Why Does Vancouver Want a Global Defence Bank?

B.C. Premier David Eby joined a group of business leaders this week calling for Vancouver to be home to a new global defence bank.

The Defence, Security and Resilience Bank will be a financial institution that helps fund military projects in member countries through loans.

It’s unclear which countries are backing the initiative. Currently, a group called the Defence, Security and Resilience Bank Development Group has formed to promote the idea and says it will dissolve as soon as the bank is in place.

Kevin Reed, the group’s president — who is Canadian — claims that once it’s established the bank will be collectively operated by about 40 countries, including some NATO members and Indo-Pacific allies.

The bank is projected to be operating fully by the end of this year.

But first, it needs a headquarters.

Bridgitte Anderson, CEO and president of the Greater Vancouver Board of Trade, said at a press conference this week that Vancouver would be “the strategic choice” for the bank’s home city.

“Our city offers a secure, world-class environment that naturally attracts global talent,” she said in a press release. “Vancouver is ready to accelerate the bank’s operations and deliver immediate results for our collective security.”

The B.C. government expects the bank to create about 3,500 finance, research and international business jobs in its host city and make its headquarters’ city a hub for global security talks and investment.

Ottawa, Toronto and Montreal are also vying to host the bank.

Economist Marc Lee is skeptical that Vancouver — or Canada — will get the bank.

“It's as likely as a Hail Mary pass at the end of a football game,” Lee said. “It looks to me like a government that's just completely devoid of any vision of what to do around the economy and it's just grasping at straws.”

Meanwhile, the peace advocacy group World Beyond War is calling for Canada to reject the bank, which it says promises to boost the “war economy” and fund conflicts around the world.

“We're going to have major financial institutions incentivized by the member states’ governments to direct more of their capital into the machines of war,” said World Beyond War’s Tyler Delmore. “That is super concerning.”

The bid comes as Canada and many of its NATO allies boost spending on defence.

What is the Defence, Security and Resilience Bank?

The bank is expected to be fully formed by the end of 2026. Its aim is to become a global bank — similar to the World Bank or the European Investment Bank — capable of raising US$135 billion to fund military projects in member countries.

The governments of Germany and Britain have previously said they will not back the bank.

Germany’s finance ministry announced last year that it rejects further financing for the military sector, adding the European Union already has a lending scheme for defence procurement, called Security Action for Europe.

But Canada is contending to host the new financial institution. Reed said at an Ottawa press conference last month there are about 40 countries in the running.

If Canada’s bid were to win, the prime minister would decide which city would get to host the bank headquarters.

Why should Vancouver host a global defence bank?

A group of local business leaders, called the Pacific Security Bank Bid Committee, has pitched Vancouver as the top choice.

The committee includes the executives at the Vancouver Airport Authority, the Business Council of British Columbia and MST Development Corp., a partnership of the Musqueam, Squamish and Tsleil-Waututh First Nations.

In its bid document, the committee pitches Vancouver as a globally connected city with enough local finance and cybersecurity talent to support the bank.

“Vancouver occupies a position no other Canadian city can replicate,” the bid document reads. “It is geographically the only major centre where business can be conducted with Asia and Europe in a single day. This is not simply a convenience. It is a long-term operational advantage.”

The document highlights Vancouver’s proximity to Indo-Pacific allies including Korea, Singapore and Japan.

It also notes Vancouver is home to a diverse technology workforce and to the offices of companies including Mastercard, cybersecurity firm Sophos and homegrown quantum computing startup D-Wave.

Eby told reporters that putting the bank in Vancouver would help Canada bolster its relationships with countries in both Asia and Europe.

“We are the sole candidate city that can offer same business day access to the EU, the Arctic and the Asia-Pacific governments that are going to be participating in this bank,” he said. “The centre of this new Canadian relationship with the world is obviously in Vancouver.”

What would this mean for BC?

Lee, an economist with the Canadian Centre for Policy Alternatives, said adding 3,500 well-paying jobs to the local economy is good for business — but would be the “tiniest dent” for employment.

“I'm not opposed to good jobs locating here, but I think a lot of this is really overblown,” Lee said.

He said the bank would be aimed at funding defence projects in countries facing financing challenges.

“I don't know that there's actually that much spillover benefit to local industries, apart from just the jobs that materialize here.”

Lee added it’s more likely the prime minister would choose to put the bank in Toronto or Montreal, which already serve as major hubs for banking and investment.

“B.C. is the province that created Greenpeace,” Lee said. “We used to have people go out on boats, challenging military and defence spending. Now we're throwing that out the window and we want to become this hub for military spending.”

World Beyond War’s Delmore said he is concerned hosting the bank would mean Canadians will become more reliant on the success of the military industry.

“We're going to go to a very potentially dark place where we are welcoming in big multinational financial institutions, like Blackrock, and encouraging our own national banks to get involved more deeply in the weapons industry,” he said.

RBC is a founding partner of the bank. Scotiabank, CIBC and National Bank have all announced plans to back the Defence, Security and Resilience Bank should it come to Canada.

Meanwhile, Toronto’s bid to host the bank notes that proximity to large pension investment funds, like OMERS Private Equity and the Canada Pension Plan, could attract investment.

Delmore is calling for Canada to reject the bank altogether.

“It's going to be that much more difficult to divest funds from problematic companies,” he said. “It's such a dark, foreboding future that our welfare here is going to depend on conflict elsewhere.”