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)

32 statements

Jeff Kibble, Cowichan—Malahat—Langford

Conservative
“The government talks about choosing preferred providers, but not about signed contracts or delivered equipment. How will the member make sure the government reports the reasons for all no-bid defence contracts to the House?”
Official Hansard

Madam Speaker, the member opposite mentioned numerous announcements that are only about preferred providers, not signed contracts or delivered equipment. The member stated, “remain accountable for the results.” Will the member ensure that the reasons for all sole-source contracts signed under Bill C-40 are reported to the House, and how will he ensure that is done?

James Bezan, Selkirk—Interlake—Eastman

Conservative
“I oppose this bill. The government changed its plan for the defence agency to create a corporation with too much power. It lets the minister completely control the agency and give those powers to the CEO.”
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Official Hansard

Madam Speaker, as we know, we were here just months ago talking about Bill C-31, division 16, which was going to create the Defence Investment Agency under an omnibus budget bill. The secretary of state got up and made a big speech. He was actually hoping to be, fingers crossed, the minister of defence procurement, a full minister. Of course, in Bill C-40, that has been downgraded to associate minister of national defence for procurement. What has changed? We originally set up the Defence Investment Agency as part of PSPC, and we brought it around to where it is today. We went through Bill C-31. We are now on Bill C-40. There are rumours that Doug Guzman, the Prime Minister’s BFF, his Goldman Sachs investment banker buddy, has threatened to quit. Is that the reason why we now have to set up an authoritarian corporation with powers that we have not seen before in any Crown corporation: that a minister can direct the agency, that it must do what the minister wants and that he can also pass those powers down to and share them with the CEO? Is that the very reason we are doing this? I hear that Chairman Mao is actually blushing on this one.

James Bezan, Selkirk—Interlake—Eastman

Conservative
“The government has neglected our military for years, leaving our troops with broken vehicles and missing equipment. This bill gives ministers too much power to hand out contracts to their friends without proper oversight. We need time in committee to study it.”
Official Hansard

