{"id":78702,"date":"2026-09-21T17:40:45","date_gmt":"2026-09-21T17:40:45","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2026\/09\/21\/what-would-being-an-associate-member-of-the-eu-mean-for-the-canadian-economy-and-businesses\/"},"modified":"2026-09-21T17:40:45","modified_gmt":"2026-09-21T17:40:45","slug":"what-would-being-an-associate-member-of-the-eu-mean-for-the-canadian-economy-and-businesses","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2026\/09\/21\/what-would-being-an-associate-member-of-the-eu-mean-for-the-canadian-economy-and-businesses\/","title":{"rendered":"What would being an &#039;associate member&#039; of the EU mean for the Canadian economy and businesses?"},"content":{"rendered":"<p> \n<br \/><iframe loading=\"lazy\" title=\"Canada looks set to reverse exodus of capital\" width=\"1080\" height=\"608\" src=\"https:\/\/www.youtube.com\/embed\/mWAOW5Hd7lk?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p> <em>On Sept. 16 European Union president Ursula von der Leyen made a surprise invitation to Canada to become the European Union\u2019s first \u201cassociate member.\u201d However, this designation doesn\u2019t exist yet and it\u2019s not clear what privileges it would give Canada. While Prime Minister Mark Carney looks to strengthen other alliances as relations with the United States fray, Canadians may be wondering what this potential new relationship means for the country. The Financial Post spoke to international business professors and experts to determine what this new partnership could mean for Canada\u2019s economy, how it fits with our existing trade agreement with the EU and what Canadian businesses can expect moving forward.<\/em> <\/p>\n<h2>What would it mean to be an \u201cassociate member\u201d of the EU?<\/h2>\n<p> Because Canada is not geographically in Europe and is not looking to become a full member of the EU, \u201cI think what (associate membership) represents is an intent to deepen economic and other forms of co-operation between the EU and Canada,\u201d said Michael McAdoo, a partner and director in the global trade and investment practice at Boston Consulting Group Inc. <\/p>\n<p> During a news conference in Strasbourg, France, on Thursday Carney proposed an alliance with deeper co-operation in key economic sectors, in education and youth programs through the EU\u2019s Erasmus+ program and in research and innovation funding through the EU\u2019s Horizon program. <\/p>\n<p> Julian Karaguesian, an economic lecturer at McGill University, said he does not expect the partnership to allow for the free movement of people or a unified financial system, as full EU member status would, though it may potentially include \u201ca deeper, broader free-trade agreement.\u201d <\/p>\n<p> It could look like what was on the table for Ukraine. Earlier this year, German Chancellor Friedrich Merz floated the idea of Ukraine being granted the status of temporary associate member in the EU, which would have allowed the country to participate at EU summits and meetings, but with no voting rights (which Ukraine rejected). <\/p>\n<p> \u201cSo far, we have an invitation, without an agreed set of rights for Canadian businesses,\u201d said Andreas Schotter, a professor of international business at Western University\u2019s Ivey Business School, in an email. \u201cIt is too early to assume this means unrestricted market access or the right to work in Europe.\u201d <\/p>\n<p> Carney said the final structure of this alliance will be put up for debate and a final vote in Canadian Parliament. <\/p>\n<h2>How could CETA fit into this enhanced partnership?<\/h2>\n<p> The enhanced partnership would not need to address traditional aspects of a trade relationship, as Canada and the EU have an existing deal known as the Canada-European Union Comprehensive Economic and Trade Agreement ( CETA ). <\/p>\n<p> However, CETA is not yet in full effect. While 17 EU countries have completed ratification, 10 have not. \u201cMost of the agreement has applied provisionally since September 2017, including most tariff cuts on qualifying goods,\u201d Schotter said, adding that investment protection and an investment court for dispute resolution still await full ratification. <\/p>\n<p> Under CETA, about 98 per cent of EU tariff lines are duty free for Canadian exports. It allows for free trade in many industries, but not all, Karaguesian said. <\/p>\n<p> Karaguesian said if the remaining 10 countries that did not ratify CETA had concerns over Canadian products flooding their markets, they could be equally hesitant to include Canada as an associate member of the EU. <\/p>\n<p> A rising tide of nationalist sentiment in Europe could possibly block Canada\u2019s acceptance into the fold, as well. Mass immigration coupled with rising crime have sparked some backlash against globalization, Karaguesian added. <\/p>\n<h2>What do closer ties to the EU mean for the Canadian economy?