France defence procurement: SAFE and new pathways for Canadian firms
European defence procurement has entered a new phase defined by urgency, scale and co-ordination. In 2025, Canada became the first non-European Union (EU) country to participate in SAFE, the EU’s Security Action for Europe instrument, which provides up to €150 billion (about C$220 billion) in defence-related loans to EU member states.
For Canadian firms, SAFE participation matters. It’s reshaping how defence contracts are financed and awarded, including those related to France’s Military Programming Law.
As a trusted partner outside the EU, Canada offers manufacturing capacity aligned with North Atlantic Treaty Organization (NATO) standards, strong export controls and long-term policy commitment. SAFE creates a pathway for Canada and France to move beyond ad hoc transactions toward more structured co-operation, particularly in upstream components and industrial inputs critical to sustained production.
Critical minerals: Canada’s role in France’s battery supply chain
With France positioning itself as a leader in Europe's electric vehicle (EV) battery production, its reliance on critical mineral imports, particularly from China, creates supply chain vulnerabilities.
Canada is well-positioned to help fill these gaps as a trusted, like-minded partner supplying France’s “Battery Valley” gigafactories in the Hauts-de-France region.
Graphite presents the most immediate opportunity. France lacks graphite processing capacity, while China controls roughly 85% of global battery anode material production. France also faces shortages of nickel and cobalt, and planned domestic lithium production is expected to fall short of future demand. In most cases, Canadian capabilities could help fill the gap, and the policy framework needed to support these supply chains already exists.
In September 2023, Canada and France launched a bilateral critical minerals dialogue, with partnerships extending to Quebec and Saskatchewan. France has also established a €2-billion (about C$2.9 billion) critical metals investment fund, including €500 million (about C$735 million) in French state capital earmarked for mining investments, including in Canada.
The bottom line: Why France is a priority market for Canadian exporters
Shared language, deep cultural ties and growing political alignment make Canada and France natural commercial partners. In an increasingly uncertain global environment, these connections matter more than ever.
France’s industrial strategies in defence, energy and batteries are designed to rebuild strategic capacity and reduce supply chain risk. Canada brings scale in critical minerals, credibility in defence co-operation and a policy framework that already supports deeper engagement through CETA, bilateral dialogues and EU-level instruments such as SAFE.
For Canadian exporters, France is emerging as a central destination for expanding a European footprint. What began as a pragmatic trade relationship now has the potential to evolve into genuine strategic integration, driven by confidence, trust and shared ambition.
This week, a very special thanks to Sasan Fouladirad and Hani Wannamaker, analysts in our Economic and Political Intelligence Centre.
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