“The government keeps making independent agencies that ministers claim they cannot control. How will this new defence corporation stay accountable to Parliament?”

“Madam Speaker, since the Trudeau government was elected in 2015, all sorts of independent agencies and organizations have been created to deal with all sorts of things. I often hear the Minister of Public Safety say that he cannot intervene politically because the Canada Border Services Agency is an independent agency and so is the RCMP. When it comes to the new entity provided for under Bill C-40, how can we be sure that accountability to parliamentarians and government accountability will be upheld and not delegated to another body that does not have the same accountability requirements?”

“This bill stops the procurement ombud from reviewing buying decisions made by a Crown corporation. Small businesses already struggle with the military's buying rules and with unfair decisions. If they cannot go to the ombud for help anymore, who will make sure the process is fair to them?”

“Madam Speaker, we recently learned from an article in The Hill Times that under Bill C‑40, the procurement ombud’s authority would not apply to procurement decisions made by a Crown corporation. I find that rather concerning. Small SMEs often contact us and say that they have a hard time getting into the Department of Defence and understanding how the process works because of how rigid it is. Unfortunately, decisions are also sometimes made in a cavalier way and to the detriment of businesses. At that point, there can be recourse to the procurement ombud. Under Bill C‑40, there would be no more recourse. Who is going to ensure that procurement is done properly and that businesses are not adversely affected during the process?”

“Our military equipment is old and broken from years of neglect. The government wants to spend billions more on defense, but it has no clear plan and is using accounting tricks to hit spending targets. They also put the Prime Minister's banker friend in charge of buying equipment instead of someone qualified. Parliament must hold the government accountable so this money is spent on real needs instead of being wasted.”