Madam Speaker, this being a solemn day, as we think about the tragedy and disaster that happened at CFB Wainwright, I just want to extend my heartfelt and sincere condolences to families and Canadian Armed Forces members, especially those who were on site. They are in our thoughts and prayers during this very difficult time. I would like to acknowledge Private Aidan Goulding, Private Shaun Farrell and Private Hayden Lykkemark, all part of the 3rd Battalion Princess Patricia’s Canadian Light Infantry, as well as Sergeant Morgan Wong, a reservist with the Loyal Edmonton Regiment. After their passing during this tragedy, we want to rally behind their families and their comrades at this time. We also want the 39 injured members of the Canadian Armed Force to know that we will be there. We will work across party lines. All of us are going to stand with them 100% to ensure that they get the supports they need to heal and recover, and ensure that if they are unable to return to work, supports are there through Veterans Affairs Canada. I have been to CFB Wainwright on a number of occasions, to be out there, to witness training and to participate in some of the training exercises, including with the PPCLI. I see why the young men and women who put on the uniform are the best of the best that Canada has to offer. They are so excited to be serving our great nation. We realize that they have to do things like live-fire training so they are always ready to defend us. Again, we send out all our support, our prayers and our love to the entire Canadian Armed Forces military family. Conservatives always support our armed forces, and we have a record of getting equipment bought and delivered in a very timely and quick manner. After the Liberal decade of darkness under Chrétien and Paul Martin, the Canadian Armed Forces was in dire need of reinvestment. We witnessed that its members were sent into Afghanistan wearing things like green uniforms. They did not have proper boots. They did not have kevlar body armour and tactical vests. We quickly went out there and bought for them the stuff they needed to work in theatre. During our time in government, we bought 650 brand new LAVs so they had light armoured vehicles to do the work they did, and 500 tactical armoured patrol vehicles. We bought 100 Leopard tanks. The Liberals, during the Chrétien era, were decommissioning all of our Leopard tanks, and what we needed in Afghanistan were Leopard tanks, so we bought 100 Leopard 2 main battle tanks. We bought 82 armoured heavy support vehicle systems and 50 Nyala armoured vehicles so they could move around more carefully, and we bought IED vehicles to clear away all of the mines and IEDs that were causing harm. Many of the fatalities and casualties experienced in Afghanistan were caused by them. We bought 16 of those vehicles and bought 37 M777 howitzers. We made sure that our army had what it needed when it went into theatre. In terms of our air force, we were at a point when we took over as government that we were begging the Americans to help us move our troops into Afghanistan. We were hitching rides with the Russians, of all people, having to get them to come with their heavy-lift Antonovs to move us. We invested in buying five brand new C-17 tactical Globemasters. We bought 21 Chinook helicopters to move our troops around in Afghanistan safely and get them away from IEDs. We bought 17 new Hercules CC-130J models, and we bought a number of UAVs. During that time, we also upgraded our CF-18s and extended the life of our Auroras, which are now past their end of life. This is going back to over 15 years ago when we made those investments. We also made the decision to buy the F-35 as our future fighter jet. On the navy side, we made sure that we stood up the national shipbuilding program. We ordered the very first six AOPSs, the Harry DeWolf-class Arctic offshore patrol ships. We ordered two joint supply ships, the protecteur class. We not only ordered but delivered on time the Asterix auxiliary offshore replenishment vessel to support our navy until the JSS’s were delivered. We also did a mid-life extension to our Halifax-class frigates. We stood up and bought what we needed. We know that sometimes we have to sole-source, so we used national security exemptions and the urgent operational requirements required by the CAF to sole-source where we had to. Some things we have to buy off the shelf to get them into play quickly, ensuring they are interoperable with our allies. We proved that we were able to get stuff done because of political leadership. We made sure that this started right at the top, with the the prime minister at that time, Stephen Harper, directing the PCO and cabinet to set up a secretariat of ministers and deputy ministers to provide leadership back down to the bureaucracies to get things done and buy the kit and equipment we needed to support the Canadian Armed Forces, especially during a time of war. Here we are, 11 years in with the Liberal government, and I can say that our fighter jets and most of the aircraft we have within the military right now are worn out. We know the army has been hollowed out and the navy is rusting out right before our eyes. To prove the point, all we have to do is look at the serviceability, readiness and operational demands of the vehicle fleets we have within the Canadian Armed Forces. This is right out of the performance reports from National Defence. In 2023-24, only 49% of land vehicles for the army were serviceable and deployable. That increased slightly to 51% in 2024-25, the last year for which we have this data. It is so bad that the guys deployed right now to Latvia are not able to train properly alongside our allies because a number of their vehicles are broken down. There is not enough in the budget to maintain and repair them and put them back into service. Often, a couple hundred of our guys who are deployed do not get certified for working as a brigade alongside our allies. In 2023, only 48.9% of our air fleet was available for operational deployments. That dropped down to 42.3% last year under the Liberals. In 2023-24, only 45% of the maritime fleet was deployable. That increased in 2024-25 to 59.6%, almost 60%. How did the Liberals make that gain? They were able to do that because they retired an entire class of patrol vessels, our Kingston-class coastal patrol vessels. They mothballed them. They are sitting in furlough now and being scrapped instead of being out there protecting our sovereignty and patrolling our maritime coastline. After 11 years, all we have gotten from the Liberals is talk and no action. The proof is in the numbers, and the sorry state of the Canadian Armed Forces today is due to 11 years of neglect by the Liberals. We are looking at a system where the Canadian Armed Forces know what they need but the Liberals are not going to give it to them. As a case in point, since the minister is talking about all the things they bought, one thing they are supposed to buy is new assault and sniper rifles, the C25s and C26s. However, we are waiting for them because the Liberals failed to sign a contract to get them delivered before all the orders were booked with the manufacturer. The Denmark and United Kingdom militaries are getting these assault rifles before we do. Our guys have to wait in the queue because we allowed other countries to jump ahead of us and buy up these new assault rifles. With respect to the SkyGuardian, the Liberals announced three years ago that we were going to have a new drone patrol aircraft or reconnaissance vessel that could fly all over Canada and up into the Arctic, but the first one has still not been delivered. Where is it? We are still looking for it. The government bought the Kingfishers, the CC-295s. This is a procurement that continues to lag behind, as it is not fit for operations. We know that the air force is struggling to use this jet to do fixed-wing search and rescue and contour flying in the Canadian Rockies. The plane has not been able to pass operational requirements, as set out by the Royal Canadian Air Force, and is still not certified, and not all the planes have been delivered at this point in time. I will note one of the greatest examples of the failure of the Liberal