EU and Canada conclude a digital trade agreement and launch an Alliance for the Future
At their summit in Montréal, the two sides closed negotiations on rules for cross-border data flows and online trade, signed an EIB investment framework and set out a long list of joint projects.
The European Union and Canada have concluded negotiations on a Digital Trade Agreement at the 21st EU-Canada summit in Montréal. The agreement complements the Comprehensive Economic and Trade Agreement (CETA), which has been provisionally applied since 2017, and sets common rules for cross-border data flows, e-contracts, e-signatures and e-invoices, according to the European Commission.
Canadian Prime Minister Mark Carney and the EU's leaders also launched what they call an Alliance for the Future, and the European Investment Bank signed a framework agreement with the Government of Canada that allows it to consider financing projects in Canada, with critical raw materials as an early focus.
What the digital trade agreement covers
The Commission says the agreement sets clear and predictable rules for companies trading digitally between the two markets. Its core is a framework for trusted cross-border data flows that is meant to prevent unjustified restrictions on moving data, which the Commission describes as vital for companies in every sector and in particular for small and medium-sized businesses.
The text also promotes e-contracts, e-signatures and e-invoices to cut administrative costs, and includes online consumer protection rules. One example given by the Commission is a requirement that commercial messages clearly identify the sender and give recipients a way to stop further communication.
Talks only started at the CETA Joint Committee on 5 March 2026, so the deal was negotiated in under eight months. It is not yet in force. On the EU side it now goes through legal scrubbing and translation into all EU languages before the Commission can submit it to the Council and the European Parliament.
The numbers behind it
According to the Commission, citing Eurostat, trade in digitally delivered services between the EU and Canada reached €19.8 billion in 2025: €11.2 billion of EU exports to Canada and €8.6 billion of imports from Canada. Total bilateral trade in goods and services grew by 80% between 2016 and 2025, to more than €130 billion.
Canada's trade minister Maninder Sidhu said in the Canadian government's release that it is Canada's first agreement dedicated entirely to digital trade, and that Canadian businesses exported nearly C$15 billion in digitally deliverable services to the EU in 2024.
The wider package from Montréal
The digital trade deal was one of several outcomes listed in the leaders' joint statement. The two sides also concluded negotiations on a second-generation competition agreement to strengthen cooperation between competition authorities, and Canada joined the European High-Performance Computing Joint Undertaking (EuroHPC), which the Canadian government says will give Canadian researchers and businesses access to the JUPITER supercomputer.
The EIB framework agreement follows a letter of intent signed in Toronto in March. It allows the bank to consider loans, guarantees, equity and quasi-equity investments and technical assistance in Canada, with critical raw materials projects as the early focus. Each operation will still go through the EIB's standard appraisal and approval. The bank also plans to open a presence in Ottawa. "Europe and Canada have what each other needs," said EIB Vice-President Nicola Beer.
Several items are only at the starting line. The joint statement commits both sides to work on connecting their instant payment systems, to increase cross-border access to financial services (the Canadian release mentions a joint working group covering banks, insurers and fintech), and to launch work on new subsea cable links between Canada, Europe and Asia. It also aims at mutual recognition in digital identity and trust services, conformity assessment for AI systems, and cybersecurity, and pays particular attention to access to AI and computing infrastructure for start-ups and SMEs.
The associate membership question
Politically, the summit was dominated by how close the relationship should become. The joint statement commits the two sides to define, by the 2027 EU-Canada summit, "an ever-closer association of Canada to the EU, short of full membership itself". CBC News reports that Carney said Canada is working to become the EU's first associate member and that he wants to conclude negotiations in June, while sources told CBC the associate member wording was removed from the draft statement because some member states, notably Germany, objected.
What it means for European founders and investors
For European software, SaaS and data-driven startups, Canada is a natural second market after the EU, and the agreement is designed to reduce legal uncertainty around moving data and signing contracts digitally. Founders should not change anything yet: the text still needs formal approval on both sides, and the specific legal effects depend on the final wording. But it is a clear signal of where transatlantic rules are heading.
The investment links are getting stronger too. This week Germany's Schwarz Group led the Series E of Canadian AI company Cohere, and the joint statement's plans on compute access, AI conformity assessment and instant payments touch the same themes as the ECB's work on the digital euro network. For deeptech and climate investors, the EIB framework could open a new route for European capital into Canadian mining and processing projects, which matter for battery and defence supply chains in Europe.
For more on the macro backdrop in the euro area, see our report on third-quarter GDP.
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