Strengthening Canada's Defence Sector Act

Bill C-40, Strengthening Canada's Defence Sector Act · Second reading · now at committee in the House Where it stands

What Bill C-40 would do

The bill would create the Canadian Corporation for Defence Investment to handle production, buying, and investment for the Canadian Armed Forces, the Department of National Defence, and partner governments. It would also expand federal buying and stockpiling powers to cover national security supplies and services. The responsible minister would gain authority to make financial investments in defence and security sectors, and new procurement rules would be set. The bill would also require a future review of these changes.

Official text (opens in a new tab)

20 statements

Kevin Lamoureux, Parliamentary Secretary to the Leader of the Government in the House of Commons

Liberal
“I want the Conservatives to support using a government-owned company to buy military gear. It would make buying equipment faster, help our armed forces, and support Canadian jobs.”
Official Hansard

Mr. Speaker, I am disappointed that the Conservatives do not recognize that a Crown corporation is the best direction to go in when it comes to military procurement. This is for many different reasons. Suffice it to say that one of those reasons was part of the last election platform. We had indicated that it would be independent in nature. We want to be able to speed up the process to better serve our Canadian military and build a stronger, healthier economy through supporting our military industrial communities throughout the country. Why does the Conservative Party not support something that has been well established in many other areas in terms of accountability, transparency and so much more?

David McGuinty, Minister of National Defence

Liberal
“Four soldiers recently died and many were hurt in a fire during training. We must support their families and the workers helping them. I want the House to pass this bill. It sets up a new public agency to buy military equipment faster. Our current buying system is too slow and complicated. Our troops need the right tools and gear without delay to stay safe and defend Canada.”
Official Hansard