government. Since the war in Ukraine started, which we are four and a half years into now, we have seen how important artillery shells are in the war. Ukraine goes through between 5,000 and 6,000 shells a day. Russia has used over 30,000 shells against Ukrainians on Ukrainian territory. Putin’s war machine is getting shells from his allies: North Korea and Iran, which are not our friends. Meanwhile, we should be supplying Ukraine. We could produce, when this war started, about 3,000 shells a month. That would not last a day in Ukraine. We have been able to up it slowly, but there is no contract signed. It is up to 5,000 shells per month. The artillery shell factories and manufacturers in Canada have more than doubled their production, but the United States Army signed contracts and is getting them built there faster than we are building for ourselves. That is a failure of the government to get things done. The government likes to hang its hat on the new GlobalEye that it announced at CANSEC back in May. It is an asset that we need desperately in the Royal Canadian Air Force, especially with what is happening today, but sadly, the Defence Investment Agency and the Secretary of State for Defence Procurement failed to consult with the Royal Canadian Air Force. The media reported that the RCAF was as surprised as anyone else, since it had not even drafted the final version of the statement of requirement. The argument is used that the platforms out there did not have all the standards that we require. However, one, how do they know this when they did not talk to the air force about what it needs? Two, there were at least three competitors out there, two of them using the Bombardier Global 6500 as their basis, and for whatever reason, the government announced that it was partnering with Saab and that it was going to be a preferred supplier on this procurement, without talking to Boeing, without talking to Saab, without talking to Bombardier and without talking to L3Harris, which employs over 1,000 people in Montreal alone. If we want to talk about a symbiotic relationship, Bombardier-L3Harris is an interesting one. Boeing has the proven E-7, and instead we are going with an aircraft that has some operational shortfalls and cannot even do 360 radar, never mind having the proper connectivity. As such, there are major concerns with that procurement. If we are going to give unprecedented powers under Bill C-40 to the minister, would that not open it up so they could do more sole-sourcing based upon who they know and give Liberal insiders, friends and well-connected manufacturers the contracts, rather than talking to the user to ensure we are buying the kit and equipment we need to protect Canada in the best way possible? The replacement of the CF-18s has also been a disaster. The secretary of state is a former fighter pilot, and I respect his service to Canada, but he knows that the CF-18s are well past their due date, despite the life extension that we did as Conservatives. He was the chair of the defence committee back in the day when the government invented the capability gap nonsense and said that we had to increase the number of fighter jets we had. Of course, right away, the government announced it was going to go with a super Hornet, a brand new F-18, to make up the capability gap that we required. That, of course, would open the door to buying all F-18s. However, Boeing and Bombardier got into a mess, and the decision was made by Trudeau to do no more business with Boeing, so there were no more super Hornets. What did the government do? It went out and bought a bunch of used, vintage F-18s from Australia that were as old and worn out as our own fleet of F-18s. It cost us millions and millions of dollars to buy them and refurbish them, and we have nothing to show for it at the end of the day, other than using them as parts for the current fleet we have. The government continues with its F-35 review. That review has been sitting on the Prime Minister’s desk for over a year now. The Department of National Defence has reported back. It is well known what plane the Canadian Armed Forces wants, which is the F-35. Because of political games and grandstanding, the Prime Minister will not announce that we need the F-35, which, I must say, has been said before. Trudeau said that he would never buy the F-35. He put it out to competition, did a complete review and guess what. It was won fair and square and hands down as the best fighter jet, on all four major measurements, as what we need in Canada. We are already in the process of purchasing the first 16 jets and there will be another 14 after that. Our F-18s are old and worn out. We cannot wait for the Prime Minister to keep playing his political games and grandstanding with the United States on this when we need a fighter jet in service today so we can train up the next generation of pilots and air crew to support that fleet. It has been so bad here that we are already hearing rumours that members of the Canadian Armed Forces are being asked to turn in their rucksacks and sleeping bags. The Liberals bought a bunch of sleeping bags that do not even work at below -20°C. There are no sleeping bags. There is a shortage of tactical vests. Everybody has been asked to hand them back in. Guys are going through basic training saying that there are not enough uniforms. They are all getting worn out and we have not bought any new ones, so they have to turn their uniforms back in through basic training. It is so sad to hear that our guys who are deployed are begging, borrowing and stealing from our allies to get proper kits when they are serving in places like Latvia and on Operation Reassurance across Europe. There are things that we need to buy right away, but we are not hearing from the government. We need new tanks. Where are they? We need ground-based air defence systems after witnessing what is happening. There have been no requests for information of any of the companies out there. We have heard over and over again that we are short on military housing in this country. We are 6,700 residential housing units short in supplying the current demand, and that is not happening at any speed. To make up 6,700, even over 10 years, we would have to build over 600 a year, and we are not doing this. Three years ago, I think 32 homes were built for the armed forces. This is not of high importance to the Liberals. The Liberals have done some things. They bought the Global 6500 as an executive jet to fly ministers of the Crown around, so everybody flies around in comfort. The Prime Minister did not like the Polaris aircraft we had as the executive jet for international travel, so the Liberals had to go out and buy some new Airbus CC-330 Husky aircraft just so he could be in a luxurious aircraft. The Liberals are good at making announcements and reannouncements about preferred suppliers. They have done some of these things two times, three times and four times now, but as I just pointed out, they are bad at signing contracts. A case in point is the 155 artillery shells. The Liberals are great at creative accounting. That is how they got up over 2%. It was not actual investment in the Canadian Armed Forces. They gave pay raises, low-hanging fruit and well overdue, but they turned around and started clawing them back, and increasing rent hikes and changing the living differential for those who are posted off base. We are witnessing right now another cut coming to our armed forces. They are looking for 10% savings right now. We already went through this under Trudeau, where the Liberals cut $2.7 billion over three years. This year alone, the cut to the main estimates would amount to $2.9 billion in one year in the Prime Minister’s efforts to find savings. There is a lot more I could say on this, but I will just say that we are going to take time at committee to study this. This is the third iteration of it, but Bill C-40 would increase the opportunity for political interference and decrease accountability, transparency and protection to our taxpayers. We also know that the Liberal government has a history of corruption. By giving it this type of unvetted access to $1 billion at a time, we are worried this would turn into a major scandal.

