Canada Joins EU’s SAFE Program for Defense Procurement Opportunities

Canada has officially become the first non-European Union country to join the EU’s prominent rearmament initiative, known as Security Action for Europe (SAFE). This program, which has a funding capacity of €150 billion, aims to enhance military procurement and readiness across Europe. The announcement was made by Canadian Prime Minister Mark Carney this week, highlighting the potential benefits for Canadian defense industries.

The SAFE program offers loans for joint military projects, and Carney emphasized that Canada’s participation could unlock billions in defense opportunities. “Participation in SAFE will unlock billions of dollars in potential defense opportunities for Canadian businesses, attract new reliable suppliers for our Armed Forces, and open massive new opportunities for national manufacturers to build and export Canadian-made capabilities,” he stated.

Strategic Defense Purchases Under Review

Currently, Canada is reviewing its plans for next-generation fighter jet acquisitions. The government has already allocated funds for an initial purchase of 16 F-35 aircraft, but is also considering the Swedish-made Gripen as a viable option within a mixed fleet strategy. Negotiations regarding Canada’s involvement in the SAFE program are still ongoing, as Ottawa and the EU work towards finalizing a bilateral agreement.

This agreement aims to streamline the process for Canada’s participation and may allow for exemptions from certain regulations. Under SAFE, to qualify for funding, a project must ensure that no more than 35% of its component costs come from outside the EU, the European Economic Area, or Ukraine. However, countries can increase their access through financial contributions, a detail that remains under negotiation for Canada.

Potential Collaborations and Future Prospects

Discussions about Canada’s financial commitment to the SAFE program are still in the early stages. It is unclear whether the entry fee is a one-time payment or linked to specific procurement commitments. This issue previously hindered the United Kingdom’s negotiations to join SAFE last month, as both parties could not reach an agreement on the amount of financial support.

As Canada pursues ambitious procurement targets, Roger Hilton, a defense fellow at the Bratislava-based think tank GLOBSEC, noted that funding could extend to various defense technologies, including next-generation fighter aircraft, conventional submarines, and maritime domain awareness systems. He also indicated that Canada may explore SAFE options for drones, anti-submarine warfare platforms, and secure satellite communications.

Projects funded by SAFE require collaboration with at least two partners, which can include two EU member states or a member state alongside Ukraine or a country from the European Free Trade Association (EFTA). Hilton suggests that Canada will likely align with European partners that share common strategic priorities, particularly in areas such as Arctic security and North Atlantic defense.

“It is very probable that it will also gravitate towards states with the deepest aerospace and naval industries—most notably France, Germany, Italy, Sweden, and Spain—as they possess the industrial mass, design authority, and consortium models that SAFE favors,” Hilton explained.

As these discussions progress, Canada’s entry into the SAFE program marks a significant step in its defense strategy, potentially reshaping its military procurement landscape and strengthening ties with European defense initiatives.