Mr. Speaker, because this is the first time I have had an opportunity to address the House with respect to the incidents that occurred this past weekend, I want to say a few things about the tragedy that occurred in Wainwright. On Saturday afternoon, at CFB Wainwright, a violent, fast-moving fire broke out while soldiers were training on the range. Thirty-nine members of the Canadian Armed Forces were injured, including 19 critically, and four lost their lives: Private Aidan Goulding of the 3rd Battalion, Princess Patricia’s Canadian Light Infantry, from North Vancouver, British Columbia; Private Shaun Farrell of the 3rd Battalion, Princess Patricia’s Canadian Light Infantry, from Prince Albert, Saskatchewan; Private Hayden Lykkemark of the 3rd Battalion, Princess Patricia’s Canadian Light Infantry, from Langley, British Columbia; and Sergeant Morgan Wong of the Loyal Edmonton Regiment, from Edmonton, Alberta. Canada will remember them. This is one of the most difficult moments the Canadian Armed Forces has faced at home in peacetime. Yesterday, I met with Canadian Armed Forces members and first responders and received an update from CAF leadership on the ongoing response. Our priority remains the well-being of the families of the fallen and those who remain hospitalized. As of this moment, 27 members of the Canadian Armed Forces are still in hospital receiving treatment. I want to take a moment to thank all of the health care workers in our hospitals, our surgeons, our nurses and our critical care experts for the support they are providing to these incredibly brave members of the Canadian Armed Forces. In particular, I would like to single out those whom I met yesterday at the hospital in Wainwright, the men and the women who performed heroically throughout the crisis. It was indeed a crisis. In the face of profound loss, they have shown extraordinary strength, compassion and care for one another. We will continue to stand with them and their families and ensure that they have the support they need. Let me now turn to the legislation before us and explain why our government is taking action to strengthen Canada’s defence sector. I do rise today in support of Bill C-40, the strengthening Canada’s defence sector act. This is a defining moment for Canada’s security and sovereignty. Threats are evolving rapidly. Technology is changing the nature of conflict, so we and our allies must adapt to a new reality. Canada must be ready. We need to strengthen our military capabilities, modernize our institutions and ensure that our investments produce concrete results. That is exactly what the bill seeks to do. At the heart of every decision we make in national defence are the women and men who serve the country. I have had the privilege of meeting them on bases and wings across Canada, aboard our ships and alongside our allies overseas. Wherever I go, I am reminded of the extraordinary professionalism, determination and sense of duty that define our Canadian Armed Forces. We ask a great deal of these Canadians, as we have all been witness to this past weekend. We ask them to defend our sovereignty in the Arctic, to stand alongside our NATO allies in Europe, to respond when Canadians face wildfires, floods and natural disasters, and when necessary, to put themselves in harm’s way. They answer that call without hesitation. Behind every member in uniform is a family that serves alongside them, families that endure long separations, repeated moves and sacrifices of their own. When we ask that much of our people, we have a responsibility to give them the tools they need to succeed, because readiness is not an abstract concept; it is whether a sailor can depend on the ship beneath their feet, whether an aviator has the capabilities needed to complete the mission, whether a soldier has the equipment and protection necessary to return home safely. We owe these Canadians more than our gratitude. We owe them those results, and delivering those results begins with ensuring that our defence procurement system works for the people who actually depend on it. Canada is making generational investments in national defence. This is irrefutable. We reached NATO’s 2% defence spending target in fiscal year 2025-26, five years ahead of our previous scheduled commitment. Budget 2025 committed approximately $81.8 billion in additional defence funding over five years. We are rebuilding, rearming and reinvesting in our national defence. As I have said before and will repeat again here, investing more is only part of the job. We must also change how we deliver, because money committed is not capability delivered. A contract signed does not put equipment in the hands of a service member. An announcement cannot defend our airspace, patrol our oceans or protect our sovereignty. Only real military capability can do that. For too long, Canada’s defence procurement system has been too fragmented, too complex and too slow, with too many steps, too many hand-offs and too much time between identifying what our armed forces need and getting that capability into their hands. That is not a reflection of the talented military personnel, public servants and procurement professionals who work within the system, but a reflection of a system that must simply evolve. The world is not going to wait for us to do just that, pursue that evolution. That brings us to the legislation before the House. The Defence Investment Agency was established in October 2025 to transform how Canada acquires and delivers defence capabilities. Bill C-40 would take that transformation even further. It would establish the agency as a Crown corporation within the national defence portfolio, giving it a permanent structure, greater commercial flexibility and the specialized expertise needed to manage complex defence investments. This is not simply about creating another institution, as some would have us believe, but about fundamentally improving how we deliver for our armed forces, bringing procurement, production and investment together, connecting military requirements with the industrial capacity needed to meet them and ensuring that decisions can be made with the speed and discipline that national security demands. Acquiring equipment is only one part of the challenge. We must also be able to maintain it, repair it, replenish it and sustain it throughout its operational life. Bill C-40 would provide broader procurement and investment tools, including mechanisms to help strengthen production capacity in strategically important areas. It would also amend the Defence Production Act to better reflect Canada’s evolving national security requirements, including economic security. It would support a more coordinated approach to major defence acquisitions. The Canadian Armed Forces, National Defence and the Canadian Coast Guard would continue to determine what capabilities they need. The Defence Investment Agency would focus on getting those capabilities delivered. The proposed agency would remain subject to appropriate government and parliamentary oversight, with clear governance and accountability arrangements. Canadians expect their government to move with urgency. They also expect responsible spending and value for money. We can do both, we must do both, and in Bill C-40 we will do both. Canada has never been a country that turned away from difficult challenges. Generations of Canadians have stepped forward to build, serve and defend this country. They built the institutions that protect us. They served in conflicts far from home. They understood that sovereignty, security and freedom could never be taken for granted. Today, that responsibility belongs to us. We have inherited it. As a result, we are making the investments. We are strengthening our armed forces. We are rebuilding our defence industrial capacity. We launched Canada’s first ever defence industrial strategy a short 10 months ago. Now we must ensure that our institutions can deliver at the pace this moment demands because it is accelerating. The measure of our commitment to national defence is not simply what we promise, but what we build, deliver and sustain, and whether the women and men who serve Canada can count on us when it matters most. They are ready to serve. We must be ready to deliver. Bill C-40 takes the process of procurement to its next logical step, building on our experience to be able to provide the equipment, the materiel that is required by the women and men on the front lines of the Canadian Armed Forces, because ultimately we are here for them as they acquit themselves courageously of their responsibilities as members of the Canadian Armed Forces.