James Bezan, Selkirk—Interlake—Eastman

Conservative
“The Liberals changed the math in 2017 to make defence spending look higher than it really is. They count things like the Coast Guard, which does not fight in wars. The public records show that real defence spending was only 1.05% last year.”
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Official Hansard

Madam Speaker, he took two minutes, so I hope I get two minutes to reply. First of all, let us talk about how the Liberals got to 2% through creative accounting. They changed the formula in 2017 when they started adding other departmental spending into national defence. Today we have the Canadian Coast Guard, which has been entirely absorbed by the Canadian Armed Forces budget, not operations. It is not a security organization. It does not have any lethality. They told us at committee, when we had the Coast Guard before them, that if there is any conflict breakout, the Coast Guard’s job is to leave the scene of the assault. It would not be in the fight. It does fisheries monitoring, navigation and ice-breaking operations to ensure the St. Lawrence Seaway stays open. This is what it actually does and it does a great job. We love the Coast Guard. If we want to compare apples to apples, as we did when we were government, compared to the numbers these guys like to throw around at us, where we just look at actual national defence spending based upon the public accounts that are filed right here in the House of Commons, in 2023-24, under the last year of Justin Trudeau, who the Secretary of State loves so much, their actual spending in that year, not using creative accounting, but actually comparing apples to apples, was 1.05%. Hon. Kevin Lamoureux: That is not true. James Bezan: Madam Speaker, that is true. All the member for Winnipeg North has to do is look at the numbers. This is more important than anything. At the end of the day, this comes down to political leadership, making sure we get the job done. As Conservatives, we will always fight for those who fight for us to keep Canada, the true north, strong and free.

Fraser Tolmie, Moose Jaw—Lake Centre—Lanigan

Conservative
“I want my colleague to talk about how past military purchases were necessary, while this bill gives too much power to one person and hides what the government is doing.”
Official Hansard

Madam Speaker, I would like my colleague to maybe expand a bit on the difference between when the Conservatives purchased the Chinook helicopters, the C-17s and the Hercules when we were in Afghanistan on deployment, and Bill C-40, which has powers we are very concerned about just being handed over to one person. I wonder if he could expand on the differences between, as I said, the necessity to buy the equipment and expedite it, and then the lack of transparency we are seeing in this bill.

James Bezan, Selkirk—Interlake—Eastman

Conservative
“Our previous government bought the aircraft the air force needed and supported our Snowbirds air show team. The current government shut down the Snowbirds and is buying small planes that do not make a strong impression at international air shows.”
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Official Hansard

Madam Speaker, I know that my colleague, as a veteran of the Royal Canadian Air Force himself, got to witness us buying the C-17s, the Chinooks and the new Hercules. We continued to buy the aircraft the air force needed, and we supported the life extension done to our Snowbirds. Of course, what these Liberals did was actually shut down our Snowbirds. Instead of buying a replacement aircraft, a jet that would really thrill the audiences and really sell Canada internationally, they are buying a cute little PC-21. It sounds a lot like somebody who is out there crop dusting. I enjoy watching crop dusting, but after a couple of hours, it is time to move on. When we are going to international air shows and we are going to be flying the PC-21 up against things like the Blue Angels, we should actually make a bigger impression out there. We could have actually extended the life of the Snowbirds once again.

James Bezan, Selkirk—Interlake—Eastman

Conservative
“The government is making it too hard for small businesses to get military contracts. When the government gives big projects to giant corporations, those big companies can steal ideas and technology from smaller creators. We need to support smaller innovators who are building new defense tools.”
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Official Hansard

Madam Speaker, my colleague serves with us on the national defence committee. One of the shortfalls and criticisms that we are hearing about right now is that the Defence Investment Agency and the Liberal government, in particular, is making it very difficult for small and medium-sized enterprises. People are coming forward with some new technologies and new ideas, including in the world of cyber, quantum computing and drones, things that we need to do that they cannot get through the front door. A case in point is that when the Liberals announced the new drone program, they put it under the control of a major prime, Bombardier, rather than letting everybody have a chance to come forward as opposed to taking their technology to another company that could potentially be a competitor, that will then take away their IP and use it to their advantage instead of using it to the advantage of the creator. We need to make sure that we support the entrepreneurs, those who are out there leading on creating new equipment. As we have witnessed in the war in Ukraine, things are changing day to day. We have to be able to keep up with that, and the big primes are not always the ones that have all the answers.

James Bezan, Selkirk—Interlake—Eastman

Conservative
“The Liberals are inflating their defence spending numbers. They count spending on the Coast Guard, pensions, police, and border services as defence. A fair comparison shows they spend only 1.05% of our GDP on defence.”
Official Hansard

Madam Speaker, the member for Kingston and the Islands is much like the member for Winnipeg North. They think that if they say it loud enough, they must be right. The fact remains that the Harper government never did that. Conservatives made the investments in the Canadian Armed Forces. The Coast Guard was not considered part of that calculation, nor were pensions, which are now in there, nor some spending from Global Affairs Canada, the RCMP and the CBSA that are all thrown in there. The Liberals have thrown everything in there except the kitchen sink. No, wait, that is in there, too. If we do an apples-to-apples comparison of 2023-24, the Liberals are at 1.05%. That is really embarrassing, knowing the dangerous world that we live in today.

