Canada is joining the EU's flagship €150 billion ($174 billion) defence fund, dubbed SAFE, Brussels and Ottawa said on Monday.
In a joint statement, European Commission President Ursula von der Leyen and Canadian Prime Minister Mark Carney said the financing instrument was a way to strengthen cooperation in "these geopolitically turbulent times."
"It is a means to increase cooperation, meet defence targets and spend better, as we address short-term urgency and long-term needs," they said.
The Security Action for Europe (SAFE) Instrument is part of rearmament efforts in Europe intended to deter Russia from possibly attacking another European country after Ukraine.
Intelligence agencies believe that Russia will be in a military position to start another war by 2030 at the latest.
For NATO member Canada, the appeal of a closer relationship with the EU in the defence sector is likely to lie in reducing its reliance on the US as its most important ally.
President Donald Trump has repeatedly belittled its northern neighbour as "the 51st state" of the United States and referred to then-Canadian prime minister Justin Trudeau as governor, the title for the chief executive of a US state.
Ottawa's participation in the loan programme was "the next step in our deepening cooperation and symbolic of the shared priorities of the European Union and Canada," Carney and von der Leyen said.
Ukraine has been defending itself against a full-scale Russian invasion since February 2022 with significant support from Western allies, including the EU and Canada.
The SAFE loans, secured via the EU budget, are intended to enable countries to purchase air and missile defence, artillery systems, missiles and ammunition, drones and anti-drone systems and other military equipment.
