Arctic powers strike quiet deal with major strategic implications

A new strategic partnership between Arctic states Canada and Sweden may seem modest at first, but it could carry significant geopolitical consequences. The agreement gives Canada a chance to lessen its dependence on the United States, offers Sweden an avenue to expand its influence and markets, and strengthens NATO’s northern flank against political volatility in Washington.

Signed during the Swedish king’s visit to Canada in mid-November, the deal spans multiple areas of cooperation, including defence production, Arctic security, critical minerals, advanced manufacturing, and emerging technologies, according to an article by Project Syndicate.

Although geographically distant, the two countries share numerous similarities: both are democracies with constitutional monarchies, have export-driven economies, and have long histories of navigating life alongside a powerful neighbour. They also possess comparable natural resources, such as metals, boreal forests, and extensive freshwater reserves.

However, the article argues that the partnership is driven by more than mutual benefit. For Canada, it is a long-delayed effort to reduce its heavy reliance on the United States. For Sweden, it represents a strategic push to strengthen its new place within NATO. In this sense, the agreement becomes both Canadian “insurance” and a Swedish “bid for influence and market share.”

The advantages for Ottawa are particularly clear. Canada remains unusually dependent on a single neighbour: the US dominates its exports, technology supply, and defence procurement. This reliance once seemed secure. But Trump-era tariffs on steel and aluminium, the forced renegotiation of the US-Mexico-Canada Agreement, and past remarks about annexing Canada transformed that reliance into a major vulnerability.

Sweden, in contrast, is integrating itself more deeply into the transatlantic system. Having joined NATO after Russia’s invasion of Ukraine, it brings strong defence capabilities and a robust “total-defence” culture that incorporates civilian preparedness into national security. Sweden’s industry specializes in equipment built for harsh northern conditions — very similar to those faced in Canada.

Despite the partnership’s strong alignment, the two governments diverge on how much to rely on the United States. Canada is seeking to reduce reliance on a single supplier for military and industrial systems, anticipating a future where US politics are unpredictable. Sweden, on the other hand, wants to strengthen its position within the US-led NATO structure, believing that neutrality and geography no longer guarantee safety. Over time, these contrasting strategies could create tension.

Defence takes centre stage

Military-industrial cooperation lies at the heart of the agreement. Canada’s procurement has traditionally favoured US aircraft such as the F-35A and P-8A, which simplify interoperability but also increase strategic dependence. Sweden’s Gripen fighter presents one of the few non-US alternatives, designed specifically for harsh northern conditions and dispersed operations.

Shifting part of Canada’s fleet to a mix of Gripens and F-35s would be a difficult and politically sensitive move. Retired Canadian officers argue that reducing F-35 purchases would weaken the military, while US analysts cited in the article claim a mixed fleet would be “costlier, less interoperable” with NORAD, and less effective in Arctic missions.

Still, the article’s author suggests the trade-off could be worthwhile. Gripens produced in Canada with Swedish support could provide Canadian industry and defence strategy with greater autonomy. Sweden would simultaneously increase its weight within NATO. The key question is how the US would react: would Washington see this as useful burden-sharing or as a loss of industrial dominance?

Bypassing Washington en route to Arctic grip

With US politics growing less predictable, the partnership offers Sweden a North American foothold without having to rely on Washington. It strengthens cooperation with a technologically advanced economy while deepening Sweden’s involvement in Arctic affairs.

According to the article, “NATO, too, is getting something it urgently needs: a northern flank that is more capable, more distributed, and less exposed to swings in US politics.” It concludes that “at a time of growing fragility within the West, Canada and Sweden are offering a new model to restore resilience.”

By Nazrin Sadigova