James Bezan, Selkirk—Interlake—Eastman

Conservative
“The Liberals have a history of scandals. This bill gives one minister too much control over a new Crown corporation. I worry this will lead to political interference and give public money to government insiders.”
Official Hansard

Mr. Speaker, I want to thank my colleague from the Bloc Québécois for his intervention. I really appreciate that he raised the spectre of the culture of the Liberals and that they have a long track record of scandal after scandal. We have had SNC-Lavalin, ArriveCAN and the WE Foundation. We could also go back to adscam. There is just so much. We would now be setting up, as my colleague pointed out, unprecedented powers of a single minister over a Crown corporation, which we have never seen before in Canadian history, a Crown corporation that must do as demanded by a minister. Earlier, the Secretary of State was saying that this is about ensuring political oversight. Does my colleague have the same concern that I do, that this is going to increase political interference and open up an opportunity for the government to use the DIA Crown corporation as a way to have another scandal and make sure that it is shovelling money out the door to Liberal insiders and well-connected friends?

Marc Dalton, Pitt Meadows—Maple Ridge

Conservative
“The government has cut military budgets and hurt training for soldiers. They are weakening the military and adding more bureaucracy. I want to know if this bill will actually help, or if it is just a way to hide contracts.”
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Official Hansard

Mr. Speaker, last week I spoke with a soldier in British Columbia. He told me about the problems he saw with money for training. There have been budget cuts. We hear the Liberals say that they are doing an amazing job, but what are they actually doing? They are hollowing out the military and creating yet another layer of bureaucracy. Does the member think that this new plan will deliver any real benefits, or is it simply a way to hide contracts?

Eric Duncan, Stormont—Dundas—Glengarry

Conservative
“I want to know why the government is removing rules around giving contracts without competition. This bill creates about 13 ways to skip the normal bidding process. That cuts down on transparency and stops Parliament from checking how money is spent.”
Official Hansard

Mr. Speaker, my question for the hon. member focuses on accountability and transparency. What is being proposed here, the government says, is a better effort to procure defence items, which as a whole, at a far glance or an upper look at things, would be agreeable. However, the transparency is with respect to the amount of sole-sourcing. I believe, if I am correct, off the top of my head, there are about 13 exemptions where the minister or that agency would have the opportunity to sole-source without very much transparency. This leads us to the many different examples we have seen over the course of time of removing the transparency, accountability and connection to Parliament to be able to scrutinize things as thoroughly as possible. My question for the member is, why are the Liberals removing the transparency and guardrails around the sole-sourcing of contracts at a time when we need more?

Cheryl Gallant, Algonquin—Renfrew—Pembroke

Conservative
“The government is using borrowed tax dollars to invest in defence companies it buys equipment from. How do we know taxpayers are getting the best value? This is a conflict of interest because the people buying the equipment have money in the companies selling it.”
Official Hansard

Mr. Speaker, with the federal government investing, using borrowed taxpayer dollars, in the very companies that will be tendering bids and offering their models of equipment for purchase by the Canadian government, how do we know that we will get the best value for our dollar? How is it not a conflict of interest that the very people making the decisions on what equipment the government is going to buy have money invested in these defence companies?

Cheryl Gallant, Algonquin—Renfrew—Pembroke

Conservative
“I oppose this bill. It will not fix how we buy military equipment, and it will only make Liberal insiders richer. Letting a new Crown corporation buy shares in defence companies will lead to conflicts of interest and waste public money. We need to buy our troops the best gear, not make investment deals.”
Official Hansard

