Canada is evaluating a possible defense co-production agreement with Ukraine that could include manufacturing military equipment and drones together, according to Canadian Defense Minister David McGuinty.

Production collaboration under review

Speaking to reporters on 26 June, McGuinty confirmed that the idea of how Canada could partner with Ukraine in military production is under “active consideration” by the Department of National Defense and the Canadian Armed Forces, The Globe and Mail reports. The government is looking to models already adopted by countries like Denmark and France, which have signed similar agreements with Kyiv.

“The Ukrainians have made huge strides and advances in drone technology, something that we’re actively looking at,” McGuinty said, adding that potential industrial benefits for Canadian companies are also being considered.

McGuinty explained that Ottawa is exploring two primary options: financing weapons production inside Ukraine or manufacturing equipment in Canada. The final decision would depend on what mechanism would bring the most value to both countries.

McGuinty’s European tour and defense spending talks

McGuinty’s statements came at the end of his European visit, his first as Defense Minister to Latvia. Approximately 1,900 Canadian Armed Forces members are stationed in Latvia as part of NATO’s ongoing deterrence mission.

He also attended the NATO summit in The Hague this week, where Prime Minister Mark Carney made a significant announcement: Canada will implement its largest defense budget increase since the Second World War, aiming to double military spending by 2035.

McGuinty said the new Canada-EU procurement partnership could allow Ottawa to access loans from a European pool worth approximately $240-billion. These loans are backed by the EU budget and would enable Canada to take part in bulk equipment purchases alongside European countries, allowing savings for Canadian taxpayers.