Canada's closer ties with EU may reshape defence landscape
Canada is in advanced talks with the European Union regarding participation in defence contracts, according to a report in "The New York Times" on Wednesday. The article highlights that Canadian companies may gain access to the EU market as an alternative to military equipment suppliers from the USA.
The agreement on Canada's participation in the European defence industry "will bring contracts to Canadian manufacturers and help reduce dependence on the USA," wrote the NYT. As per the newspaper, the discussions are well advanced.
According to NYT sources, both Canadian and EU, the talks involve including Canada in the EU's new defence initiative. This relates to both strengthening the EU defence industry and finding an alternative to arms supplies from the USA.
Alternative to F-35
The NYT emphasized that Canada could, for instance, be involved in ventures like the Saab Gripen fighter jet, which competes with the F-35 aircraft produced in the USA by Lockheed Martin. However, currently, discussions do not involve specific agreements.
Last week, Canadian media reported that Prime Minister Mark Carney commissioned a review of a 14 billion Canadian dollar plan to purchase F-35 aircraft from the USA, instructing Defence Minister Bill Blair to assess whether the contract with Lockheed Martin is the best investment from a Canadian perspective and if there are better options available.
Defence White Paper
The European Commission published a defence white paper on Wednesday. It identified areas within Europe's armament that require reinforcement, such as air and missile defence, artillery systems, ammunition, and the Eastern Shield to enhance land border protection.
The white paper, prepared by Lithuania's Defence Commissioner Andrius Kubilius, outlines Europe's rearmament plan, which was previously introduced by EC President Ursula von der Leyen. The plan proposes expenditures totalling 1,200 billion Canadian dollars. The white paper includes, among other things, loans amounting to 225 billion Canadian dollars for defence projects, relaxed fiscal discipline for member states on defence spending, and the possibility of reallocating EU budget funds. The leaders of the 27 member countries will discuss the proposal at the Brussels summit on Thursday.
EU-Origin Components
The EC has proposed that 65% of the funding from defence loans should be allocated exclusively to components originating from the EU. However, some flexibility will be granted if technology, such as that from the USA or the UK, is difficult to replace. The white paper emphasized that the presence of American armed forces in Europe has contributed to the continent's dependence on the USA.
Third countries entering a "security and defence partnership" with the EU can participate in tenders.
According to the NYT, Canada could be admitted on preferential terms to the EU market as an alternative to suppliers from the USA.
On Sunday, before his visits to Paris and London, Carney discussed the ReArm Europe Plan with von der Leyen. The Prime Minister of Canada wrote on Platform X that the conversation concerned "the ReArm Europe Plan and Canada’s role in strengthening defence at home and abroad." Carney added that Canada is making new investments in defence and "working with allies."
"Financial Times" reported on Wednesday that companies from the USA, the UK, and Turkey will be excluded from tenders within the 225 billion Canadian dollar loan plan unless their governments sign defence and security agreements with Brussels.
