Canada in talks with U.K. about merging defence financing institutions

LIVERPOOL — The United Kingdom and Canada are talking about merging their proposed defence financing initiatives to amplify their effects, a senior Canadian government official said Wednesday. The official, who was briefing reporters on background, said Ottawa is very confident they’ll reach an agreement on bringing the two proposals together to form a joint institution, though that decision might not emerge from meetings this week. Prime Minister Mark Carney has championed the creation of a global Defence, Security and Resilience Bank to supply allies with low-cost borrowing for defence.

He’s enlisted support for that venture from eight countries, including Latvia, Luxembourg, Greece, Belgium and Ukraine. But no G7 country other than Canada has signed on. The United Kingdom’s separate effort, called the Multilateral Defence Mechanism, is designed as a financing vehicle for joint purchases of military equipment and has won support from the Netherlands, Finland and Poland.

Carney stopped in Liverpool Wednesday for his first meeting with British Prime Minister Andy Burnham, who recently took office after Keir Starmer resigned over the summer. British media first reported this week that Burnham’s finance minister, John Healey, is considering joining the Defence, Security and Resilience Bank. issued a joint statement at the annual NATO summit in Ankara, Turkey, this summer on how the two financial institutions could work together.

The statement said the two countries want to ensure their “respective initiatives develop in a coherent and mutually supportive way” and will “seek opportunities to co-operate closely and ensure complementarity.” Money put into the defence bank counts toward the NATO target of having alliance members spend the equivalent of five per cent of their GDP on defence by 2035. The head of Canada’s Business Development Bank, Isabelle Hudon, is working as the lead negotiator for the defence bank. is allocating $749 million toward the Multilateral Defence Mechanism and aims to stand it up in 2027.

The Canadian government official also said Carney has been involved in a series of conversations about the Joint Expeditionary Force, a U.K.-led multinational Arctic security military coalition. Canada is not a full member of that force but has worked with it in the past. The official said Canada’s relationship is expected…