David McGuinty, Minister of National Defence

Liberal
“I support creating a Crown corporation to buy defence equipment. It will be more flexible, make faster decisions, and hire business experts. It will also be able to invest directly and give out loans, which the old agency could not do.”
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Official Hansard

Mr. Speaker, my colleague and I are in complete agreement with respect to the troops and our combined support and, I think, Parliament’s support for the folks who are battling right now in our health care system and struggling for health. We wish them, of course, speedy recoveries. I want to begin perhaps by just going back to the first part of his question, which was about the distinction between the Crown corporation and the special operating agency. One of the things that happened when we actually began the reform of a procurement regime in defence, for the first time in decades in this country, is that there were lessons to learn. We have learned from experience. We have learned in terms of the sophistication of the commercial marketplace. We have learned how to deal more overtly with the suppliers of goods and services. That is why we believe the Crown corporation will have greater flexibility to draw on commercial expertise, execute innovative investment tools and streamline decision-making processes. For example, it will allow, in this case with the Crown, the opportunity for the Crown to invest by buying equity or even providing loans. That is something that the agency previously could not provide. We think this is a step forward.

David McGuinty, Minister of National Defence

Liberal
“This new defence corporation will answer to Parliament through a new associate minister. It will have a board of directors, strong money rules, and audits by the Auditor General. This will make buying defence equipment faster while keeping the government accountable.”
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Official Hansard

Mr. Speaker, on the contrary, I would say to my colleague that the proposed Crown corporation will be accountable to Parliament through a new associate minister of national defence for procurement. This is exactly the case in several other allied countries in Europe, for example, in Great Britain. The government will establish a board of directors to oversee the agency’s day-to-day management and supervision. In addition, the Crown corporation will be subject to ministerial requirements regarding reporting to Parliament and financial controls, as well as audits and reviews by the Office of the Auditor General of Canada. We have established a model, or an architecture, that will streamline procurement. At the same time, we are ensuring that there is the kind of accountability to which the member is referring.

Kevin Lamoureux, Parliamentary Secretary to the Leader of the Government in the House of Commons

Liberal
“I support this bill. It continues our promise to invest in the military, give service members pay raises, and support thousands of Canadian defence jobs.”
Official Hansard

Mr. Speaker, I appreciate many of the words, especially the tributes by our members making reference to the disaster that took place in Wainwright. I wonder if the minister can just provide his thoughts. From the last federal election, with our new Prime Minister and 70-plus new members of Parliament, one of the highest priorities was to deal with the Canadian Forces. It is one of the reasons we saw the substantial increase, meeting the 2% GDP. It is one of the reasons we saw raises going to our military personnel and so many investments. This piece of legislation is just a continuation of commitments to our Canadian Forces and the Canadian economy as a whole, that military industrial component in Canada that provides thousands of jobs.

David McGuinty, Minister of National Defence

Liberal
“We promised to spend over $81 billion over the next five years to rebuild the military. This money is already helping us recruit and keep more members, with applications up by 61% this year.”
Official Hansard

Mr. Speaker, my colleague is a former serving member of the forces, and I thank him very much for his service. What the member is really indicating is that we made a decision some 14 months ago to transform the Canadian Armed Forces in terms of investments, recruitment, retention and pay packages. Overall, as I mentioned, we made a 2% commitment to spending, $81 billion-plus over the next five years, and we have seen results. We have seen, for example, a 61% increase in completed applications to join the Canadian Armed Forces this year as compared with last year. We have seen recruitment numbers continue at other levels. We have seen retention also continue to augment and ameliorate. What we are really doing here is making the requisite investments to recruit, retain, arm and rebuild, and this is exactly what the Canadian Armed Forces have been waiting for, for some time.

David McGuinty, Minister of National Defence

Liberal
“This new defence corporation will answer directly to Parliament. Committees can question its leaders at any time. It will also help us make defence deals much faster, like cutting the submarine buying process from five years down to 20 months.”
Official Hansard

Mr. Speaker, what the member is referring to is overall accountability and, for that matter, also compellability. The CEO of this Crown corporation could be brought before committee at any time. The board could be convened at any time. There would be opportunities to put tough, difficult and probative questions to them. There is no off-ramp with respect to the creation of the Crown in terms of accountability to Parliament. On the contrary, what it would do is make this body more fleet-footed, more focused, more commercial and more able to negotiate better deals more quickly. We have seen that most recently with the example of the forthcoming acquisition of the fleet of new submarines. A process that normally would have taken five years was in fact, hopefully with a completed contract soon to come, completed within 20 months.

