Canada will soon be home to the West’s piggy bank for all things military.
What happened: Canada has been chosen as the host nation of a new global defence bank that will provide cheap, long-term funding for defence projects, per The Globe and Mail. The Defence, Security and Resilience Bank (DRSB) will include up to 40 countries, including NATO members and their allies.
The DSRB, which will be funded by public contributions from its member countries, will provide loans to military equipment suppliers (including startups in need of cash) as well as governments looking to buy new gear.
Why it matters: The feds have committed to giving 70% of all defence contracts to Canadian companies by the end of the decade. To meet the sudden surge in demand for homegrown defence equipment, experts say Canadian firms will need a lot more cash to ramp up production.
Zoom out: Few countries are more reliant on American defence contractors than Canada, but after spending $63 billion on defence this year, Ottawa’s domestic defence push is gaining traction.
NATO has reportedly selected the GlobalEye aircraft, built by Canada’s Bombardier and Sweden’s Saab, to replace its fleet of Boeing surveillance planes. The deal, which is likely worth north of €5 billion, is expected to lead to more plane production in Canada.
Meanwhile, South Korea’s Hanwha — one of the finalists for a contract to build Canada’s next submarine fleet — promised to build its armoured vehicles in Canada with local auto parts and workers as a sweetener for its submarine bid.
What’s next: We’ll find out soon which city will serve as the home base for the new defence bank (Toronto, Montreal and Vancouver have all lobbied to host). The Ontario government said hosting the DRSB would create 3,500 new jobs in Toronto.—LA
