Canada is preparing defenses against hostile laser deployment by nations it sees challenging its arctic sovereignty, most likely Russia.

Allocations dating back to 2008 call for an outlay of at least $18 million. It's not clear how much has been spent so far and if there have been cost overruns.

To counter a growing laser threat, Canada's Department of National Defense and a European firm are collaborating to develop a system that would enable ships to quickly detect and defeat such "area-denial weapons," DefenseNews reported.

Canadian defense priorities in recent months have focused on threats seen to be coming from sovereignty contests in the arctic as its ice melts and more marine navigation becomes possible.

Shore-based laser-guided missiles of increasing range are being deployed by potentially hostile nations to limit the ability of warships to operate in coastal waters, DefenseNews.com said but did not name a country.

Past pronouncements by conservative Prime Minister Stephen Harper's government cited maritime confrontations with Russian navy ships. Canada has accused Russia of sending vessels in waters close to its littoral region in the north. Officials are also wary of north European challenges, including countries normally considered friendly due to NATO and other Western alliance partnerships.

Canadian navy work on potential laser threats from the arctic follows negotiations over several years with Cassidian, the defense and security division of European defense manufacturer EADS.

Cassidian announced earlier it will develop innovative solutions to protect ships of the Canadian navy against new types of "asymmetric threats."

It said the project is called LOCATES or Laser Optical Countermeasures and Surveillance Against Threat Environment Scenarios. Cassidian won the contract from the Defense Research Development Canada, Valcartier, Quebec.

The contract covers development of new technologies "to detect and counter laser-based threats in harbors and littoral waters," Cassidian said.

The program is the answer to increasing threats by laser designators and laser-guided weapons which are widely distributed and easy to operate, it said. Navy ships are particularly vulnerable in a littoral environment where attacks are difficult to be detected without sufficient pre-warning time.

A prototype of LOCATES will be developed and field tested, the company announced earlier.

"The Canadian Navy's mission is continuously evolving, and accordingly requires cutting-edge technologies to detect and protect Naval platforms from asymmetric threats," Cassidian says.

The company has developed laser warning devices for ships, aircraft and land vehicles which are in operation with several NATO armed forces. Its MILDS missile launch detection system, with more than 6,000 units sold, is the standard missile warner for helicopters and widebody aircraft.

Canadian military officers cited by DefenseNews.com say naval ships are particularly vulnerable in a littoral environment where attacks can be difficult to detect without sufficient warning time,

Sea testing of a prototype LOCATES system is expected to follow on from land-based tests and will likely take place aboard a Canadian navy frigate in January.

LOCATES is said to conduct three functions. It provides warning for a ship's crew if a weapon system using a laser is targeting the vessel. It also detects optical lenses on shore, so the LOCATES sensor is able to pick up any type of scope or lens that is being trained on the ship. LOCATES uses its own laser countermeasures on the threat, disrupting the missile guidance or optical sensors targeting the ship.