Canada to Back €90B EU Ukraine Loan to Deepen Transatlantic Ties

Canada is in talks to join the EU’s €90 billion loan for Ukraine as Prime Minister Mark Carney pushes for closer ties with Europe and less dependence on the U.S.

The two sides aim to agree on Canada’s contribution before an EU summit in Montreal at the end of October, according to people briefed on the discussions who spoke to the Financial Times.

The U.K. is the only other non-EU country participating in the Ukraine Support Loan.

“We are grateful for all the support that Canada is providing to Ukraine and we are ready to do more together,” one European official said.

Carney Deepens EU Push

The loan talks are part of a broader effort by Carney to align Canada more closely with European partners as relations with Washington deteriorate.

He is due in Europe this week to meet European Commission President Ursula von der Leyen in Strasbourg before traveling to Liverpool for talks with new U.K. Prime Minister Andy Burnham.

Canada has allocated C$6.5 billion, or $4.7 billion, in military assistance to Ukraine.

Carney and Ukrainian President Volodymyr Zelenskyy also signed a “100-year partnership” last Thursday. Kyiv faces a budget shortfall next year as the cost of its war with Russia rises.

Ottawa Looks Beyond Washington

Carney has sought to diversify Canada’s global relationships since taking office last year, arguing that the U.S.-centered international order is undergoing a “rupture, not a transition.”

His strategy has gained urgency after trade negotiations with Washington collapsed last month.

“You’re at war when you’re attacked, and we got attacked,” Carney said.

Ottawa is also seeking wider agreements with Brussels, including participation in an EU supercomputer network and a digital trade deal.

The two sides are working across six areas, including trade, security, critical raw materials, energy, clean technologies, visa liberalization and financial systems.

“It’s my strong personal view that the international order will be rebuilt, but it will be rebuilt out of Europe,” Carney said in May.

EU Sets Limits

Carney has also proposed an “association membership” model with the EU.

Brussels officials have distanced themselves from that label, given the bloc’s deeper arrangements with countries such as Norway, Türkiye and the U.K.

“We need to be realistic and pragmatic and manage Canada’s expectations,” one EU official said.

Another said: “The EU wants the closest possible relationship with Canada and that is what we are working towards.”

Mark Camilleri, president of the Brussels-based Canada EU Trade and Investment Association, said a sweeping new agreement remained unlikely in the near term.

But he said the relationship could help define what it “actually means to be a ‘trusted partner’ in the context of economic security.”

Trade Frictions Remain

Ten EU member states have yet to ratify the Canada-EU trade agreement that entered provisional effect in 2017 because of concerns over agricultural imports.

Brussels also wants Canada to reduce tariffs on EU steel and aluminum and soften its “Buy Canadian” policies before the Montreal summit.

The U.S. nevertheless remains central to Canada’s economy.

It has historically absorbed about 75% of Canadian goods exports, with annual bilateral trade worth about €620 billion. Canada’s trade with Europe was roughly €130 billion in 2025.

Canadian standards also remain more closely aligned with those of the U.S. than the EU because of Ottawa’s dependence on the American market.

That makes Carney’s European push a diversification strategy rather than a replacement for the U.S. relationship.