Why not both?

While that's all very well, it's reasonably tiny next to Europe, and, crucially, it doesn't exist, and may never exist (no-one seems that excited about it except brexiteers, and even they seem to have more or less forgotten about it), whereas the EU does (and Canada already has a trade treaty with it).

Improving the existing trade treaty, and getting more defence trade going (Canada and Europe already do some, of course) seems far more plausible than setting up a whole new EU-type thing that no-one much appears to want.