Mr. Speaker, I will be sharing my time with the MP for Calgary Midnapore. I rise on behalf of the women and men of Garrison Petawawa and the wider Ottawa Valley community to express my deepest condolences to the families of the four soldiers who lost their lives and the 39 people recovering. When tragedy strikes, the loss is felt deeply by all those in the Canadian Armed Forces, especially by their families and their loved ones. Private Shaun Farrell, Private Hayden Lykkemark, Private Aidan Goulding and Sergeant Morgan Wong fell serving their country. Their loss is a stark reminder of the dangers we ask the Canadian Armed Forces to undertake every single day. We owe our seats in this chamber to the sacrifices made by those serving today and the veterans who went before them. We can never repay the debt we owe to Shaun, Hayden, Aidan and Morgan. What we can do is live up to the example they set of being of service to our country. As members of His Majesty’s loyal opposition, we are called to serve by holding the government accountable. It is the duty of the government to appear in this House and give that account. Anything less is a disservice to all Canadians. What we owe Canadians, and particularly the members of the Canadian Armed Forces, is the certainty that we take the nation’s defence seriously. The Liberal government has tabled Bill C-40, an act respecting production, procurement and investment in relation to national defence and national security. The Liberals’ chosen short title makes the purpose of this bill clear. It is called the “strengthening Canada’s defence sector act”. It is not the “strengthening the Canadian Armed Forces act”. It is not the “speeding up defence procurement act”. It is another Liberal industrial strategy dressed up in a military uniform. There is a reason prime minister Brookfield appointed a bank president to lead the Defence Investment Agency instead of an expert in defence and security. This is all about making Liberal insiders richer. Between pressure from our NATO allies, the aggression of Russia and insults to our sovereignty by the U.S. president, the Liberal Party now supports increased military spending. The Liberals saw the commitment to meet our NATO targets as an opportunity to cash in, and that is what this is really about. The Liberal talking points claim this bill is meant to help speed up defence procurement. Of course, this is what the Liberals said a year ago when the Prime Minister created a new bureaucracy within public works and called it the Defence Investment Agency. Six months later, the Liberals said it needed to be a stand-alone agency. A year later, the Liberals are claiming this needs to be a Crown corporation. Changing the agency to a Crown corporation would not fix defence procurement because it would not address the root of the problem. As long as the Liberal Party of Canada continues to exist, the Canadian Armed Forces will struggle. From Pierre Trudeau scrapping our aircraft carriers to Jean Chrétien scrapping the EH-101 helicopter and Justin Trudeau whipping out his pen to cancel the F-35 procurement, one party has repeatedly campaigned against defence procurement. Not only did Chrétien and Trudeau actively campaign against military purchases, but they both won majority governments from those campaigns. Those campaigns sent a loud message to the defence sector and the public service that a delayed procurement is better than a negative headline. Even today, while the Liberals claim to care about meeting spending targets, the Liberal Prime Minister has placed the F-35 procurement in jeopardy. The F-35 review is not making Canada secure. The review is not because the defence department has discovered a new advanced jet it did not know about before. The only reason for this fake review is that it is politically convenient for the Liberal Party of Canada. The Liberal government is willing to sacrifice national security to keep its elbows in an upright pose. These posers do not care about national security if it risks the poll numbers. I wish this was not the truth. I want the government to succeed in buying the kit that the soldiers, sailors and airmen need. In some ways, this bill could actually be seen as a way to get most of the Liberal Party out of the way of the defence procurement. By creating a Crown corporation and a single responsible minister, it may get the industry minister to stop meddling in defence purchases. Unfortunately, this bill’s multiple mandates would replicate the same whole-of-government incoherence with a single Crown corporation. Even worse, the new power this Crown corporation would have to make equity investments in defence companies would be putting the entire organization into repeated conflicts of interest. How could this defence Crown agency corporation invest in a company while running a competitive procurement process that includes the same company? The only answer is that the government would have to sole-source the projects. Who needs a competitive procurement process when they own a piece of the bidder? Obviously, sole-source contracts are rife for conflict and corruption, but Canadians may even forgive the Liberals’ lining their pockets if at the end of the day, the women and men of the Canadian Armed Forces were provided with the very best equipment in the world. Instead, the Liberal government procured winter sleeping bags that do not work in the cold. Once the government is a shareholder of a company that no longer has to compete for government contracts, is that company going to invest in research and development, or will it follow the lead of the government’s newest sole-source defence contractor, Maritime Launch Services, and cash in its stock options? This bill has less to do with our national security strategy and more to do with the Liberal defence industrial strategy. Rather than taking President Eisenhower’s warnings of a growing military-industrial complex to heart, the Liberals are taking it as a how-to guide. While there is more of a case for government intervention to maintain critical defence capabilities, this bill would go well beyond limited interventions. For example, there is a strong case for providing market security and long-term sustainability for armaments by expanding munitions stockpiles, yet this bill would allow the minister to stockpile anything the Liberal cabinet decides is in the party’s interest. Another example was recently provided by President Trump. On the same day the Liberals announced this bill that would allow them to buy equity in defence companies, the U.S. president announced the U.S. government was taking a 40% equity stake in a defence company redeveloping an old naval shipyard. The President argued that its equity stake would commit the U.S. government to keeping the facility operational forever. As President Trump said, he and the Prime Minister “agree on many things”, and that includes taking equity stakes in politically sensitive companies. I disagree with the Prime Minister and the President. I appreciate the argument that this type of investment commitment can ensure the long-term stability needed to keep a critical factory in operation, yet as Ukraine’s heroic defence against Putin’s aggression has shown, the pace of technology and technological change is only accelerating. What is critical today may be obsolete in 10 years, but the contracts and scarce dollars will keep flowing to outdated factories because the government owns a piece of them. Even if people support the government taking equity stakes in defence companies to secure currently critical assets, surely they would at least agree that there should be some constraints. Under this bill, there would be no limits. As the head of this defence Crown corporation, the Prime Minister’s close personal friend and highest-paid government employee could buy 1% of a drone start-up or buy 100% of Stelco. That is an extraordinary amount of power to grant the government. Not since World War II has the government nationalized a company without introducing specific legislation. Given how poorly the Liberals managed their national electric vehicle industrial strategy, if we grant the Liberals this much unaccountable power to implement their national defence strategy, all we can be certain of is that vast amounts of money will be spent while leaving Canadians with little to show for it. The Liberals can continue to reannounce new strategies to speed up defence procurement, but the real problem is staring them in the mirror. This Liberal bill is a confession of Liberal failure. It is an admission of Liberal guilt. We owe it to the women and men of the Canadian Armed Forces to get them the best equipment, not the best investment deal.