“Madam Speaker, we are here today to discuss Bill C-40, which was introduced by the Liberal government on the other side of the House. Essentially, Bill C-40 creates a new, ostensibly independent structure. I will come back to this independence issue later. Known as the Canadian corporation for defence investment, this entity would be a Crown corporation responsible for running its own operations, a bit like other Crown corporations such as the Canadian Broadcasting Corporation, for instance. As far as Bill C‑40 is concerned, no discussion of military procurement can ignore the broader problem facing Canada’s military equipment. A lot of people are aware of the state of Canada’s aging, underperforming and often non-operational equipment, which has made headlines after all. This equipment includes certain Canadian warships that are more than 40 years old, and four submarines, only one of which is operational while the others remain dockside undergoing endless repairs. Things are reaching a point where maintaining this broken equipment is so difficult that some people wonder whether it will ever return to service. We can even think of the old jets, the famous F‑18s from the 1980s. I was born in the 1980s, and these jets are older than I am. We see that there is a problem of underinvestment in defence, which means that the armed forces’ equipment is in a sorry state. I would go even further and say that a while ago, we got our hands on an internal Canadian Armed Forces report stating that no less than 50% of their equipment is allegedly unusable. It may be on the inventory, but the reality is that this equipment is gathering dust and rusting away because it is too old and no longer functional. There have been so many budget cuts in this area that, according to some reports, soldiers had to buy their own boots and get reimbursed for them afterward. There were even some reports last year indicating that the Canadian Armed Forces could not even intercept the Chinese weather balloons flying over Canada. The armed forces could not even do that because they had so many problems related to efficiency. I think Canada’s army looks like a bit player on the world stage. I would even say it is in bad shape. This is the result of many years of complacency, unfortunately, so now it has some catching up to do. There has been a lot of talk over the past few years about Mr. Trump wagging his finger at us and saying that Canada needed to do its part and invest in its military. That said, we do need to take this issue seriously, but not only because of the U.S. President. As everyone knows, Russia is becoming increasingly aggressive, as its invasion of Ukraine demonstrates. China is also posing an increasing threat to Taiwan. Major powers are challenging the U.S.-led order. That was once the dominant world order, but that seems to be less and less true these days. Given the U.S. withdrawal, there is a need—or at least, a sense of urgency—to reinvest in our military capabilities and ensure that we can defend ourselves adequately, especially considering that virtually all of the equipment we have is operationally dysfunctional. Looking at the figures, it cannot be said that nothing has been done. In budget 2022, the defence budget stood at roughly $30 billion. By 2025, it had risen to $60 billion, effectively doubling. That said, this is what appears on paper. As was mentioned earlier in the House, the government has also engaged in a degree of creative accounting by including in defence spending costs that do not necessarily relate directly to defence. This includes, among other things, moving the Coast Guard into that spending category, as well as substantial increases to military salaries and pensions. As a result, there are no more soldiers and no more equipment, but on paper more money has been spent and Canada appears to be moving closer to the prescribed targets and ratios. All of this has contributed to Canada finally reaching the much-touted benchmark of spending 2% of GDP on defence, which is NATO’s baseline target. As long as anyone can remember, that has always been the target, yet Canada has almost never met it. However, Canada appears to have reached that target over the past year through creative accounting. To give the average person an idea, $60 billion is the equivalent of Quebec’s health care budget. People generally have no idea what that amount represents; clearly, it is a lot of money. It goes to things like hospitals, doctors and nurses. The federal government is now engaging in some creative accounting to put the equivalent of all of that into its military budget. That represents 2% of the gross domestic product. That is quite a lot of money. The government is now promising to go up to 5%. The actual commitment is 3.5%, not 5%. All that to say that the budget would increase from $60 billion to $160 billion in 2035. As we can see, a great deal of money would go to defence. As for me, a light bulb has turned on, and it seems to me that there may be a danger or risk associated with this sudden, radical and drastic increase to the budget of the Department of National Defence. Members may agree that we need to invest more in the armed forces, but this does not mean that there are no risks. I identified the same risks as those outlined by the Parliamentary Budget Officer, who was invited to appear before the committee. Those are risks that I thought were an issue. In her opinion, a budget that increases so quickly might cause a problem because, if a government normally allocates x amount of money and doubles it the next day, there could be some waste. That may be the case, particularly since the government seems to want to reach the long-standing 2% target, or even 3.5% or 5%. In the end, the goal seems to be to spend as much as possible to reach the quotas. In fact, the goal should be to make the right investments in the right places. I think that is what we should prioritize. That is why parliamentary accountability will be key. It is about ensuring that money is not being spent just for the sake of spending, and that it is being invested where there are real needs. During her appearance before the committee, the Parliamentary Budget Officer even told us that the government had no plans. I am not making this up. She asked to see the defence investment plans for the coming years, but there are none. The government is committing to spending 5%, yet it does not know how much will be spent next year, or the year after that, or in the years to come. Worse still, the government cannot tell us what the money will be spent on. The only thing we know for certain is that the government will meet its target. Understandably, that is worrying. I am getting the impression that the government is winging it. I, for one, do not think the government should be winging it when billions of dollars are at stake. We are talking about a lot of money, and it cannot be spent haphazardly or without a clear plan. There also appear to be serious problems within the defence procurement system. We have already touched on the major challenges. Incompetence also seems to be an issue. There seems to be a deeper problem, at least when it comes to efficiency and the internal management of defence procurement. To fix the problem, the Liberals announced a solution last year. They wanted to create an agency to manage defence procurement. Going forward, responsibility would rest not with Public Services and Procurement Canada, but with an independent agency. That meant finding someone to run the agency. Who did the Prime Minister put in charge of the agency? Obviously, given the size of the agency and the amount of money involved, a top-tier manager was needed. What skills and qualifications did the government look for in the future defence procurement superhero? Did it look for someone with expertise in procurement? The answer is no. Did it look for someone with expertise in defence matters? The answer is no. Did it look for someone with expertise in emerging technologies, perhaps a former member of the military? The answer to all of those questions is no. Instead, the government brought in a banker, a guy from the upper echelons of international finance. That is what happened. He was chosen by the Prime Minister. What made him the most qualified candidate? Well, he is a personal friend of the Prime Minister. They met back when they both worked at Goldman Sachs. A friend is a friend. There was a lot of money to spend, and a friend was going to be the one spending it. When the Prime Minister called him, he probably said something like, “Hey, buddy, I have hundreds of billions of dollars to spend on defence. I know you have zero qualifications in that area, no military background and no expertise in procurement or new technologies, but you are a banker and you know numbers. I thought maybe you would like to spend all this money for me, so I am going to hire you.” There was the WE Charity scandal, where a billion dollars supposedly went to friends of the Liberals. There was the ArriveCAN scandal, with costs ballooning from $80,000 to $54 million for an app. There was also the Phoenix pay system, which was supposed to save the government $78 million a year but instead, ended up costing $2 billion. After all that, the Liberals found a new gravy train for their Liberal friends. Now this, this really worries me. A guy like that, a top gun, a friend of Carney, an international investment banker—”

