THE DISPATCH

Part 3 of a 10 part series on the global reshaping.

The rise of the Medium Countries.

When Mark Carney walked Canada into the European Union’s Security Action for Europe (SAFE) initiative late last year, most coverage treated it as another incremental defence story, a loans-for-weapons program to help Europe rearm in the shadow of Russia and an unreliable Washington. That framing misses what’s actually happening: Ottawa just bought itself a front‑row seat in a €150‑billion (CAD $244‑billion) European rearmament fund and quietly turned Canadian lithium, nickel, and cobalt into geopolitical assets the EU can’t ignore.

SAFE is the financial muscle behind Europe’s Readiness 2030 plan, designed to move the EU from hand‑wringing to hard power by funding ammunition, missiles, drones, artillery systems, air defence, and the industrial base needed to build them at scale. Canada is the first non‑European country allowed inside that tent, gaining preferential access for Canadian defence firms to bid on European contracts and use low‑interest SAFE loans to co‑finance its own big‑ticket procurements. That alone would be historic. But in a medium‑countries world, the real leverage sits upstream, in the minerals that run through every battery plant, armoured vehicle, radar station, and missile factory Europe now needs to build.

From Critical Minerals to Critical Leverage

The EU’s Green Deal Industrial Plan and Critical Raw Materials Act (CRMA) set explicit targets: at least 10 per cent of strategic raw materials extracted, 40 per cent processed, and 25 per cent recycled inside the bloc by 2030, with no more than 65 per cent of any strategic material sourced from a single third country. That last number is the tell. Europe is trying to get off the China drip for lithium, nickel, cobalt, and rare earths, while still decarbonizing its grid, electrifying transport, and ramping up defence production.

Canada sits on exactly the basket Brussels needs. Federal mapping lists 34 critical minerals, with particularly strong positions in lithium, nickel, cobalt, graphite, and copper across Quebec, Ontario, Manitoba, and Atlantic Canada. Ottawa has already signed critical‑minerals MOUs with Germany, France, and the EU itself, and German industry groups now openly describe Canadian supply as foundational to their energy transition. SAFE doesn’t change the geology, it changes the political priority: when Europe plans out hundreds of billions in rearmament spending, it now has a medium‑country partner that can supply both weapons systems and the clean‑energy minerals needed to keep its factories and vehicles running.

In Edition 1, I talked about medium countries using “variable geometry”, bespoke coalitions built around specific interests instead of permanent blocs. SAFE is what that looks like in practice: Europe brings scale, capital, and industrial demand; Canada brings critical minerals, proven defence platforms, and a credible climate policy; together they build a supply chain that lets both sides reduce exposure to the whims of larger powers.

How SAFE Pulls Battery Supply Chains Through Defence

On paper, SAFE is about shells, drones, and air defences. In reality, modern defence and clean‑energy supply chains are the same plumbing. The batteries that power electric vehicles in Wolfsburg and Stuttgart are made from the same lithium, nickel, cobalt, and graphite that sit inside silent‑running submarines, armoured vehicles, mobile radar trailers, and field communications gear.

As European states draw on SAFE to finance joint procurement and new plants, several things start to happen:

• EU defence primes (think Germany, France, Scandinavia) now have a financial incentive to partner with Canadian firms that can secure reliable mineral supply and processing capacity.

• Battery and cathode producers that previously framed Canada as a nice‑to‑have now see it as an insurance policy: fail to diversify away from China and you risk disqualification from future EU procurement that’s increasingly tied to CRMA compliance.

• Canadian projects, lithium in Quebec, nickel and cobalt in Ontario and Manitoba, copper in B.C. and the Yukon, suddenly move higher on the investment priority list because they can de‑risk both automotive and defence programs at once.

In other words, SAFE is not just a weapons fund. It’s an accelerant that pulls battery‑grade mineral demand through defence budgets, creating a world where a lithium project in James Bay or a nickel‑cobalt mine in northern Manitoba can point to European rearmament as part of its demand thesis.

Medium Countries, Mirror Logic

If Edition 2 (Hanwha–Algoma) was about Canada and South Korea linking shipbuilding, steel, and space to route around U.S. tariffs, Edition 3 is about Canada and Europe mirroring that logic at continental scale.

• Europe gets a medium‑country ally with rule‑of‑law, ESG, and enormous critical‑mineral reserves to backstop its energy and defence transitions.

• Canada gets access to a CAD $244‑billion rearmament pool, preferential treatment in procurement, and a political reason for European investors to back mines, smelters, cathode plants, and even shipyards on Canadian soil.

• Both sides gain negotiating leverage when dealing with Washington and Beijing, because they’re no longer trapped in a binary choice between American weapons and Chinese minerals.

Medium countries are learning something the old order never wanted them to realize: once you control the inputs to both the green transition and the defence build‑out, you don’t have to beg anyone for relevance.

Why This Matters for Canadian Lithium, Nickel, and Cobalt

For Canadian mining, SAFE plus CRMA turns three familiar buzzwords, lithium, nickel, cobalt, into explicit negotiating chips.

• Lithium: Quebec already hosts multiple advanced spodumene and brine projects, with downstream processing and cathode plans in motion. Tie those into SAFE‑eligible defence platforms (armoured EV fleets, field energy storage, naval batteries) and you’ve got a stronger case for European debt, equity, and offtake.

• Nickel and cobalt: Manitoba, Ontario, and Newfoundland & Labrador offer class‑1 nickel and cobalt in politically stable jurisdictions, at a moment when Europe is trying to dilute its exposure to Russia and Indonesia. Feed those metals into both EVs and military vehicle platforms, and they become central to Europe’s energy security and deterrence posture.

• Processing and refining: SAFE’s low‑interest loans and procurement leverage give European primes and utilities more reason to co‑invest in Canadian refineries, smelters, and midstream capacity, something Ottawa has been trying to catalyze through its Critical Minerals Strategy but couldn’t fully finance alone.

The net effect: a junior miner pitching a nickel‑cobalt project today is no longer just “selling into EV demand.” It’s selling into a European defence‑energy complex that has to diversify away from single‑country risk and now has a financial instrument built to do exactly that.

If Europe is building bridges, Washington is busy lighting matches. Late Thursday, President Donald Trump went on Truth Social to announce he was “hereby decertifying…all aircraft made in Canada” and threatening a 50 per cent tariff unless Ottawa certifies a suite of Gulfstream business jets to his satisfaction. Legal experts point out he doesn’t actually have the authority to decertify aircraft, that sits with safety regulators, not tweetstorms, but the threat alone was enough to send Bombardier’s phones, and Ottawa’s switchboard, into meltdown.

In the next edition of this series, we’ll unpack what it means when aircraft certification and safety become weapons of trade, how vulnerable Canada’s aerospace cluster really is, and why medium‑country strategy matters when a hegemon decides to play chicken with your airworthiness certificates.

// THE DIRT

A Closing Thought

NOTES FROM THE NORTH

Kids are off on a diplomatic meeting to Ottawa today for the Rockland CSSHL Showcase. Hopefully they can keep the elbows down, at least while the refs are looking.

Have a good weekend all, going to head into Toronto with my wife tomorrow to see the sights, grab a bowl of Ramen and enjoy some time away.

-Lee

Nostalgia - The feeling you get when your youth says hello.