UK-Canada Joint Statement: UK Allocates £400 Million to MDM Alongside Canada-Led DSRB Defence Bank, Both Aiming for 2027 Launch

United Kingdom

HM Treasury and the Department of Finance Canada issued a joint statement on October 25. It was posted on the UK government website on October 25 under the title "Joint statement from HM Treasury and Department of Finance Canada," and the same text was published on the Department of Finance Canada website datelined Ottawa (October 25). In the statement, the two countries wrote that they "reaffirm their commitment to transforming our collective defence capabilities by strengthening defence financing and increasing the efficiency of spending." The statement addresses two institutions. One is the Multilateral Defence Mechanism (MDM), which the UK is pursuing alongside the Netherlands, Finland, and Poland as a new financial mechanism to aggregate defence demand across multiple countries for joint procurement. The other is the Canada-led Defence, Security and Resilience Bank (DSRB), a multilateral bank providing long-term, low-cost financing for defence, security, and resilience projects.

The UK and Canada concluded the two institutions are "distinct yet complementary" and decided to develop a cooperation framework

In the statement, the two countries wrote that they "have closely examined how the MDM and DSRB can best advance our shared objectives," and "have agreed to develop a framework for cooperation that is in the interests of both institutions." The statement continued, "We have mutually concluded that the best approach is to develop both institutions in partnership, recognizing they are distinct yet complementary." The two nations stated that once operational, the institutions are designed under a close partnership so that they "support each other across emerging industrial priorities, investment opportunities, and strategic financing challenges." The statement concludes with the sentence: "Together, both institutions will offer complementary avenues to bolster defence industrial bases and enhance collective defence readiness." The body of the statement contains no figures regarding funding amounts or member country counts, with those figures found in previously released documents from both governments.

François-Philippe Champagne, Canada's Minister of Finance, posted on X at 5:31 p.m. on October 25 (UTC, 2:31 a.m. on October 26 KST): "See joint Canada-United Kingdom statement below."

The UK government allocated £400 million as its contribution to the MDM in its Defence Investment Plan funding explainer on June 30

HM Treasury and the Ministry of Defence wrote in "The Defence Investment Plan Funding explainer" released on June 30 that they are "allocating £400 million as the UK’s contribution to the MDM." The Defence Investment Plan (DIP) is a defence investment plan outlining what and how much the UK will purchase over the next four years. The government wrote that these funds will "enable joint procurement with allies, supporting larger spending and the defence industrial base." In the same document, the government confirmed an additional £15 billion for the DIP over four fiscal years from 2026-27 to 2029-30, stating that the total Ministry of Defence budget over the four years stands at £297.7 billion, with defence investment under the DIP totaling £298 billion. The government wrote that starting in the 2027-28 fiscal year, it will raise core defence spending under NATO criteria to 2.7% of gross domestic product (GDP), solidifying its position as the "third-largest NATO cash spender behind the US and Germany," and honoring its commitment alongside NATO allies to spend 3.5% of GDP on defence by 2035. The government stated that out of the £15 billion, £4.7 billion is confirmed in the 2026 budget, and that a new £50 billion Defence Export facility will be established to help UK defence firms export. The government also noted that all allies will jointly review their spending paths in 2029 when NATO reassesses capability planning.

The MDM began on March 17 of this year. HM Treasury posted a joint statement from Finland, the Netherlands, and the United Kingdom on that day, writing that "threats from malign actors, including Russia's aggression against Ukraine, are causing global instability." The three countries stated they were "exploring establishing a new financial mechanism by 2027," outlining the objective as "aggregating demand, driving joint procurement, accelerating defence investment, and increasing the availability of key capabilities, such as ammunition." Eelco Heinen, Minister of Finance of the Netherlands, said on the day, "This mechanism is a new way of defence cooperation with European partners, and is open to like-minded Western partners inside and outside the EU." Antti Häkkänen, Minister of Defence of Finland, said, "Participating from the outset provides the opportunity to influence what such a mechanism will look like."

On July 6, the four nations of the UK, the Netherlands, Finland, and Poland issued a joint statement ahead of the NATO Summit in Ankara. The four countries wrote that they "will move quickly into formal treaty negotiations, respecting national ratification processes, and maintain the collective ambition of establishing the MDM by 2027." The four nations noted that "alongside key partners, we will expand the MDM into a wider coalition of participating nations," and that in the autumn they will "move into the next phase of design and development of the mechanism alongside partners that have expressed an interest in joining." The four countries also included a clause in the statement stating they would "ensure that emerging approaches to international defence finance are aligned and complementary." Rachel Reeves, then Chancellor of the Exchequer at the time of the statement's publication, said, "European defence procurement is too fragmented, expensive, and slow," and that she was "delighted to welcome Poland to the MDM." Dan Jarvis, then Defence Secretary, said in remarks added to the text on July 7, "Building this mechanism alongside our European and NATO allies will enhance our deterrence and defence." In the same statement, the four countries wrote that they "continue to support Ukraine to defend its sovereignty and resist Russian aggression."