David McGuinty, Minister of National Defence

Liberal
“We did not move the Coast Guard into National Defence just to hit a spending target. We moved it to improve our country's security and intelligence work.”
Official Hansard

Mr. Speaker, I am aware of the continuing responsibilities the Coast Guard has in this regard. I would like to set the record straight, though. The Coast Guard was not transferred into the DND family as a result of our trying to hit a target. It was transferred into the DND family in order to provide security and intelligence functions in a more complete defence posture for the country.

Jenna Sudds, Parliamentary Secretary to the Minister of Government Transformation, Public Works and Procurement and to the Secretary of State (Defence Procurement)

Liberal
“I want the House to pass this bill. It sets up a new Crown corporation to buy military equipment faster and support Canadian technology companies.”
Official Hansard

Mr. Speaker, I will be sharing my time today with the member for Tobique—Mactaquac. I rise today to speak in support of Bill C-40, the strengthening Canada’s defence sector act. This legislation represents an important step in modernizing Canada’s defence procurement system, strengthening our domestic defence industry and ensuring that the investments we make in our national security deliver meaningful results for Canadians. At its core, the bill is about three things: equipping the Canadian Armed Forces with the capabilities they need, building a stronger and more resilient Canadian defence industrial base and ensuring that Canada is positioned to meet the security challenges of an increasingly uncertain world. These three objectives are deeply connected. We cannot have a strong national defence without the industrial capacity to support it. We cannot build that capacity without giving Canadian businesses the opportunity to innovate, compete and grow. We cannot achieve either objective if our procurement system is unable to move at the speed our national security demands. That is why Bill C-40 matters. As parliamentary secretary and the member of Parliament representing the communities of Kanata, Carp, Bells Corners and Stittsville, I see this legislation through two important lenses: our responsibility to defend Canadians, and our opportunity to build on the extraordinary talent, innovation and entrepreneurial spirit that exist within communities across the country. My community of Kanata is home to a remarkable technology ecosystem. Our businesses work at the forefront of advanced software, cybersecurity, communications, aerospace and other technologies that are increasingly essential to modern defence. These companies understand innovation. They understand the importance of investing in research and development. They understand that in a rapidly changing technological environment, the ability to move quickly can make the difference between leading and falling behind. We need a defence procurement system that understands that reality as well. I would like to address three key areas: how this bill supports the objectives of Canada’s defence industrial strategy, how we can create greater opportunities for Canadian small and medium-sized businesses, and how this legislation helps modernize the way Canada acquires the capabilities necessary to defend our sovereignty. On the first, supporting the objectives of Canada’s defence industrial strategy, our government recognizes that defence procurement must serve a purpose beyond merely the acquisition of equipment. Of course, our Canadian Armed Forces must have the equipment, technology and infrastructure they need to carry out their work. That is our first responsibility. However, the way we make those investments also matters. Defence spending represents an opportunity to strengthen Canadian industrial capacity, support highly skilled workers, encourage innovation and develop the sovereign capabilities we need to protect our country over the long term. Canada’s defence industrial strategy provides a framework to achieve these objectives. It recognizes that our national security and our economic prosperity are closely linked. This bill supports this ambition by proposing to establish the Defence Investment Agency as a Crown corporation, with a clear mandate, dedicated leadership and greater operational and commercial flexibility. This is a meaningful change. By bringing key defence procurement, production and investment activities together within a dedicated organization, the agency will be better positioned to reduce unnecessary hand-offs, make decisions more efficiently and provide greater predictability to Canadian industry. The proposed model also maintains government oversight and preserves the responsibility of National Defence and the Canadian Armed Forces to establish their operational requirements. We are working to improve how decisions are delivered, without losing sight of who those decisions are meant to serve. Our defence industrial strategy recognizes that Canada must be deliberate about what we build domestically, where we partner with trusted allies, and when we purchase capabilities from international suppliers. This approach allows us to strengthen Canadian expertise where it is strategically important, while recognizing that collaboration with our allies remains essential to our collective security. Our geography, our Arctic responsibilities, and our commitments to NATO and other international partners require strong domestic capabilities combined with reliable international partnerships. The Defence Investment Agency can help connect those priorities. It can help ensure that major defence investments are considered not only in terms of what we need to acquire today, but also in terms of the industrial capacity, supply chains and technical expertise that we will need tomorrow. That is how defence procurement becomes a longer-term investment in Canada’s security and sovereignty. Secondly, we must ensure that Canadian small and medium-sized enterprises have a meaningful place in this strategy. When we talk about Canada’s defence industry, it is natural to think about major shipbuilding projects, large equipment manufacturers and significant military platforms. Those are important, but a strong defence industrial base also depends on the smaller businesses developing specialized technologies, designing advanced components, building secure software and solving complex engineering problems. Those companies are often responsible for the innovations that give our defence capabilities a competitive advantage. There are also important employers in communities all across our country. In my riding of Kanata, we have a strong and growing defence innovation ecosystem. The Ottawa area has built an international reputation for technology and innovation. We have companies with deep expertise in software, secure communications, cybersecurity, sensors and advanced digital systems. I look to the work of Kanata-based company Adaptive Marine Solutions, which is designing and engineering the next generation of vessels for the Canadian Coast Guard. These vessels will give the Canadian Coast Guard the tools it needs to conduct marine research, mapping, search and rescue, and maritime security and enforcement operations. I also look to Kongsberg Geospatial. Its real-time geospatial software supports applications such as situational awareness and unmanned systems. These examples demonstrate the kind of specialized Canadian expertise that can contribute to modern defence capabilities, but they also demonstrate why it is so important that our procurement system be accessible to innovative Canadian businesses. A smaller business or smaller company may have a promising technology that may address a genuine operational need. It may have talented engineers, a strong research team and a solution that could benefit the Canadian Armed Forces, but developing a technology and operationalizing it are two very different challenges. We must make sure as we move forward that our procurement system does not unintentionally prevent Canadian innovation from reaching the people who need it. Bill C-40 would create an opportunity to improve the relationship between government and industry. With greater commercial flexibility, the Defence Investment Agency would be better positioned to engage with suppliers, assess potential solutions and move from validated requirements to procurement decisions more efficiently. I am honoured to have the opportunity to speak to this bill today, and I look forward to the questions that will come.

