Canada and the European Union (EU) are entering a period of significant strategic alignment. The Comprehensive Economic and Trade Agreement (CETA) has deepened trade and investment flows; cooperation on critical minerals, clean technology, and digital regulation is accelerating; and NATO’s renewed relevance has drawn Canada and Europe into closer defence industrial coordination. Yet this integration is unfolding at the same time that economic and industrial espionage has become a defining national security challenge for advanced economies.  

Canadian and European intelligence agencies warn that hostile states are intensifying efforts to extract sensitive knowledge by exploiting structural weaknesses in technology research and supply chain systems. The Canadian Security Intelligence Service (CSIS) notes that foreign states “seek to acquire the supply chains of the future” and target sectors including critical minerals, clean tech, artificial intelligence, quantum research, and universities (CSIS 2024, 10). The EU’s Economic Security Strategy similarly identifies technology leakage, cyber‑enabled espionage, and the weaponization of economic dependencies as core risks to European competitiveness and sovereignty (European Commission 2023).  

As Canada and Europe integrate their innovation ecosystems, vulnerabilities in one system increasingly extend to the other. The politics of “trusted partners” therefore becomes central: how can Canada and Europe deepen cooperation while ensuring that sensitive technologies, research, and intellectual property (IP) do not leak through each other’s regulatory or institutional gaps? Sustaining meaningful collaboration will require an economic security architecture that protects shared assets through consistent and mutually reinforced safeguards across both jurisdictions.

A Shared Threat Landscape

The rise of cyber‑enabled economic espionage

Economic espionage has become a defining feature of the contemporary security environment, marked by cyber‑enabled operations that are increasingly sophisticated and scalable transnationally. Research institutions and small and medium-sized enterprises (SMEs) are disproportionately vulnerable, and legal fragmentation across jurisdictions creates exploitable gaps. As Carl (2017) notes, the traditional labels used to distinguish forms of espionage obscure the reality that hostile actors target whatever channels – whether corporate, academic, or state‑linked – offer the least resistance.

Policy frameworks emerging on both sides of the Atlantic now reflect this threat convergence. The EU’s Economic Security Strategy identifies four categories of risk – supply chain resilience, critical infrastructure security, technology leakage, and economic coercion – each of which maps closely onto Canadian threat assessments (European Commission 2023). Canada’s 2024 and 2025 CSIS public reports similarly warn that foreign states are targeting Canadian universities, clean tech firms, and critical minerals supply chains through mechanisms like cyber intrusions, covert talent recruitment, or the manipulation of research partnerships (CSIS, 2024; CSIS, 2025). In both jurisdictions, the sectors most central to green and digital transitions are also those most exposed to foreign interference.

This shared threat environment is reinforced by the evolution of cyber-enabled IP theft. The EU Institute for Security Studies describes such activity as a “silent siege” against European innovation systems, exploiting the “interconnectedness of online and offline domains” to extract sensitive technologies at scale (Kovalčíková 2024, 3). Parallel analysis from the Information Technology and Innovation Foundation shows how Chinese economic espionage has evolved from external penetration to insider access, increasingly leveraging joint ventures, research partnerships, and talent programs to gain access to proprietary knowledge (Tromblay 2025).

Assessing the economic stakes

The economic costs of trade secret theft are substantial and illustrate why economic security has become inseparable from broader strategic policy. A study from the Centre for International Governance and Innovation (CIGI) estimates that global losses from trade secret theft range from one to three percent of GDP in advanced economies, with cyber‑enabled theft representing an increasingly significant share of this total (Durand and Briggs 2025). A complementary analysis argues that IP is now deeply intertwined with national security, as strategic technologies such as artificial intelligence, quantum computing, and advanced materials are simultaneously commercial drivers and dual‑use assets central to geopolitical competition (Ciuriak and Ptashkina 2021). For Canada and the EU, the protection of IP has therefore become a prerequisite to sustaining technological leadership and preserving geopolitical autonomy.

Theft of proprietary technology transfers something more consequential than revenue: strategic optionality. The victim state loses the ability to set terms, such as export controls, standards, or licensing conditions, over a technology it can no longer exclusively control, while the recipient state gains capability without the dependency it would have incurred through legitimate acquisition. Canada and the EU have each experienced this firsthand. Nortel, once the world leader in fibre optics equipment, collapsed in 2008 after its designs were found to have been exfiltrated years earlier. Qualcomm's USD $44 billion bid to acquire NXP, Europe's second largest semiconductor manufacturer, similarly collapsed after Chinese regulators withheld approval, two years after hackers had spent roughly two and a half years undetected inside NXP's network stealing chip designs (Hogeveen 2024). Whether the stolen data shaped the regulatory outcome remains unresolved, but the cases illustrate how theft can quietly convert a commercial and technological advantage into strategic leverage for the state that acquired it.

Integration as a Source of Shared Vulnerability

High‑value sectors under pressure

Canada and Europe are integrating across the precise sectors that foreign intelligence services have identified as strategically valuable. Canada’s critical minerals reserves are indispensable to Europe’s green transition, and joint ventures in clean technology and battery manufacturing are expanding accordingly (European Commission n.d.; CSIS 2024). At the same time, Canada’s alignment with the EU’s rights‑based digital governance model in artificial intelligence and data regulation has created new channels for regulatory cooperation (European Commission n.d.; Gehrke and Medunic 2024). Defence industrial collaboration through NATO adds another layer of interdependence, requiring secure cross‑border supply chains for advanced materials and emerging dual‑use technologies. Canadian universities are also becoming more deeply embedded in Horizon Europe, the EU’s flagship research and innovation program, further knitting together the two innovation ecosystems (European Commission n.d.).

