Member states’ representatives endorsed the bilateral agreement with Canada under the ‘Security action for Europe’ (SAFE) regulation December 19.
Canada will be the first non-European country to participate in the SAFE instrument, the €150 billion defense instrument that supports those EU member states that wish to invest in defense industrial production through common procurement, focusing on priority capabilities.
This reflects the shared ambition of the EU and Canada to deepen their security and defense ties and to further strengthen joint defense cooperation, as set out in the Security and Defence Partnership signed at the Canada-EU Summit on 23 June 2025.
Details of the agreement
Under the SAFE instrument, procurement contracts will have to ensure that the cost of the components originating outside the EU, EEA-EFTA states and Ukraine is not higher than 35 % of the estimated cost of the components of the end-product. The agreement with Canada opens these eligibility conditions to allow for a greater participation of Canadian legal entities. The agreement foresees that such participation is subject to the payment by Canada of a financial contribution.
Next steps
The Council will be invited to authorize the formal signature of the agreement after legal scrubbing. Following the signature, the European Parliament will be requested to give its consent. Once the European Parliament has given its consent, the Council will be able to formally approve the agreement.
Background
In its conclusions of 6 March 2025, the European Council stressed that Europe must become more sovereign, and more responsible for its own defense and better equipped to act and deal autonomously to cope with immediate and future challenges and threats. At that European Council, all member states committed to strengthening their overall defense readiness, reducing strategic dependencies, while addressing critical capability gaps and strengthening the EDTIB accordingly so that the EU is in a position to better supply equipment in quantities and at the accelerated pace needed.
SAFE is the first pillar of the ReArm Europe Plan/Readiness 2030 presented by the European Commission. The other pillars are boosting national defense funding by activating the Stability and Growth Pact’s national escape clause; making EU instruments such as the cohesion funds more flexible to allow greater defense investment; complementing public funding with contributions from the European Investment Bank; and mobilizing private capital.
SAFE is also an important instrument to support Ukraine’s closer integration with the European defense industrial base, accelerating capability development, and enhancing Europe’s collective defense readiness in response to shared security threats.
19 participating countries submitted their National Defence Investment Plans under SAFE before the deadline of 30 November 2025. These plans are currently under review by the Commission.
The SAFE Regulation provides that the Union may conclude bilateral or multilateral agreements inter alia with third countries with which the Union has entered a Security and Defence Partnership, to open the Regulation’s eligibility conditions to these countries.
The EU and Canada signed a Security and Defence Partnership on the occasion of the 23 June 2025 EU-Canada summit.
