Britain will not join Canada’s defence bank, source says

Britain has decided not to join the Canada-led Defence Security and Resilience Bank (DSRB), according to a source familiar with the matter, though the two nations have expressed their intention to collaborate on defence funding initiatives. Both Britain and Canada announced on Sunday their agreement to create two separate yet complementary institutions to assist each other in investment opportunities and strategic challenges.

The statement emphasized their ongoing close cooperation to determine the optimal ways to advance their shared goals through the Multilateral Defence Mechanism (MDM) and DSRB. However, another source revealed that the two governments could not reach agreements on crucial aspects such as the location of the bank's headquarters, joint procurement levels, lending to members, and future member rules.

The MDM aims to accelerate defence investment, joint procurement through financing, and bring together NATO allies' demand to reduce costs, while the DSRB focuses on supporting investment in defence industries and supply chains, primarily through single sovereign lending. The DSRB has encountered difficulties in gaining support from larger European nations, a fact that Britain has previously acknowledged.

Despite these challenges, Britain and Canada maintain that the MDM and DSRB will work together in close partnership, enabling them to support each other on emerging industrial priorities, investment opportunities, and strategic financing challenges.