Evidence of converging vulnerabilities

Recent developments in both Canada and Europe illustrate how these pressures materialize. In Canada, the 2022 Hydro‑Québec battery research espionage case involved a researcher charged with attempting to steal proprietary technology for the benefit of China. CSIS has cited this incident as emblematic of state‑directed efforts to penetrate Canada’s clean tech sector and public research institutions (CSIS 2025).

European intelligence reporting reveals parallel dynamics. German intelligence services report that China and Russia systematically target Mittelstand firms – SMEs that hold “vast special know‑how” yet often lack robust security capacity (Carl 2017, 1320). In the United Kingdom, cyber intrusions have repeatedly targeted university research, with 98 percent reporting breaches within the past year (Department for Science, Innovation and Technology 2025). French intelligence services have documented attempts to infiltrate critical sectors and supply chains through compromised subcontractors, demonstrating how adversaries exploit the complexity of European industrial networks (Mayet 2026). Such cases show that Canada and Europe are not confronting separate challenges but a shared threat landscape in which vulnerabilities converge as quickly as their cooperation deepens.

Complementary Strengths, Misaligned Systems

Canada and Europe bring complementary strengths to the emerging economic security agenda. The EU has developed a dense regulatory architecture – ranging from the Foreign Direct Investment Screening Regulation and dual‑use export controls to NIS2 cybersecurity rules and research security guidelines – that gives it strong preventive capacity and a structured approach to managing technology leakage (García Bercero and Poitiers 2025). Canada’s comparative strength lies in intelligence awareness, with its government agencies offering detailed public reporting on foreign interference targeting democratic institutions and research ecosystems (NSICOP 2024).

However, despite similar threat assessments, the two systems do not yet align. The European Council has already acknowledged that economic security requires “coherent, targeted, and up‑to‑date” coordination across trusted partners, not only within the EU (Council of the European Union n.d.). Canada and Europe thus find themselves in a paradox: each possesses strengths the other lacks, yet the absence of structured coordination prevents those strengths from reinforcing one another. Closing this gap is essential if the partnership is to move from parallel efforts to a genuinely shared economic security architecture.

The Politics of “Trusted Partners”

Shared democratic values provide a foundation for Canada-EU cooperation, but they do not automatically produce aligned economic security practices. Rather, trust must be deliberately constructed through institutional design, from intelligence sharing to regulatory integration. As the European Council on Foreign Relations argues, the EU’s geoeconomic strategy increasingly depends on institutionalized cooperation with like‑minded partners to avoid being outmaneuvered by authoritarian states (Gehrke and Medunic 2024). Canada faces the same imperative, particularly given its more fragmented economic security landscape (Donovan et al. 2025). Failing to build this architecture carries significant strategic cost, and without it, deeper integration risks amplifying exposure rather than strengthening resilience. Economic security is therefore not a byproduct of meaningful cooperation but its precondition.

Building a Canada-EU Economic Security Architecture

Translating the idea of “trusted partners” into practice requires a set of mutually reinforcing institutional levers. One central pillar would be the creation of a dedicated Canada-EU Economic Security Council, modelled on the U.S.-EU Trade and Technology Council. Such a body would provide a standing forum for responding jointly to espionage incidents, including coordinating threat assessments and aligning regulatory approaches. 

A second lever involves harmonizing research security standards. As universities and research institutes become increasingly interconnected through Horizon Europe and bilateral partnerships, establishing shared due‑diligence requirements and common disclosure rules for foreign funding would help ensure that collaborative research does not inadvertently create openings for technology leakage or covert influence.

Foreign investment screening represents another area where targeted coordination is necessary, building upon the existing but siloed frameworks of Canada’s Investment Canada Act and the EU’s Foreign Direct Investment Screening Regulation. Aligning risk indicators and creating a mechanism for reciprocal notification of high‑risk investment reviews would reduce the ability of hostile actors to exploit regulatory asymmetries to access sensitive technologies or supply chains. Foreign investment screening represents another critical area where alignment is necessary. 

Cybersecurity cooperation must also be strengthened. Developing a joint cyber counter‑espionage strategy focused on real‑time intelligence sharing and coordinated attribution would help both jurisdictions respond more effectively to the “silent siege” of cyber‑enabled IP theft (Hogeveen 2024). Given that cyber intrusions are the dominant vector for economic espionage in both Canada and Europe, this domain is particularly ripe for structured collaboration.

Finally, economic security should be embedded directly into the legal and institutional backbone of the partnership. CETA’s review mechanisms offer a natural venue for integrating considerations across supply chain, IP, and investment risks and protections. Doing so would ensure that economic security is integrated as a core component of the Canada-EU economic relationship.

Together, these levers constitute the architecture required to operationalize trust. They move the partnership beyond shared values toward shared protections, enabling Canada and the EU to safeguard the innovation ecosystem they are increasingly building together.

Looking Ahead: A Moment for Coherence

Canada and the European Union are entering a phase of deeper strategic cooperation at the very moment when the foundations of advanced economies are being tested by unprecedented levels of foreign interference. Their shared prosperity increasingly depends on sectors producing tangibles and intangibles that have become prime targets for state‑directed espionage and strategic coercion. Meeting this moment requires a deliberate economic security architecture capable of protecting the full value lifecycle, from early‑stage research to industrial deployment. The question now facing Canada and Europe is whether they will build this architecture with the decisiveness and coherence that the current strategic environment demands.

References

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