Canada to Sign Up to EU’s Flagship SAFE Defense Credit Fund

The EU and Canada have reached an agreement allowing Canada to join the €150 billion SAFE defense financing program. The initiative will help both sides strengthen defense cooperation, build more secure supply chains, and respond to growing global security threats, especially Russia’s aggression and reduced US defense support. SAFE offers low-interest loans for joint weapons purchases, and although it requires most components to be EU-made, Canada may receive exemptions. The UK showed interest but withdrew over the entry fee.

The EU and Canada announced on Monday that they had finalized an agreement that will allow Ottawa to take part in Europe’s €150 billion ($174 billion) SAFE defense financing instrument. This marks a major development in transatlantic defense cooperation, bringing Canada directly into an initiative that aims to strengthen Europe’s security capabilities and ensure more coordinated defense spending among allies.

In a joint statement, European Commission President Ursula von der Leyen and Canadian Prime Minister Mark Carney emphasized that the agreement represents an important milestone in the evolving partnership between both sides. They described the move as a significant step forward in deepening cooperation and a reflection of the shared priorities held by the EU and Canada. According to them, the collaboration aligns with broader goals of improving global stability, reinforcing collective defense readiness, and ensuring strategic resilience during uncertain geopolitical times.

They stressed that the SAFE initiative serves as a crucial instrument for improving coordination, meeting defense commitments, and channeling resources more efficiently. With rapidly shifting global security conditions, particularly in the wake of intensifying geopolitical tensions, both leaders noted that such cooperation is essential—not only for responding to short-term threats but also for preparing for long-term defense needs. They highlighted that the program offers a way for allied nations to work together more seamlessly by integrating their defense industries and ensuring secure supply chains for military equipment.

The SAFE (Security Action for Europe) mechanism is structured to provide low-interest loans to participating countries so that they can jointly procure weapons and military equipment with other partners. These loans are guaranteed through the EU budget, which helps reduce financial risk and makes it easier for member states and partners to access the funds necessary for strengthening their defense capabilities.

The initiative is part of the EU’s broader strategy to expand and modernize its defense industry. This effort has been largely driven by increased military aggression from Russia, particularly following its actions in Ukraine, as well as concerns that the United States may be stepping back from its previously consistent security commitments to Europe. With this shifting landscape, the EU has been seeking new ways to reinforce its autonomy and build stronger defense partnerships.

Canada’s decision to join the SAFE program comes at a time when it is also reassessing its defense dependency on the United States. In recent years, political tensions and rising hostility from the US Trump administration have pushed Ottawa to diversify its defense partnerships and reduce vulnerability to sudden policy shifts in Washington. Joining SAFE signals Canada’s intention to strengthen its ties with Europe and take a more active role in collaborative defense initiatives.

While the program requires that at least 65% of the components used for jointly funded arms purchases be manufactured within the EU, exceptions can be made for non-member partners like Canada. This flexibility allows the EU to expand its defense network while still maintaining a strong industrial base within Europe.

The United Kingdom had also expressed interest in joining SAFE but ultimately withdrew after disagreements over the financial contribution required for entry. Despite this, the EU continues to position the program as an open and strategic platform for strengthening defense cooperation with trusted partners around the world.