“I do not support this bill. It creates a new Crown corporation to buy military equipment, but it gives this group too much power and too little oversight. The minister will pick the board members and tell them what to do. The procurement watchdog will not be able to review its choices. Billions of tax dollars will be spent behind closed doors with less accountability to Parliament.”

“Madam Speaker, thank you for the reminder. A high-level banker needs to get paid his worth. People like that do not dine on chicken nuggets at McDonald’s. They eat what ordinary people cannot afford. Do my colleagues know how much he makes? He makes twice as much as the Minister of Finance and National Revenue. He makes more than the Prime Minister. He makes more than the Governor General and that is no mean feat. It is quite something. In fact, our current Prime Minister’s financial-sector friend, or colleague at least, earns $700,000 a year. Even that was not enough for him. Within six months, he was threatening to resign. It was too little for him. In fact, he found out there were public servants in government. That was the last straw. Since he was allergic to public servants, he started blackmailing the government. In the end, he did not resign. He is still around. Apparently, he is still in his office in Toronto. I do not know if he has ever been seen in the agency’s offices, but he is still there. The funny thing is that an agency was created just for him. This is the agency that was supposed to be created under Bill C-31. I did say that it is a bill. It is not even a law yet, and now the government is introducing Bill C-40 to scrap what was in Bill C-31 and create a new crown corporation. Maybe it will become the “House of Guzman”. Essentially, this will eliminate what was already tailor-made for the Prime Minister’s buddy and make his life even easier. That is my take on all of this. We are essentially creating a new entity with a new board of directors and a new corporate headquarters, the location of which is still unknown. We know that the current CEO is very fond of his offices in Toronto. We do not know if that is where it will end up, but I hope not. However, it seems that it will be up to the corporation to decide that later on. Interestingly enough, when we go through a Crown corporation to make purchases worth billions of dollars, as is currently planned, that Crown corporation will not need all the usual government approvals to proceed and move forward with its decisions. Sometimes, the Treasury Board may not have a say. The much-vaunted new Crown corporation will have all sorts of powers, such as the power to make advance payments, provide loan guarantees, lend money and even buy company shares. What would the limits be? It is not 100% clear. Apparently, for less than $1 billion, it will not even need to ask the government for permission unless explicitly requested by the government. The bill says that it will create a defence agency that will be at arm’s length from the government. I always find it interesting when people say that it will be at arm’s length from the government. When we look at who sits on the board of directors, we see that the deputy minister will be there. The members of the board of directors—it is not an army, it is five people—are all going to be appointed by the government. This can be found in subclause 9(2) of Bill C‑40. We cannot make this stuff up. The Corporation must do as the Minister directs, and doing so is deemed to be in the best interests of the Corporation. This obviously means that the corporation is not at all at arm’s length from the minister. The minister can direct the corporation to do anything. There is no real independence. It is kind of a smokescreen to say that it is at arm’s length. It will be able to be blamed when poor decisions are made, but ultimately, all decisions will still go through the minister’s office. The only difference is that there will be less transparency and less accountability. We are concerned about that. Here is a legitimate question: Do we really want what will probably be hundreds of billions of dollars of procurement to be completely out of the government’s hands and be completely apolitical? That seems like a lot of money to me. I think that it is reasonable to be able to raise questions and that there should be some political oversight when such huge amounts are involved. Calling for politics to be taken out of something is often a way to claim the moral high ground. Defence already has the ability to identify its own requirements. When it comes to procurement, there are often strategic, geopolitical and industrial implications. I think that political considerations have been overly demonized. I am not suggesting that it should be driven by patronage or handed out to Liberal Party cronies. That is what is likely going to happen: the Prime Minister appoints one of his friends and wants as little accountability as possible. Hundreds of billions of dollars will end up there, and they will spend it however they want. I am not sure that is the best solution. We are told it will move faster, but we were also told that we were going to build more housing. I call that slogan-based governance. Every time there is a problem, the government makes grand promises and comes up with catchy slogans. Ultimately, it does not produce tangible results. That is the case, for example, with Build Canada Homes. We were told that 500,000 homes would be built. The report we saw recently stated that we were quite far off and not even half the target had been reached. We keep creating new structures: the financial crimes agency, Build Canada Homes, a defence bank, the Major Projects Office and the Canada strong fund—the much-vaunted sovereign wealth fund. Normally, a sovereign wealth fund consists of money that has been saved. In this case, however, it is being financed through borrowing. We are constantly seeing slogan-based governance, with too little attention paid to solving the real problems. According to an internal report from the Canadian Armed Forces, it takes anywhere from four to 24 years to deliver a simple procurement project in Canada and from 10 to 28 years to deliver a complex one. That is a serious problem. However, I am not convinced that it is a structural problem. It may well be a cultural one. How do we explain the fact that, among all NATO countries and all Five Eyes countries, none has needed a Crown corporation to manage military procurement? Apparently, Canada is the only one that would require one. I have a hard time making sense of what the government is presenting to us today. It strikes me as just another arrangement under which decisions will be made behind closed doors and well-connected individuals will be free to do as they please. I find that deeply troubling, particularly since we have learned that the procurement ombud will not even have a say in the decisions that will be made by this new entity. For example, a company that believes it has been treated unfairly during the process will have no recourse because the Crown corporation will be the one that makes the decisions, period. No one will have the authority to review the decisions made by this agency, which will no longer even be an agency but rather a Crown corporation. What we are also seeing with the creation of these new structures, as I said, is a tendency on the part of this government to want to create new structures by saying that they represent a blank slate, that the government needs to be given a chance and that a blank slate is beyond reproach. We are told that we need to act in good faith and give the government a chance. However, what we have seen is that all these blank slates and new structures are generally designed to reduce accountability to Parliament, resulting in decisions being made increasingly behind closed doors. I find that rather troubling, because we should expect greater transparency and accountability, not less, especially when even more money is being invested in defence and other priorities.”