Jenna Sudds, Parliamentary Secretary to the Minister of Government Transformation, Public Works and Procurement and to the Secretary of State (Defence Procurement)

Liberal
“We are making progress on buying military equipment. We are negotiating to buy up to 12 submarines, which could support 100,000 jobs. We also partnered with General Dynamics to support thousands of jobs, and we invested $11 billion in icebreakers using over 1,500 Canadian suppliers.”
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Official Hansard

Mr. Speaker, we know that procurement is ongoing, and I will not speak to the status of that in this moment, but I will point to some recent successes. We are negotiating for up to 12 submarines currently, which would potentially be supporting up to 100,000 Canadian jobs. We have a strategic partner with General Dynamics that is supporting thousands of jobs in London and across the country. We have seen an $11-billion investment in the Davie icebreaker, which is involving more than 1,500 Canadian suppliers. This is evidence of the progress that we are making as we move forward.

Jenna Sudds, Parliamentary Secretary to the Minister of Government Transformation, Public Works and Procurement and to the Secretary of State (Defence Procurement)

Liberal
“This new agency will make better business deals and manage contracts more easily. It will put military buying and investing under one roof.”
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Official Hansard

Mr. Speaker, I think the questions are as follows: Why create a Crown corporation? Why was the decision made to do that now? The answer is that the goal is actually the opposite. I think the agency would have greater flexibility to negotiate and manage contracts using business practices better suited to the industry. It will also bring procurement and strategic investments under a single mandate.

Kevin Lamoureux, Parliamentary Secretary to the Leader of the Government in the House of Commons

Liberal
“Crown corporations have a long history of success. They work independently from the government, which makes them open and accountable. I want my colleague to speak about how this bill will make things more efficient, open, and accountable.”
Official Hansard

Mr. Speaker, I am a little confused about the motivation of the Conservative Party, along with the Bloc, and why they would oppose corporations. In fact, Crown corporations have a huge history of success, whether it is municipal, provincial or federal. It is a way to ensure more transparency and more accountability, and to have something be at arm’s length of government. These are all positive things we have witnessed for generations, at both the provincial and the national level, yet we have the Conservatives and the Bloc now saying that they do not support it. I am wondering if my colleague could provide her thoughts not only on how it would make it more efficient, but on the fact that there is a high level of accountability and transparency with Crown corporations.

