While Germany and Britain have distanced themselves from the proposed Defence, Security and Resilience Bank (DSRB), Canada is charging ahead — and it’s bringing its entire financial sector with it.
On Feb. 11, BMO became the latest lender to join the DSRB Development Group, completing a clean sweep of Canada’s Big Six banks. RBC, CIBC, Scotiabank, TD, and National Bank had already confirmed their participation in the NATO-backed multilateral financing initiative.
Finance Minister François-Philippe Champagne signalled Ottawa’s intent earlier this month, stating that Canada would play a “leading role” in establishing the institution, which is designed to lower borrowing costs for allied defence projects by leveraging collective credit strength.
The contrast in approach is sharp. Germany insists that defence financing should be handled through existing European Union mechanisms. Britain, meanwhile, has privately expressed scepticism that the DSRB would deliver better value for defence spending. Canada, by contrast, has mobilized its entire banking sector and deployed BDC chief executive Isabelle Hudon to lead international engagement on the file.
This is far from a symbolic show of support.
Under the proposed structure, DSRB member countries would serve as shareholders, injecting equity to back loans. Commercial banks — including Canada’s Big Six — would then provide lending to defence firms at reduced interest rates, backed by guarantees from the defence bank. Major global lenders including JPMorgan, Deutsche Bank, Commerzbank, and ING have also signed on.
For Canada’s banks, the move carries both geopolitical weight and tangible business opportunity. At home, the stakes extend beyond finance. Four cities — Montreal, Ottawa, Toronto, and Vancouver — are vying to host the DSRB headquarters, a prize that comes with an estimated 3,500 high-value jobs.
Prime Minister Mark Carney pledged last June to raise Canada’s defence spending to five per cent of GDP by 2035, far exceeding NATO’s current two per cent target. The DSRB, if realized, would provide a financing backbone for that ambition.
As two longtime allies step back, Canada is stepping forward — and trying to fill the void.