“The government's defence spending is confusing, even to the Parliamentary Budget Officer. The government seems to be spending money quickly just to hit targets, instead of spending it for the right reasons.”

“Madam Speaker, in connection with what my colleague just said, the committee also heard from the Parliamentary Budget Officer, who admitted that she herself is having a hard time keeping track of government spending on what is included in NATO, what is not included in NATO and what is included in National Defence spending. It is very difficult to find out what is really going on. If the Parliamentary Budget Officer is confused, I think that quite a few people would have reason to be confused. As for including the Coast Guard in the management of National Defence and raising salaries, I am not saying that those were bad decisions. I think that these are decisions that can be justified. What matters, however, is that they not be made on the fly and that they not be decided on the back of a napkin simply to meet targets. That is what it seems like right now. These decisions are not being made for the right reasons. The government is making these decisions just to meet targets, to show that it is spending as much as possible. I think the goal should not be to spend as much as possible. That is more or less my message. The goal should be to spend on the right things for the right reasons, and on that front, I am not sure the government is on the right track.”

“Politicians already interfere with military purchases. This bill moves those decisions even further from Parliament, making them harder to watch. We need more transparency, especially when the Prime Minister can appoint his personal friends.”

“Mr. Speaker, I would say yes in response to my colleague. In fact, the reality is that when it comes to decisions that are sometimes made in a vacuum, with political influence and interference and all that, I get the impression that there already were some. There were probably already some at National Defence. There were probably already some when it came to procurement as well. What we are going to experience is a situation that will be even further removed from Parliament. That means it will be even harder to ensure accountability and transparency. That is where the issue lies, and I think it is important to seek as much transparency as possible. What is more, the Prime Minister appointing one of his personal friends can only lead to suspicion on our part.”

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“This bill just changes the name of our defence agency. It does not seem to add real projects or help Canadians and Quebecers. It looks like a way for the government to avoid blame if things go wrong later.”

