The Canada-EU partnership could soon become much deeper, extending beyond trade into defence, space, research and other strategic sectors. The European Union and Canada are preparing a broad new framework for cooperation as Ottawa seeks to diversify its economic and security relationships at a time of growing tensions with the USA.
European Commission President Ursula von der Leyen is expected to present the initiative during her State of the Union address to the European Parliament in Strasbourg on 16 September, according to reporting published by Sweden Herald and based on Bloomberg. Canadian Prime Minister Mark Carney is expected to attend and address the Parliament the following day.
A Canadian official told Bloomberg that Carney’s government has made closer relations with the EU a priority and is considering forms of integration covering almost everything short of EU membership. The two sides are particularly discussing what officials describe as “strategic capabilities”, including defence, space exploration and scientific research.
The Canada-EU partnership is expanding beyond trade
The project would build on a relationship that has already developed significantly over the past decade.
The Comprehensive Economic and Trade Agreement (CETA) has been provisionally applied since 2017. According to the European Commission’s latest trade figures, bilateral trade in goods and services reached €130 billion in 2025, an increase of 80% compared with 2016.
Trade in goods alone reached €81.5 billion, while services accounted for another €49 billion. The EU is now Canada’s second-largest trading partner after the USA, although the Canadian economy remains much more closely integrated with its southern neighbour.
The relationship has also moved well beyond commerce. At their June 2025 summit, Canada and the EU agreed to pursue a new, broader strategic partnership and signed a Security and Defence Partnership covering areas including defence industry cooperation, military mobility, cybersecurity, hybrid threats, maritime security, emerging technologies and space security.
That cooperation became more concrete in 2026. Canada joined the EU’s Security Action for Europe (SAFE) programme, becoming the first non-European country able to participate in the EU defence procurement instrument. SAFE provides up to €150 billion in loans to support joint defence procurement by participating EU member states.
Canada is reducing its dependence on the USA
The negotiations also reflect a wider change in Canadian foreign and economic policy under Carney.
Relations between Ottawa and Washington have deteriorated substantially during the second presidency of Donald Trump, particularly over trade. After negotiations between the two governments collapsed in August, the USA imposed 50% tariffs on around $20 billion of Canadian exports. Canada responded with tariffs on American products.
The dispute escalated again in September, when Washington announced restrictions on several Canadian imports. Reuters reported that the confrontation had encouraged Carney to push for a further shift away from Canada’s dependence on the USA, even though nearly 70% of Canadian exports still go to the American market.
The European opening is therefore better understood as diversification rather than a replacement of the USA. Canada remains deeply embedded in the North American economy and in NATO, while the EU-Canada Security and Defence Partnership itself states that NATO remains the cornerstone of collective defence for Canada and EU countries that belong to the alliance.
But Ottawa is increasingly trying to reduce the economic and strategic leverage created by excessive dependence on a single partner.
Carney has argued that the old international order is over
Carney publicly outlined this approach at the World Economic Forum in Davos in January.
In his speech on the changing international order, the Canadian Prime Minister described the current situation as “a rupture, not a transition” and argued that middle powers need greater strategic autonomy in areas including energy, critical minerals, finance and supply chains.
He also said that economic integration can become a source of vulnerability when tariffs, financial infrastructure or supply chains are used as political leverage. His conclusion was that countries such as Canada should diversify their relationships and cooperate more closely with other middle powers rather than relying on the restoration of the previous international system.
Closer integration with Europe fits directly into that strategy. Ottawa has spent the past year expanding partnerships with European governments in defence, critical minerals and technology, while Canadian companies have gained access to new European defence procurement opportunities.
Defence, space and research could be the next step
The precise legal architecture of the new Canada-EU arrangement has not yet been disclosed. Bloomberg reported that discussions are continuing over whether additional legal instruments would be required and how closely Canada could eventually integrate with selected European policies and markets.
Defence is likely to remain one of the central areas. Space cooperation also has an established base: Canada has a long-standing cooperation agreement with the European Space Agency (ESA), allowing Canadian companies and researchers to participate in selected European programmes and tenders.
Research, critical minerals, supply chains and advanced technologies could provide other areas where the two sides seek greater strategic integration.
The next major political step is already scheduled. The European Council lists an EU-Canada summit in Canada for 29 and 30 October, when the two sides could provide more detail on how the new partnership will work.
For Canada, closer relations with the EU are becoming part of a broader effort to build alternatives in a less predictable international system. For Europe, the partnership offers a close democratic ally with significant resources, technological capabilities and a strong presence in the Arctic and North Atlantic. What emerges from the negotiations could therefore become one of the clearest examples of how traditional Western alliances are being reorganised as relations with the USA become less predictable.