Cheryl Gallant, Algonquin—Renfrew—Pembroke

Conservative
“The member who just spoke is the only person here who brought up corruption and attacking people's character.”
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Official Hansard

Mr. Speaker, the only person in this room so far who has mentioned corruption and character assassination is that member.

Arnold Viersen, Peace River—Westlock

Conservative
“The Liberals claim they are spending more on defence than the Conservatives did, but they are just using tricky accounting. They counted the Coast Guard as part of the military to make their numbers look bigger. Our military is not doing any better than it was under Stephen Harper. I want the member to comment on this.”
Official Hansard

Mr. Speaker, I listened intently to the member’s speech, and I listened to the Liberals’ questions about this, and the Liberals keep touting the fact that they are spending more money than we did when we were in power. A couple of things are the case. First is the Liberals’ fancy accounting when it comes to what they are spending money on in the military. I would point out that they moved the Coast Guard from being a civilian organization to being a military organization. Second, the Canadian Armed Forces’ capabilities have not been improved. Nobody thinks the Canadian Army is in better shape today than it was under Stephen Harper, so I am just wondering if the hon. member has any comments about that.

Cheryl Gallant, Algonquin—Renfrew—Pembroke

Conservative
“The recent 2.9-billion-dollar cut to defence hurts our soldiers and their families. I oppose this bill because it uses borrowed taxpayer money to invest in defence companies so the government can profit off buying equipment.”
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Official Hansard

Mr. Speaker, the real strength of our army is in its people, and the $2.9-billion cut to defence this year alone is going to impact the well-being of our military, the individuals and their families. The real concern about the expenditures in this bill is that borrowed taxpayers’ money would be going to invest in defence companies so the government would have a piece of the action, and when a piece of equipment is built, procured or purchased, it would be the government that cashes in.

Cheryl Gallant, Algonquin—Renfrew—Pembroke

Conservative
“The military spending targets are only part of what we need to keep Canada safe. Other countries arm their coast guards, so NATO counts them as military equipment. Canada's Coast Guard is not armed, so its job should just be sharing ocean information with our military.”
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Official Hansard

Mr. Speaker, the member from the Bloc is absolutely right. The 5%, 1.5% of which can go into infrastructure or a soft cost for the military, is only a piece of it. The other money is supposed to actually go into national defence to make our country safer. What was mentioned earlier was the Coast Guard. The fact is that other countries’ coast guards, which are included in the NATO calculation of 3.5% for the equipment, are actually armed. Our Coast Guard is not armed. All it would be doing is what it should have been doing already, and that is sharing information with defence, based on what it sees on the oceans.

Stephanie Kusie, Calgary Midnapore

Conservative
“I oppose this defence bill. It turns the defence agency into an independent corporation, which removes government oversight and lets ministers avoid answering for their choices. It also lets the government hand out contracts without competition, which lets Liberals reward their friends and insiders.”
Official Hansard

