By The Canadian Press

Ottawa eyeing Ukrainian partnership, EU loans for defence equipment, minister says

Jun 26, 2025 | 10:27 AM

OTTAWA — Ottawa is considering whether to follow in the footsteps of several European nations by forging a new defence co-production deal with Ukraine for military equipment, Defence Minister David McGuinty said Thursday.

McGuinty said the idea is under “active consideration” by the Department of National Defence and the Canadian Armed Forces and the government is looking at Denmark and France as potential models.

Ukraine has become a world leader in combat drone technology over the course of its war with Russia, and countries such as the United Kingdom and Denmark have announced plans for co-operative equipment production projects with Kyiv.

“The Ukrainians have made huge strides and advances in drone technology, something that we’re actively looking at,” McGuinty said.

“There may very well be some interesting industrial benefits which would directly accrue to Canadian companies. That’s exactly what we’re looking at, to see what the best mechanism is.”

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McGuinty said federal bureaucrats are considering either financing domestic Ukrainian weapons construction or building equipment either here or in Ukraine.

U.K. Prime Minister Keir Starmer and Ukrainian President Volodymyr Zelenskyy announced a new agreement this week to share military technology. The agreement is meant to boost Ukrainian drone production and pipe technical data into the U.K.’s defence sector.

French carmaker Renault said earlier this month France’s defence ministry approached it about manufacturing drones in Ukraine.

McGuinty made the comments while speaking to Canadian reporters on a call from the embassy in Riga, Latvia, capping off his trip to Europe this week. This is McGuinty’s first visit as minister to Latvia, where some 1,900 Canadian Armed Forces members are currently deployed on a NATO deterrence mission.

His comments come on the heels of a massive defence spending announcement by Prime Minister Mark Carney at the NATO summit in The Hague this week. McGuinty said he met with about ten industrial leaders in The Hague to talk about Canada’s defence industrial strategy, which has not yet been finalized.

On Monday in Brussels, Carney announced that Canada and the European Union will negotiate a new security and defence procurement partnership.

McGuinty said Canada needs to be able to leverage European loans through that partnership.

He said Canada will first need to ratify more bilateral arrangements but will eventually be able to join up with other EU nations on bulk purchases.

“For example, if we’re procuring equipment for Canada, we’ll able to join with other states and use economies of scale to make sure that we pass on the savings for anything we purchase to the Canadian taxpayer,” he said.

He said Canada will be able to access loans in partnership with other European states, with a funding pool of roughly 150 billion euros (C$240 billion) backed by the EU budget.

This report by The Canadian Press was first published June 26, 2025.

Kyle Duggan, The Canadian Press