Minister David McGuinty has not disclosed the exact cost to the federal treasury. This historic deal allows Canada to participate in joint military procurement activities, marking the first non-European country to do so.
Under the SAFE program, partner countries can access low-interest loans for military procurement, enabling Canadian companies to bid on collaborative projects. Detailed negotiations began after Prime Minister Mark Carney signed a defense-security partnership with the EU last year.
According to a European diplomat, there is an entry fee to join the SAFE program, determined by the expected business volume of Canadian defense contractors. This fee grants access to a larger share of underwritten loans by the European Commission, encouraging participation in joint projects.
While an agreement has been reached, specific financial details are still being finalized, as stated by McGuinty. The fee is expected to be in the millions, not billions, according to an official in McGuinty’s office. Talks between the UK and the EU on joining the program recently stalled due to fee disagreements.
EU countries had set a deadline for initial loan bids, with Canadian companies uncertain about their participation post-deadline. The SAFE program aims to strengthen Europe’s defense capabilities, with 19 EU countries already applying for loans.
Notably, Poland has been allocated the largest share of the €150 billion, followed by Romania, Hungary, and France. The program is seen as a significant opportunity for Canada to enhance its defense capabilities and industry collaborations over the next five-year fiscal framework.
Last spring, Carney highlighted the SAFE program as vital for the Canadian military and industrial revitalization, causing concerns in the European diplomatic community regarding potential overselling of the program in Canada.