Mr. Speaker, as it is a new session, it is always an honour to recognize that I am so pleased to stay in the House for the good people of Calgary Midnapore and speak on their behalf. I cannot commence this speech without paying recognition to the tragedy that took place at CFB Wainwright. As the mother of a teenage son, I cannot imagine the pain these families are feeling right now, and I want them to know that my thoughts, my prayers and my heart are with them. I also want them to know that Shaun, Aidan, Morgan and Hayden were not just the sons of Canada, they were also the sons of Alberta. It is very poignant that this horrific event would happen on the eve of a referendum to decide Alberta’s destiny within Canada. I am very happy to say that Albertans chose to be with Canada, because I believe that is a better destiny for us as Albertans. I also believe it shows that what happens in Alberta touches all of Canada. All those who serve know what it means to take accountability, so that is what I am going to be talking about today: the implementation of Bill C-40 and the need for responsibility and accountability. Bill C-40 would transform the Defence Investment Agency into a Crown corporation. This is good for many reasons. It would give the organization greater authority to negotiate, to manage and to fast-track projects, which we hope would result in quicker outcomes for both our armed men and women and for Canadians. However, as the saying goes, with great power comes great responsibility, and Bill C-40, I am afraid, would take away some of the responsibility and some of the accountability. It would do this by creating an arm’s-length organization, by creating winners and losers and an opportunity for Liberals to reward friends and insiders, and by eliminating fiscal and procurement oversight. The first way Bill C-40 would eliminate accountability is by creating yet another arm’s-length organization. There are countless times I have been told by a minister in committee that they cannot respond to that question or they cannot answer my query because it is an arm’s-length organization. They wash their hands of it, yet all of these organizations have an impact on Canadians’ lives and all of these organizations spend the Canadian taxpayer’s dollar. They should be completely accountable, both in the committee and in the House of Commons. We have seen some of the most heinous misuse of funds in the history of the 11-year Liberal government by arm’s-length organizations. For example, the Canada Infrastructure Bank has committed $18 billion since 2017, and in 10 years, despite this high expenditure, fewer than 10% of projects have been completed. Despite that, executives were given both bonuses and salaries to the tune of $8.6 million last year. We cannot forget the green slush fund, Sustainable Development Technology Canada. The damning 2024 Auditor General report found 90 instances where directors failed to recuse themselves for a contract total of $76 million. Out of 58 projects, 10 projects were determined to be ineligible under their own rules, totalling $59 million. Another $20 million in seed projects was approved without the required screening. It was so bad that the federal government had to disband the organization, and every single board of directors member was forced to resign. The second reason Bill C-40 leaves a wanting for accountability and responsibility is that it has pieces of legislation that would create winners and losers, which would allow Liberals to reward friends and insiders. It would expand the number of categories under which the minister could carry out a sole-source procurement. There would be 13 opportunities, in fact, with no options, no price comparisons and no comparative evaluations. It would also allow any number of future exceptions to be written into regulations, as many as they want. It would exclude the minister from the consequences of outsourcing and these can be many and can be highly impactful, from overspending and choosing projects and solutions that are out of scope, to solutions that are wrong for operational requirements. It would also allow the minister to exclude anyone without justification, without oversight and without explanation; procurement ghosting; picking winners and losers; and giving contracts to friends and insiders. We saw this no place better than in the Auditor General’s report in 2024 of McKinsey, with 10 departments being implicated and 97 professional service contracts for a total of $209 million. These rules would allow Liberals to give money to friends and insiders and they would allow the government to do what it loves to do best, and that is to play favourites. Bill C-40 would also allow the corporation to withdraw up to $1 billion out of the consolidated revenue fund, and not just once but as many times as it needed to, yet the oversight would be missing. The DIA would be under Treasury Board rules to a substantially less extent than prior to Bill C-40, Treasury Board being the body that provides the oversight for the expenditure of funds. This would mean less regulatory oversight for the spending of taxpayer dollars, something Conservatives never like to see occurring. The bill would remove the oversight of the Office of the Procurement Ombud, who audits the execution of government contracting to check for process. The procurement ombud said that he is concerned about the potential for less accountability when it comes to major defence contracts, and he has good cause for concern. In April 2024 testimony regarding the McKinsey contracting study, he stated: We are seeing consistent problems across the federal procurement landscape. If you go back even as far as a decade and further, you’ll see that many of these issues are repetitive in nature. It’s not simply one issue, but what I will say—and this is what I believe the theme for this report is—that perhaps the system has lost confidence in delivering results for the project authority. As a result, people use the system in ways that it shouldn’t be used. This is something that we are trying to avoid. In February 2024, in his testimony on ArriveCAN, the procurement ombud stated: ...the number one issue...is documentation. This is not unique to [just] these departments [that were included in this analysis and this study]. This is a struggle across the federal government. In his 2025-26 annual report, the procurement ombud stated, specific to defence procurement: Major defence procurements are high-value, high-risk, and central to Canada’s sovereignty and security [, something that is so important to Canadians at this time]. Persistent delays, fragmented accountability, and weak performance measurement carry real consequences, [as we saw this week] not only for public funds, but for operational readiness. While recent reforms demonstrate positive intent, their success will depend on clear accountability, disciplined implementation, and effective oversight throughout the [procurement processes and throughout the] lifecycle of defence contracts. In these three examples, we see the necessity for accountability. Bill C-40 would take away that accountability and that responsibility by maintaining arm’s-length organizations, putting in mechanisms to allow for winners and losers that would allow Liberals to reward their friends and insiders, and removing significant financial and procurement oversight. However, the solution is found where we begin. The procurement ombud stated, “If people aren’t accountable, it creates big gaps in the process.... You do not step away from the gap and pretend it’s not your responsibility.... When you see a gap, [you say] “I take accountability and responsibility [and I will] fill that gap.” There is no place that is more critical and more fundamental to our Canadian sovereignty and to our Canadian security than our defence procurement. The Liberals should take accountability and responsibility. Those four young men who passed away deserve that.

Stephanie Kusie, Calgary Midnapore

Conservative
“Albertans want to stay in Canada, but they want more independence from Ottawa. They do not trust the Liberal government, so they want to make their own choices.”
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Mr. Speaker, at the crux of the member’s question was the example of many independent Alberta organizations. I would like to point out that while Albertans did choose to stay in a federated Canada, which is the right option, I believe, they also responded in eight out of nine other questions that they want more independence from Ottawa in terms of defining their own destiny and feeling responsibility as a province because, frankly, they cannot count on Ottawa or the Liberal government to do it for them. What is really at the root of yesterday and the member’s question is that Albertans have trust within themselves. What they do not trust is the Liberal government and more Liberal governance.

Jeff Kibble, Cowichan—Malahat—Langford

Conservative
“This bill says the new defence agency must do whatever the minister tells it to do. Given past failures, why should Canadians not be worried about this kind of government control?”
Official Hansard

Mr. Speaker, clause 9 of Bill C-40 says, “The [Defence Investment Agency] must do as the Minister directs”. It does not say “may”, but “must”. I am wondering if my colleague can tell me why this should cause concern to Canadians if the GlobalEye failure under the Defence Investment Agency’s current mandate predicts a path forward and to give an example of what we can, unfortunately, expect going forward under this new bill.

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