The Department of Finance Canada announced the conclusion of DSRB charter negotiations on April 29, and leaders of nine nations declared their intention to establish it in Ankara on July 7

The Department of Finance Canada stated in a press release datelined Montreal on April 29 that multilateral negotiations on the DSRB Charter (the founding statute of the institution) had concluded. The department wrote that the DSRB will "provide long-term, low-cost financing for defence, security, and resilience projects across supply chains, helping small and medium-sized enterprises and member governments fill financing gaps." The department noted that participating nations unanimously agreed that Canada, which hosted the negotiations, would serve as the host country for the DSRB headquarters once ratifications are complete. Minister Champagne said on the same day that "the time to act is now" and described the negotiations as a "critical step toward moving the DSRB from concept to reality." The department wrote that the Defence Industrial Strategy released by the Prime Minister of Canada on February 17 incorporated a "Build-Partner-Buy" procurement framework, and noted that Isabelle Hudon, President and CEO of BDC (Business Development Bank of Canada), served as Canada’s chief negotiator. The department stated that Canada achieved NATO's 2% of GDP spending target in the current fiscal year and is on track with the NATO Defence Investment Pledge to spend 5% of GDP on defence by 2035, adding that the defence plan in Budget 2025 includes more than $80 billion (noted in the original text as "$80 billion") in investments.

On July 7, the leaders of nine nations—Canada, Albania, Belgium, Greece, Latvia, Luxembourg, Romania, Türkiye, and Ukraine—issued the "Declaration on the Defence, Security and Resilience Bank" at the NATO Summit in Ankara. In the declaration published on the website of the Romanian Presidency, the leaders wrote of the "need to mobilize public and private capital on a large scale for defence, security, and resilience priorities" and stated their "shared intention" to establish the DSRB. The declaration stated that the DSRB is "designed to expand access to capital, lower financing costs, and support member nations in expanding industrial capacity," and that it "is intended to complement, rather than duplicate, other national and multilateral instruments." The leaders wrote that they would pursue establishment so that the bank can "begin operations as early as 2027." The official account of the Prime Minister of Canada posted on the same day: "Eight countries commit to supporting the Canada-led Defence, Security and Resilience Bank."

Both institutions already have membership structures and launch targets defined in documents, and Canada will table its federal budget on November 5

Comparing the official documents side by side, the structures are as follows. The MDM has four member countries—the UK, the Netherlands, Finland, and Poland—with a target establishment year of 2027. For the DSRB, leaders of nine nations including Canada declared their intention to establish it, with operations targeted to begin as early as 2027. The UK has allocated £400 million to the MDM, and Canada is the host country for the DSRB headquarters. The UK outlined in government documents a trajectory to spend 2.7% of GDP on defence starting in the 2027-28 fiscal year, while Canada outlined a trajectory to spend 5% of GDP on defence by 2035. The UK government stated that out of £15 billion in DIP funding, £4.7 billion is confirmed in the 2026 budget, and the Department of Finance Canada announced on X on October 20 that "the federal budget will be tabled on November 5, 2026."

Sources (KST)

• HM Treasury, "Joint statement from HM Treasury and Department of Finance Canada" (October 25, 2026): https://www.gov.uk/government/news/joint-statement-from-hm-treasury-and-department-of-finance-canada
• Department of Finance Canada, "Joint statement from Canada and the United Kingdom" (October 25, 2026, Ottawa): https://www.canada.ca/en/department-finance/news/2026/10/joint-statement-from-canada-and-the-united-kingdom.html
• UK Government, "The Defence Investment Plan Funding explainer" (June 30, 2026): https://www.gov.uk/government/publications/the-defence-investment-plan/the-defence-investment-plan-funding-explainer
• HM Treasury, "Joint statement from member countries of the Multilateral Defence Mechanism" (July 6, 2026): https://www.gov.uk/government/news/joint-statement-from-member-countries-of-the-multilateral-defence-mechanism
• HM Treasury, "Joint statement from Finland, the Netherlands, and the United Kingdom on joint defence financing and procurement" (March 17, 2026): https://www.gov.uk/government/news/joint-statement-from-finland-the-netherlands-and-the-united-kingdom-on-joint-defence-financing-and-procurement
• Department of Finance Canada, "Canada welcomes progress towards the establishment of the Defence, Security and Resilience Bank and hosting its headquarters" (April 29, 2026, Montreal): https://www.canada.ca/en/department-finance/news/2026/04/canada-welcomes-progress-towards-the-establishment-of-the-defence-security-and-resilience-bank-and-hosting-its-headquarters.html
• "Declaration on the Defence, Security and Resilience Bank" (July 7, 2026, published by Romanian Presidential Administration): https://www.presidency.ro/en/media/press-releases/declaratia-privind-intentia-comuna-de-infiintare-a-bancii-pentru-aparare-securitate-si-rezilienta-declaration-on-the-defence-security-and-resilience-bank
• Minister of Finance Champagne X post (October 25): https://x.com/FP_Champagne/status/2114409404028297559
• Department of Finance Canada X post (April 30): https://x.com/FinanceCanada/status/2049915463124046152
• Prime Minister of Canada X post (July 7): https://x.com/CanadianPM/status/2074503267854229745
• Department of Finance Canada X post (October 20, federal budget tabling date): https://x.com/FinanceCanada/status/2112621161670443209