Canada has reached a final agreement to join the EU’s €150 billion Security Action for Europe program, two EU diplomats told POLITICO, marking the first time a third country will formally participate in the bloc’s flagship joint procurement initiative.

The breakthrough follows months of technically complex negotiations and was communicated directly to ministers taking part in Monday’s Foreign Affairs Council; Defense Commissioner Andrius Kubilius informed delegations that negotiations with Ottawa had concluded. 

Canada’s accession to the loan-for-weapons SAFE scheme gives Ottawa access to jointly financed defense projects and allows Canadian companies to bid into EU-supported joint procurement projects. For Brussels, securing a G7 partner strengthens the credibility of SAFE as it seeks to coordinate long-term weapons demand and ramp up Europe’s defense industrial base.

Under SAFE, third countries can account for a maximum of 35 percent of the value of a weapons system paid for by the scheme; Canada will be able to have a larger share but it will have to pay a fee “commensurate with the benefits the Partner Country and its entities are expected to derive,” factoring in GDP, industrial competitiveness and the depth of cooperation with European manufacturers.

Other issues tackled in negotiations covered conditions on intellectual property control and limits on non-EU inputs for sensitive systems including drones, missile-defense assets and strategic enablers.

Similar talks with the U.K. broke down on Friday.

The timing aligns with a major SAFE milestone: Kubilius announced on X that all 19 participating EU countries had submitted their spending plans that will be financed by low interest SAFE loans.

He added that 15 members included support for Ukraine in their plans, involving “billions, not millions” — something the Commission has been keen to encourage.

This article has been updated.