Canada has officially joined the Security Action for Europe (SAFE) initiative, a move that marks the first time a non-European Union country has participated in this program. Prime Minister Mark Carney signed the agreement this week, which is part of the EU's strategy to enhance its military industrial base by 2030. Membership provides access to 150 billion euros, or approximately C$243 billion, in loans aimed at supporting defense manufacturing.

In a joint statement, Carney and European Commission President Ursula von der Leyen described the agreement as a significant step in strengthening cooperation between Canada and the EU. They emphasized that it symbolizes shared priorities between the two entities. This announcement comes amid Canada's exploration of alternative military aircraft, including Sweden's Saab JAS 39 Gripen jets, as a potential substitute for the American-made Lockheed Martin F-35s.

Former Canadian Vice-Admiral Mark Norman, now a fellow at the Canadian Global Affairs Institute, noted that the primary motivation behind joining SAFE is to create industrial opportunities for Canadian suppliers. "This should, in theory, allow us to have more open access to European contract opportunities — assuming we are willing to help Canadian suppliers compete, which has been a historic failing of ours for decades," he stated.

The decision to join SAFE also reflects a desire to reduce Canada’s reliance on the United States for defense procurement. However, several questions remain unanswered regarding the implications of this membership. For instance, the Prime Minister's Office did not provide a breakdown of any costs associated with joining SAFE. While it stated that the agreement would unlock billions in potential defense opportunities for Canadian businesses, it did not clarify whether Canada would need to make direct financial contributions.

The United Kingdom recently opted not to join SAFE, citing concerns over the costs involved. This raises questions about whether Canadian taxpayers might face higher procurement costs in the future.

Another concern is the procurement rules of SAFE, which prioritize "Made in Europe" equipment. Projects must have at least 65 percent of their components produced within the EU's 27 member states. The UK had attempted to negotiate a lower threshold but was unsuccessful, contributing to its decision not to join. Additionally, each project requires collaboration between at least two countries, meaning Canada will need to align with European supply chains and standards.

The timing of Canada’s entry into SAFE coincides with heightened military spending among EU members in response to the ongoing war in Ukraine. This increased demand could lead to higher costs and potentially less favorable terms for non-EU countries like Canada. Furthermore, Canada may face longer delivery times for military equipment, as countries closer to the conflict, such as Poland and the Baltic states, are likely to be prioritized.

The impact of SAFE membership on Canada’s existing procurement plans is also uncertain. Currently, Canada is in the process of selecting new submarines, with options narrowed down to South Korea’s Hanwha Ocean and Germany’s ThyssenKrupp Marine Systems. It remains to be seen whether Canada’s new alignment with Europe will influence this decision, especially since Germany's submarines may have longer delivery timelines compared to their South Korean counterparts.

As Canada navigates this new partnership, it is crucial for the government to focus on specific platforms that address national needs, such as Arctic sovereignty and northern defense. The decision to source foreign products should be based on technical or cost advantages over domestic or U.S. options. For instance, leaked data from the initial procurement process indicated that the F-35 had a 95 percent suitability rating, while the Gripen scored only 33 percent.

In summary, Canada’s membership in SAFE presents both opportunities and challenges as the country seeks to enhance its defense capabilities while balancing its relationships with both European and American defense suppliers.