Jenna Sudds, Parliamentary Secretary to the Minister of Government Transformation, Public Works and Procurement and to the Secretary of State (Defence Procurement)

Liberal
“Creating a new defence agency as a Crown corporation will help it move faster. This will let the government buy new technology as quickly as private businesses do, so our military gets what it needs.”
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Official Hansard

Mr. Speaker, as I shared with the last question, the decision to move forward with a Crown corporation for the new Defence Investment Agency would enable the agency to move more quickly and give it the ability to meet the pace of industry. As someone who represents a riding with many companies in both defence and dual-use technologies, a comment I hear often is that it is a challenge for the government to keep pace. Here is the government in action, doing just that. The ability to move more quickly, at the speed of commercial contracting, to ensure that the Canadian Armed Forces has the cutting-edge solutions that it truly needs and is looking to acquire is really an opportunity. I am proud of the work of our government in moving forward with this legislation.

Sherry Romanado, Parliamentary Secretary to the Minister of National Defence

Liberal
“Today is the anniversary of the death of Warrant Officer Patrice Vincent, and my thoughts are with his family. The Coast Guard now helps our military train and share security information with allies. We are also investing heavily in military bases across Canada. Buying military equipment has been hard for past governments, so we need a new way to get our troops what they need.”
Official Hansard

Mr. Speaker, before I get to my question, I want to highlight that today is the difficult anniversary of the death of Warrant Officer Patrice Vincent, who was killed back in 2014. Our thoughts are with his family today. The member opposite talked about a couple of things. He asked about the Canadian Coast Guard and the capabilities it brings to the Department of National Defence. One of those capabilities is the ability to actually share security information with our allies, which was not the case when it was under Fisheries and Oceans. It also brings training opportunities to the Canadian Armed Forces. The member also mentioned a question with respect to New Brunswick. I have visited CFB Gagetown, and anyone who had a chance to go visit this summer would have seen the incredible investments happening on bases and wings across Canada. The member mentioned that successive governments had difficulty in terms of getting defence procurement right. Would he not agree that perhaps we need to look at a different way of doing what we do to get those capabilities to our men and women in uniform?

Steeve Lavoie, Beauport—Limoilou

Liberal
“I support this bill. It gives businesses loans and financial help so they can afford to invest in defence projects. This lowers their risk, helps build military equipment in Canada, and makes our country safer.”
Official Hansard

