Britain in talks with Canada about joining defence bank

Britain is in talks with Canada about joining the Canadian-led defence financing bank, according to a Canadian government source.

The subject is expected to come up during Prime Minister Mark Carney’s trip to Britain this week, which will include Wednesday meetings with British Prime Minister Andy Burnham and a stop in Liverpool where the pair will watch an Everton Football Club match. Both men are fans of the club.

The Globe and Mail is not identifying the source because they were not authorized to speak publicly about the matter.

Canada has so far signed up eight other countries for the Defence, Security and Resilience Bank (DSRB), a financial institution that aims to provide long-term, low-cost financing for defence projects by its member countries.

However, the list lacks a second Group of Seven member. Members so far include Albania, Belgium, Greece, Latvia, Luxembourg, Romania, Turkey and Ukraine, which is fending off a Russian invasion.

Finance Minister François-Philippe Champagne will also discuss the subject with his British counterpart, Chancellor of the Exchequer John Healey, when the pair meet in London this week, the source said.

British media first reported that London was in talks with Canada to join the bank.

The source said there is appetite from Britain to join the bank and what remains is discussion of what form participation would take.

Britain’s interest in joining the Canadian-led defence bank comes as it works on a separate initiative, the Multilateral Defence Mechanism. This is a joint financing scheme being set up by Britain, the Netherlands, Finland and Poland to pool money for buying weapons together, and speed up defence spending among allied countries.

Both efforts are pooled-financing vehicles for allied defence procurement.

A second source with knowledge of the talks between Canada and Britain about the defence bank said it’s unlikely the two countries will reach a final decision this week on whether London would join. However, the source said that a lighter commitment, such as a joint statement, could be possible. The Globe is not identifying this source because they were not authorized to discuss the matter publicly.

The source added that conversations between Canada and Britain have been much more positive since Mr. Burnham took office in July. The source said if Britain joins the DSRB, others could follow, including Germany, a country that is also in talks about membership in the bank.

Mr. Healey has long been a supporter of the DSRB initiative, according to the BBC. The public broadcaster in June reported that he wanted Britain to join the Canadian-led bank even as he resigned as defence secretary from Keir Starmer’s government.

Countries all over the world are working to increase their defence spending and build up their industrial bases, spurred by rising geopolitical tension and pressure from the United States to become less reliant on it as a major military power. NATO allies, more specifically, have committed to increasing their annual defence spending to 5 per cent of GDP by 2035.

The Globe first reported in April that Canada had been chosen as the host country for the bank, meaning its headquarters will land in the country. Since then, Mr. Carney has been heavily campaigning for the institution and its benefits in meetings with other world leaders.

Canada’s federal government has said the defence bank is being set up to complement – not compete with or duplicate – other defence financing institutions such as Britain’s Multilateral Defence Mechanism or the European Union’s Security Action for Europe program. But without a critical mass of members, it’s difficult to tell which countries will see the need to join the DSRB if other tools are available to them.