“Mr. Speaker, I thank my colleague for his remarks. As always, he demonstrates a thorough grasp of the file. Perhaps he can help clarify something for me. As I read this bill, I am having some difficulty following it as well, much like my colleague. We currently have the Defence Investment Agency, which would be replaced by the Canadian corporation for defence investment. Aside from a change in name, letterhead and business cards, and setting aside the possibility of creating a well-paid position for a friend of the Prime Minister, what would actually change? Does this bill actually contain any defence investment projects? For now, it appears to be largely cosmetic. The only purpose I can see for this legislation, although I may be missing something, is that it would allow the government to wash its hands of any future problems. It could then say that the matter is not under its control because it falls within the mandate of a Crown corporation. Am I mistaken, or is there genuinely some added value here for Canadians and Quebeckers?”

“The government wanted to create a new defence agency to fix buying delays, but Parliament has not even approved that agency yet. Now the government is proposing another new plan before testing the first one. This keeps making things less open and less accountable.”

“Mr. Speaker, what is most surprising about Bill C-40, which is before us today, is that the government was already pointing to problems with supply, delays and efficiency at National Defence to justify the creation of the Defence Investment Agency through Bill C-31. The problem is that this solution has not even been tested. The agency has yet to be established because Bill C-31 has not even been passed. In reality, it is an office within the department responsible for procurement, but the agency does not yet exist. This agency has not really been put to the test yet, but some have already come to the conclusion that it does not work. I find that really strange, because this is this very same government that, not so long ago, was telling us that this was a new initiative that would solve all our problems. Now, we are being presented with yet another new initiative that will solve all our problems, whereas, ultimately, all we are seeing is a continuing trend towards less transparency and less accountability.”

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“None of our allies use a state-owned corporation to buy military equipment. The government claims this new corporation is independent, but that is not true. The minister will pick its board and tell it what to do.”

“Mr. Speaker, I would like my colleague across the way to give me the information he has, because we have done some research, and to my knowledge, there is no NATO or Five Eyes member or western allied country that has a Crown corporation looking after its military procurement. I can see what is going on. The government would have us believe that this is independent, that this is apolitical, even though the corporation’s statutes and rules will state that it must do everything the minister orders and that the minister is the one who appoints the board of directors. That is not unusual. Defence is such a strategic issue that it makes sense to have some political oversight. I get the impression that there is some doublespeak. The government claims that this corporation is independent when it actually is not. It is trying to make us believe things that are not true. This is only natural; defence is so strategically important that it is necessary to take an interest in it.”

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“The government says it wants to spend more on defence to meet NATO targets. It also inflates its defence numbers. Now it is cutting spending across departments, including the military. That makes no sense.”

“Mr. Speaker, that is a very good question. We have already talked about the government’s creative accounting to inflate defence figures by boosting salaries and including the Coast Guard. What we are also learning is that the government has directed all departments to make spending cuts. At a time when military spending needs to increase in order to meet NATO targets and when the government says that it intends to reinvest in defence, it would be reasonable to expect National Defence to be exempt from those cuts. Apparently, this is not the case, as DND is also affected by the cuts. I am struggling to find the logic in that. It simply does not make sense to me.”

“The government is winging it. One bill creates an agency to solve a problem, but another bill cancels that same agency before we even finish debating it. The government should have prepared a finished plan. Why did it give up on its first idea so quickly?”

“Mr. Speaker, I would like to talk to the Parliamentary Secretary to the Leader of the Government in the House of Commons about winging things. My colleague from Pierre-Boucher—Les Patriotes—Verchères spoke to this earlier. It was one of the concerns he had about the bill. As we saw in Bill C-31, the government is trying to create an entity to address the problem currently under debate. At the same time, Bill C-40 scraps the idea the government proposed in Bill C‑31. If that is not winging it, what is? Either the government is not ready to propose an idea, or it is proposing an idea that is still being debated. This morning, Bill C‑31 was discussed in committee, yet here we are in the House debating a different bill, Bill C‑40, that discards what is set out in Bill C‑31. Seeing both ideas up for debate at once, without either of them having been tried and critiqued, makes me wonder why the government did not simply prepare something that was finished, rather than something that requires corrections along the way. Can my colleague tell me why the government no longer wants to go through with what it had previously proposed in Bill C‑31?”

“I want to know why the government dropped its first defence bill to replace it with this new one. Switching bills so quickly makes it look like the Liberals are just making things up as they go.”