Mr. Speaker, I will be sharing my time with the member for Riding Mountain. I am pleased to rise today on behalf of my constituents in Beauport—Limoilou to speak to Bill C-40, the strengthening Canada’s defence sector act. Last week, I was back in my riding with my colleagues from Québec Centre and Louis-Hébert. We held a round table with businesses from across the greater Quebec City region. The word that came up most often was “predictability”. Businesses want greater predictability so that they can make informed decisions. I will come back to this theme often in my speech, particularly as it relates to the needs of businesses. Bill C‑40 is built on three fundamental pillars: production, procurement and investments in relation to national defence and national security. One of its aims is to modernize our policy instruments by creating a Canadian corporation for defence investment and expanding the scope of the Defence Production Act to more explicitly address matters relating to national security, services, certain types of infrastructure, investment and economic security. Beyond the legislative provisions themselves, today I would like to talk about something that I believe is essential: the difference between being involved and being committed. There is an important distinction between being involved and being committed. There are many ways to work on a project. One can choose either to be involved or to be committed. Some members may be wondering what the difference is. Let me share a little family anecdote that may bring a smile to their faces. I grew up on a dairy farm. When I was young, my father used a simple analogy to explain the distinction to me. He would tell me that, at breakfast, the chicken is involved, but the pig is committed. I think members can appreciate the distinction I am drawing here. That analogy has stayed with me throughout my life. At its core, being involved means contributing to a project. Being committed means accepting the responsibility to devote the necessary resources, take risks and assume greater accountability to ensure its success. Depending on the circumstances, a government may choose either to be involved or to be committed. With this bill, we are talking about a concrete commitment in three areas: production, procurement and investment. It is a commitment to our defence, our national security and our economic security. How is that commitment being put into action? This bill sets out the financial tools that would allow the government to intervene in various ways to support the development of our defence industry, particularly by providing loans to support industrial projects and strategic investments; making advance payments to make it easier for certain projects to get off the ground; offering financial guarantees, such as loan guarantees, loan insurance or credit insurance; and buying, holding and selling shares and other financial instruments that make it possible to participate in funding certain businesses and projects. Why is that important? It is important because these tools will enable strategic projects to get off the ground, whereas they might otherwise have struggled to secure the funding they need. To fully understand the significance of this change, we need to put ourselves in the shoes of businesses and consider the economic reality they face. All too often, the government issues calls for tenders to procure equipment or specialized services, only to find that there are too few companies willing or able to bid. Why is that? It is because bidding for these contracts often requires substantial front-end investment by businesses, while the predictability of future orders is not always satisfactory. Allow me to provide a concrete example. A Canadian company is hoping to secure a major defence contract. To be competitive, it may have to purchase new equipment, modernize its production line, expand its facilities and recruit and train specialized workers. All of that requires significant investment, often amounting to millions of dollars. We are talking about our SMEs here in Canada. Before making this kind of investment, a company must conduct a thorough financial analysis and ask itself some fundamental questions. Will this investment be profitable? Will future revenues enable them to repay the amounts invested, when it comes to loans? Above all, will the contracts be predictable enough to justify the expense? A company cannot invest millions of dollars based solely on hope. As we know, hope is not a strategy. This reasoning applies to financial institutions as well. Naturally, a bank analyzes the profitability of the project when it lends money to a business. The bank is primarily interested in the business’ ability to repay the loan and its long-term viability. Why? The reason is simple. It wants to ensure that the business will be able to repay its loans. Banks will not lend money to a business that takes on too much debt or manages its debt poorly. That is how financing works in our economy. That is precisely where the tools in this bill can make a difference. It will create predictability to stimulate investment, particularly by allowing loans, guarantees and other forms of financial support that will help reduce some risks associated with investments in the defence sector. This can facilitate access to financing, encourage businesses to modernize their facilities and give them more confidence to develop their production capacity. The goal is not to replace private investment with public investment. Rather, it is about creating the conditions that enable more private capital to be mobilized to serve strategic priorities. In other words, it is about using the government’s financial tools to incentivize investments that might otherwise be delayed or never realized. Just last summer, I met with the owners of a business I used to know that was unable to bid on contracts because it did not have access to bank loans. Today, it can do so thanks to the BDC, a financial tool of the government. This company has adapted and is able to access the market. In Canada, we have tremendous strengths. We have knowledge, with one of the most educated populations in the world. We have innovation through dynamic entrepreneurs, researchers and technology companies. We have the natural resources and strategic materials needed for industrial production. We also have recognized expertise in sectors such as aerospace, shipbuilding, advanced technologies and specialized manufacturing. I am thinking of the Davie shipyard in the greater Quebec City area. Most importantly, we have women and men who have the talent, skills and ambition to grow these industries. However, as we know, having these assets is not enough. We still need to be able to mobilize them, connect them and give them the means to contribute to our national objectives. At the end of the day, our national security also depends on our industrial capacity. It depends on our ability to produce, innovate, procure and maintain strategic skills and technologies here in Canada. I will close with that analogy my father used when I was young: There is a difference between being involved and being committed. Being involved means participating. Being committed means being prepared to invest the necessary resources and take the necessary steps to achieve one’s objectives. That is the lens through which I see the measures proposed in Bill C‑40, which would give Canada new tools to support our defence industry, stimulate investment, and strengthen our national security and our economy. Canada’s ability to defend itself does not depend solely on the equipment we buy. It also depends on our ability to design, manufacture, maintain and upgrade that equipment right here in Canada. Achieving that requires more than just wanting a stronger defence industry; it means giving that industry what it needs to realize its ambitions and grow.

