CIBC and Scotiabank are now partner banks for the Defence, Security and Resilience Bank (DSRB), the financial institutions announced in separate statements Tuesday.
The new multilateral international bank, still in development, will provide financing for defence, security and infrastructure projects for NATO members and its allies. Once it’s established, governments will be able to access low-cost financing and procurement support while private funding is protected by a credit guarantee program.
RBC is already a partner bank, along with German financial institutions like Deutsche Bank and Commerzbank, U.S.-based J.P. Morgan, and others.
Current defence spending among NATO members and its allies faces two problems: a lack of financing tools on the demand side and a lack of industrial capacity on the supply side, according to the DSRB. The bank hopes low-interest loans to national governments will ease borrowing costs while private capital increases industrial capacity for weapons and infrastructure.
Traditionally, defence spending consisted of national budgets, international funds from allies and private capital. The DSRB positions itself as a medium for public-private capital where the bank’s member nations become shareholders and bondholders, and private capital is backed by guarantees.
Last week, Canada joined discussions with more than 10 other countries on the DSRB. Isabelle Hudon, CEO of the Crown corporation Business Development Bank of Canada, will work with international partners to lead Canada’s contribution to the bank, federal finance minister François-Philippe Champagne said on X.
In December, the Ontario government launched a bid to make Toronto the DSRB’s home, which could bring 3,500 jobs to the city, it said in a release.
At the same time, Invest Ottawa led the National Capital Region’s bid to host the DSRB. “The city’s new defence innovation hub strategy will help position Ottawa to become a global defence hub,” Prime Minister Mark Carney said at the Ottawa mayor’s breakfast in December.