<\/h2>\n<p> An enhanced alliance with the EU could potentially provide a boost to key sectors, encourage investment and support jobs. <\/p>\n<p> Carney said in a statement that Canada\u2019s \u201cabundant energy, critical minerals, world-class capabilities in space, artificial intelligence and quantum (technology), and one of the world\u2019s strongest banking systems,\u201d could be leveraged alongside the EU\u2019s market power, manufacturing and research strength. <\/p>\n<p> While ideas for collaboration abound, such as an announcement made Monday for collaboration between France and Canada on space systems, such projects take time and plenty of work. <\/p>\n<p> In the energy sector, for instance, Canada currently lacks enough midstream infrastructure, such as pipelines and refining, on the Atlantic Coast to send energy to Europe, which requires the resource due to sanctions on Russia, though the potential is there, Karaguesian said. Atlantic Canada possesses deep water, ports and geographical advantages, including proximity to the U.K. and the rest of Europe. <\/p>\n<p> However, \u201cIf we wanted to double or triple trade flows with Europe, particularly if we\u2019re talking about energy, this would take years,\u201d Karaguesian said. <\/p>\n<p> There is also the possibility of agricultural exports, particularly Canadian grains, though Europe\u2019s common agricultural policy which significantly benefits domestic farmers with subsidies presents a challenge. <\/p>\n<p> Shifting more in defence procurement spending to European countries may have multiple advantages. <\/p>\n<p> \u201cThe advantage for Canada is twofold: We reduce our reliance on the U.S. security umbrella, and, by virtue of spending on European defense systems, we get them to produce some of those things here (and create jobs) in Canada.\u201d <\/p>\n<p> Natural resources, particularly critical minerals, present another opportunity. \u201cEurope still has a lot of surplus capital, and we have a lot of investment opportunities,\u201d Karaguesian said. <\/p>\n<p> However, closer ties with the EU must still co-exist with a workable trading relationship with the U.S., Schotter said. \u201cCanada depends heavily on the U.S.\u201d <\/p>\n<p> The EU is Canada\u2019s second largest trading partner for goods and services, with a total value of approximately $178 billion in 2025, though this remains far behind the total value of Canada-U.S. trade of about the equivalent of $1.2 trillion. <\/p>\n<p> U.S. Sen. Susan Collins of Maine recently said in an interview that she believes Canada deepening its ties with Europe could make it harder for Ottawa and Washington to reach a deal to end the trade war. <\/p>\n<p> While deeper ties with the EU could curb some of Canada\u2019s reliance on the U.S., Walid Hejazi, an associate professor of international business at University of Toronto\u2019s Rotman School of Management said Canada would need to cut the costs of doing business in Europe in order to make the transition easier for its exporters. <\/p>\n<h2>What does this mean for Canadian businesses?<\/h2>\n<p> A closer relationship with the EU would entail Canada providing more access in its market to EU companies, creating more competitive pressures, said McAdoo. <\/p>\n<p> \u201cEvery time you open yourself up to greater competition, your local firms face competition, and that works both ways,\u201d he said, adding that he sees this as an opportunity for Canadian companies to become more competitive globally. <\/p>\n<p> Using the Airbus A220 plane as an example, he said, \u201cThe A220 combines Canadian aircraft design and production with Airbus\u2019s worldwide sales network,\u201d Schotter said. In May, AirAsia ordered 150 A220s, all to be assembled in Mirabel, Que. \u201cThat is a European partnership bringing work to Canada through an Asian customer.\u201d <\/p>\n<p> Airbus launched a technology hub in Mirabel in May, as well, he added. \u201cI would pay attention to whether these partnerships keep engineering and research in Canada, as well as assembly.\u201d <\/p>\n<h2>Could this add to red tape for Canadian businesses?<\/h2>\n<p> Canadian businesses should not assume closer ties with Europe would lead to less bureaucracy, Schotter said. <\/p>\n<p> Exporters to the EU need to comply with its standards, such as product labelling or safety. Legal advice and certification, as well as finding a distributor, all cost money, and while a larger, multinational firm could more easily absorb these expenses over its much larger sales and resources, a smaller Canadian manufacturer might not be able to afford pursuing a market in Europe, Schotter said. <\/p>\n<p> \u201cIf alignment with Europe leaves Canadian firms needing different product specifications or compliance systems for their American customers, some of the savings could disappear,\u201d Schotter said. <\/p>\n<p> Under CETA, recognized testing and certification bodies can already assess certain products against other markets\u2019 rules, Schotter said. However, it would be \u201ccritical\u201d to make these arrangements easier to use and extend them to more products, he added. <\/p>\n<p> At the Canada-EU summit in October, Schotter said he would be looking for commitments on certification costs and approval times, and later, whether companies gain repeat customers and expand production in Canada. <\/p>\n<p> <em>\u2022 Email: slouis@postmedia.com<\/em> <\/p>\n<ul class=\"related_links\">\n<li>Canadian tech startups are embracing the EU. But can they escape the pull of the U.S.?<\/li>\n<li>William Watson: Canada truly strong would stay out of Europe<\/li>\n<\/ul>\n\n<br \/>What would being an &#039;associate member&#039; of the EU mean for the Canadian economy and businesses?<\/a><br \/>\n<br \/>2026-09-21 17:40:45<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On Sept. 16 European Union president Ursula von der Leyen made a surprise invitation to Canada to become the European Union\u2019s first \u201cassociate member.\u201d However, this designation doesn\u2019t exist yet&#8230;<\/p>\n","protected":false},"author":2,"featured_media":78703,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-78702","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/78702","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=78702"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/78702\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/78703"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=78702"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=78702"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=78702"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}