Steeve Lavoie, Beauport—Limoilou

Liberal
“The public trusts our government to give businesses the resources they need. In the past, companies did not have the help to succeed. For example, defence businesses used to be excluded from government bank loans. Now we have changed the rules so defence businesses can qualify for that money.”
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Official Hansard

Mr. Speaker, yes, it is clear that the public trusts our government. They believe we are giving our businesses the resources they need to achieve their goals. For 20 years, I worked with businesses. They did not have the resources to succeed. The government could issue calls for tenders, open up new sectors and create new opportunities all it wanted, but the resources were not there to support them. Take the Business Development Bank of Canada, or BDC, for example, which has adapted its financing criteria for businesses. Six years ago, businesses could not do business with the BDC because certain sectors, such as defence, were excluded. Today, however, that is possible. We are taking a flexible approach to allow sectors within our industry to qualify again and adapt their operations to support this. We are taking real action, and, yes, people can trust our government.

Steeve Lavoie, Beauport—Limoilou

Liberal
“Other countries like the United Kingdom and Sweden already use this model. The Bloc Québécois members need to agree on what they think is wrong with this defence bill. I want them to work with us and suggest changes to improve it, because it will help many Quebec businesses.”
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Official Hansard

Mr. Speaker, my colleague’s question contains several parts, but I will do my best to address them. Several countries, including the United Kingdom and Sweden, have adopted this model, incidentally. It is interesting to hear him speak about the ombud today while raising concerns about how contracts may be awarded.. Two of his colleagues spoke about this this morning. His colleague from Vallée-du-Haut-Saint-Laurent expressed concern about interference and political intervention. I took notes this morning. However, his colleague from Pierre-Boucher—Les Patriotes—Verchères said that the process was too politicized. I am not sure how the Bloc Québécois is interpreting the bill, but its members should agree on whether it is too politicized or not politicized enough. As for the salary issue, does it really have a place in the discussion on improving the bill at this stage? Bloc Québécois members can propose amendments if they wish. The member spoke about the ombud. He is free to bring forward amendments. What I would like to see is the Bloc Québécois helping to improve the bill, because many Quebec businesses stand to benefit from it.

Steeve Lavoie, Beauport—Limoilou

Liberal
“This bill keeps strong oversight. Crown corporations must still report their spending, face audits, and get minister approval. The bill also helps local businesses. For example, the Davie shipyard in my riding supports 5,000 workers and over 600 suppliers.”
Official Hansard

Mr. Speaker, I would simply like to make a clarification. My colleague said that there was no accountability at all. Crown corporations are still subject to financial disclosure, audits and the submission of documents to Parliament, and they require ministerial approval. That aspect is important. Yes, this will be important for our businesses. In my region, we have the Davie shipyard. My colleague was talking about economic security. The Davie shipyard in my riding, with six icebreakers, represents $11 billion and 5,000 workers alone on the south shore of Quebec City, which will have an impact on more than 600 suppliers. We often hear about the major contractors. Many suppliers will be able to benefit from this.

Mark Gerretsen, Kingston and the Islands

Liberal
“The opposition complains about us counting the Coast Guard as part of our defence spending. All NATO countries need to use the same formula to compare their spending. The United States already counts its Coast Guard, so Canada should do the same.”
Official Hansard

Mr. Speaker, it must be tough for the opposition when all its members can do is criticize the way we calculate our investment in defence. I heard this member, like I heard the member for Selkirk—Interlake—Eastman earlier today, criticize how we are investing by counting the Canadian Coast Guard in the calculation. This member seems to take issue with it. However, I am sure he would agree with it me that when NATO-allied countries are comparing themselves to each other, it is important that we all use the same formula and all account for the same things. This member might be surprised to learn that the United States has been counting its coast guard in its calculation long before Canada ever did. Would he not agree that rather than the rhetoric we hear from him, it is probably more important that the formula among all NATO countries is the same and therefore counting the Coast Guard is a good thing?

Mark Gerretsen, Kingston and the Islands

Liberal
“Other members are saying I misled the House and calling me a liar. I am not misleading anyone, so I want them to withdraw those comments.”
Official Hansard

Mr. Speaker, the member did say that I “misled” the House, and and now he is saying it again. You just said, Mr. Speaker, that we cannot do indirectly what we cannot do directly, and that is to call somebody a liar, and he is basically saying— An hon. member: Oh, oh! Hon. Mark Gerretsen: Now the member for Selkirk—Interlake—Eastman is also saying that I am a liar. Would it be possible for the Speaker to ask them to withdraw that comment, given the fact that I am not misleading? I am telling them the way the calculation is made.

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