Canada Joins European Union Defense Fund

Canada has joined a major European Union defense fund, Prime Minister Mark Carney's office said Monday, as the country looks to diversify its military spending away from the US. The plan allows Canadian defense companies access to a 150 billion euro—$170 billion US—EU loan program, known as Security Action for Europe. That would allow Canadians firms to secure cheap, EU-backed loans to procure military equipment, the AP reports. Canada is the first non-EU country to gain access.

Fund membership will allow Canadian companies to bid for contracts financed by the fund, the Globe and Mail reports. Canada will also be allowed to make joint weapons purchases with EU nations, saving money with large-scale buys. "Canada's participation in SAFE will fill key capability gaps, expand markets for Canadian suppliers, and attract European defense investment into Canada," Carney said in a statement. Carney has said he intends to diversify Canada's procurement and enhance the country's relationship with the EU. He has previously said that no more will over 70 cents of every dollar of Canadian military capital spending go to the US.

President Trump's actions—including launching a trade war and suggesting Canada become the 51st US state—infuriated Canadians and created the political environment for Carney to win the job of prime minister after promising to confront Trump's increased aggression. Carney's government continues to review the purchase of US F-35 fighter jets to explore other options. Carney has said the potential for having more production in Canada is a factor. A proposal by Sweden's Saab promised that assembly and maintenance of the Saab Gripen fighter jet would take place in Canada. Canada has said it will meet NATO's military spending guideline by early next year.