“Mr. Speaker, I did not get an answer earlier from the parliamentary secretary to the government House leader, so I will ask my colleague opposite the same question about Bill C-31 and Bill C-40. The Liberals were trying to create something with Bill C‑31, which we are still debating, but it will likely end up being scrapped because they are replacing it with Bill C‑40. Why did the government change its mind about something that was supposed to be such a good idea? With the Liberals switching so quickly from Bill C‑31 to Bill C‑40, does it not seem like they are just winging it?”

“This bill spends defence money on new government offices and high salaries for political friends instead of buying tanks, planes, or recruiting soldiers. I want to know what my colleague thinks about meeting our NATO defence spending targets this way.”

“Mr. Speaker, I would like to hear my colleague’s views on the 5% of GDP that NATO requires for defence spending. Personally, I thought the government would be investing in buying tanks or airplanes or recruiting new soldiers. Instead, it seems to be investing primarily in organizational structures. There was going to be an agency, and now it will be a corporation. There was going to be a director, but now they will be called something else. I do not know what the person’s title will be, but their salary will be at least double that of their predecessor. The government is tinkering with structures. All of this comes at a cost to Canadians and Quebeckers. At a time when everyone is tightening their belts and being asked to pay more, the government is spending money not on improving our defence capabilities, but on creating new structures and jobs for the Prime Minister’s friends. This strikes me as a highly questionable way of meeting the NATO target. What does my colleague think?”

“Our translation system has problems when a Quebec member feels they must speak English to be understood. Also, this bill does not seem to make real investments in defence. It just turns an agency into a Crown corporation. I want to know if this bill will actually train soldiers and buy planes, ships, and tanks, or if it is just a cosmetic name change.”

“Mr. Speaker, I thank my colleague for her speech. Before I ask her a question, I want to point out to the House that this is a perfect example of the problems we have with the interpretation system. It is forcing a colleague from Quebec to give a speech in English to ensure that her anglophone colleagues understand it. I think that is a shame. Let us not forget that. That said, Bill C‑40 talks about investments. In fact, it talks about transitioning from an agency to a Crown corporation. It is six of one and half a dozen of the other. To me, it does not seem like a significant investment to improve Canada’s defence situation. It looks like a minor change to me, a cosmetic change. I want to hear my colleague’s comments on that. Is this bill calling for clear investments? Will the government actually hire soldiers, train them better, or buy planes, ships and tanks? Is there any investment in defence, or is it just a change in the name of a structure? At the same time, could the same thing not have been done with an agency rather than a Crown corporation? It is all a bit discouraging.”

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“If this new agency becomes a Crown corporation, the ombudsman will not be able to investigate complaints from small businesses. This is not transparent. I want my colleague to support a change to the bill that lets the ombudsman oversee Crown corporations.”

“Mr. Speaker, I commend my colleague on her speech. I have a specific question for her. The thing I take issue with in this bill is that if the agency becomes a Crown corporation, the procurement ombud will no longer have the power to intervene. The ombud’s jurisdiction does not extend to Crown corporations. This means that if a small business wishes to file a complaint, it may not be heard because the ombud’s jurisdiction does not cover Crown corporations. Does my colleague not think that this shows a lack of transparency? Knowing my colleague, it seems to me that she would support an amendment to the bill that would extend the procurement ombud’s jurisdiction to include Crown corporations.”

“I want to know what this bill actually gives our military, like more soldiers, planes, or ships. The government has not given me a clear answer. Setting up a Crown corporation just lets the government avoid taking responsibility for its actions. Does my colleague agree that this is the only real change the bill makes?”

“Mr. Speaker, I would like to ask my colleague a question because I have not been able to get a clear answer from our colleagues in the government as to what, in practical terms, this bill will achieve within our armed forces. Will we have more tanks, airplanes, ships, soldiers and so on? Does he have an answer to that question? If not, does my colleague agree with me that the only change is that, with an agency, the government remains accountable to the public, whereas under a Crown corporation, even if the government issues the same directives to it, there is less accountability? The government will say that it is a Crown corporation and not the government itself. To my mind, that is the only advantage I can see. Does my colleague agree, or am I mistaken?”