European Commission President Ursula von der Leyen said the European Union is opening the door for Canada to become its first "associate member", a status that is not set out in the bloc's treaties.
Von der Leyen's announcement is a shift in EU policy. The bloc has resisted flexible categories and EU members were lukewarm in reacting to Germany's proposal in May of associate membership for Ukraine as a stepping stone to full accession.
"Partnerships are a strategic choice for Europe. But they also respond to the fracture in the international rules-based system," von der Leyen said in her annual State of the European Union address to the European Parliament in Strasbourg.
"We see the world with the same eyes: from AI to climate change, from the Arctic to geopolitics. And we have stood together: on Ukraine, on defence, on raw materials and on supply chains. But above all... Europe and Canada believe in democracy."
Canada's Prime Minister Mark Carney said earlier this week Canada was seeking a "unique alliance" with the EU but not membership. Von der Leyen invited Carney to join her in Strasbourg, and he will make his own address on Thursday.
Carney's European trip follows a breakdown in Canada-US relations after trade talks collapsed last month, sparking a series of tit-for-tat tariff measures.
"I said we must urgently reimagine our partnerships. So, I would like to work with you on opening the door for Canada to be the first associate member of the EU," von der Leyen said.
She added that the EU and Canada will work together across sectors from manufacturing to AI, minerals and energy.
"We will work on intelligent manufacturing. We will create a tech alliance. We will integrate defence industrial bases. We will make the Arctic a flagship joint project," she said.
Von der Leyen added, "This is a partnership not against anyone else", in a possible effort to avoid antagonising U.S. President Donald Trump.