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)

29 statements

Lori Idlout, Nunavut

Liberal
“I want to know how this bill will help set up defence sites in the North. Doing business in the North is hard. I want to know how this bill protects Arctic security.”
Official Hansard

Uqaqtittiji, I really appreciate our government’s focus on Arctic sovereignty and Arctic security. I think that we all know that doing business in the north is a lot more challenging. I wonder if the member could respond to the question of how the bill would be impactful for the establishment of NOSH sites or NORAD sites and the importance of the bill to keeping Arctic sovereignty and Arctic security.

Stephen Fuhr, Secretary of State (Defence Procurement)

Liberal
“The Conservatives cut defence spending to less than 1% of our economy. The Liberals doubled military spending, and NATO confirmed that Canada met its target. We need this bill because the government needs a better system to spend defence money properly. I am asking for one more minute to speak.”
Official Hansard

Madam Speaker, as my colleague was building an alternate universe, I ran out of paper, so let me just try to respond. It was very high level. For years, the Conservatives have crowed about supporting the military and spending and all this stuff. They did buy a few things, there is no question about it. There is the list of things the member pointed out, and I think there was even a compliment in there somewhere for me, so I thank him for that. I appreciate it. At the end of the day, they spent less than 1% on defence spending. If we add up everything he said, when it got the keys to the car, the government was spending 1.13%. When it was done, it was under 1%. If we add all the pluses and minuses, we end up with a pretty big deficit. I had mentioned in my comments earlier that the previous Liberal government doubled defence spending and got it from under 1% to about 1.43%, but we did not get to 2%. Part of the reason we did not get to 2%, although we doubled the defence spending, is that we did not have a process that could dispatch the funds and a machine that could do it in a way it needs to be done, hence we are standing here talking about a new way of doing business that will meet the moment. I will say that we did get to 2% in about eight months from 1.5%. I know my critic over there is shaking his head because he found some conspiracy theory place that disagrees, but does he know who audits those numbers and actually says whether we make the number or we do not? It is NATO. NATO has decreed that Canada has met the bar. Everybody else can have an opinion, but the one that matters is NATO. It has confirmed that Canada did indeed meet the target. Can I have another minute? He had about 10 minutes. I am just getting warmed up.

Mark Gerretsen, Kingston and the Islands

Liberal
“We did not use creative accounting for our defence spending. We started counting the Coast Guard so our numbers would match how other countries, like the United States, count theirs. I want the member to rephrase what he said.”
Official Hansard

Madam Speaker, I was sitting upstairs in my office watching this debate and heard the member’s account of creative accounting as it relates to the percentage of GDP spent on defence, and I could not help but come here to challenge him on that point. He is saying that we came up with a new creative accounting measure that basically started including things like the Coast Guard, but that is not true. The reason we include the Coast Guard now is that other countries like the United States have always been including the Coast Guard. We decided that, rather than let the formula be different for each country, we should have a formula that is consistent among other countries. How do I know this? I learned it at the same time the member learned it when we both sat on the national defence committee together back in 2017. Would the member like to rephrase the way he made that intervention earlier by suggesting it was creative accounting when all we were doing was matching our accounting with the way that other countries were doing it?

Tim Watchorn, Les Pays-d'en-Haut

Liberal
“Members of the armed forces and Coast Guard told our committee that they appreciate our new defence spending and their pay raises. This is not creative accounting. NATO decides who meets the 2% defence target, and Canada has reached it. I want to know if the member supports these pay raises. I also want to know if he supports moving the Coast Guard into the Department of National Defence.”
Official Hansard

Madam Speaker, my colleague is a new member of the Standing Committee on National Defence, and we thank him for his work on that committee. I listened carefully to his speech, and I think he should offer his talents to screenwriter Fabienne Larouche to write fictional scripts for phone calls. I think that is very interesting. On a more serious note, my colleague talked about creative accounting. We had the opportunity to welcome members of the Coast Guard and armed forces to the Standing Committee on National Defence. They told us how much they appreciated the new investments in defence and the pay raises. First, I would like to know if my colleague agrees with the pay raises. Second, I would like to know if he agrees that it would be beneficial to integrate the Coast Guard into the Department of National Defence itself. I think it is important to mention that this is not creative accounting. It is NATO that determines who reaches the 2% target and who does not, and Canada has clearly reached 2%.

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

Liberal
“We need to pass this bill to buy military equipment faster and better. Other allies like the UK and Australia are already doing this. Hitting our defense spending target is a good thing because it gets our troops the equipment they need.”
Official Hansard

Mr. Speaker, I find it unfortunate that it seems that the Conservatives and the Bloc do not support the need for a corporation. It is not like it is absolutely unique. We could take a look at other Five Eyes countries, in particular the U.K. and Australia, where there has been movement toward ensuring that there are better processes for procurements. Yes, the Prime Minister could be accused of hitting the 2% target of our GDP, but I would argue that is a positive thing. To ensure we are able to provide the support for our military personnel in equipment, if not this, then what does the member believe would be better to ensure that we are able to deliver in a more appropriate and faster fashion the military equipment our forces require?

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

Liberal
“I want the Conservatives and the Bloc to vote for this bill. It creates a government corporation to buy military equipment. This will keep spending accountable, protect our country, support our allies, and create good Canadian jobs.”
Official Hansard

Mr. Speaker, I will be sharing my time. Allow me, first, the opportunity here in debate to express my most sincere prayers and best wishes to the families, extended families and communities affected by the disaster in Wainwright. I had the privilege of serving in the Canadian Forces. I was actually posted out in Edmonton. We would often get military personnel coming in from Wainwright through the air force base in Lancaster Park. I know there are strong connections among the military families and members of the Canadian Forces and DND officials. I would let them know that the government and all members of the House are there to support in whatever way we can. It has been interesting listening to the Conservatives and the New Democrats talk about this piece of legislation. When I posed the question to the member from the Bloc, he seemed to be surprised at some of the other Five Eyes countries. If we take a look, we will find that there is some movement toward not necessarily Crown corporations but ensuring that there is one agency that is more accountable in making those military expenditures. We can take a look at the commitment the Prime Minister made to Canadians in the last federal election to invest in and build our Canadian forces, recognizing that Canada does have, and has to have, a role in the United Nations and with our allied partners. That is the reason we are the first government in generations to actually hit the 2% of the GDP ratio that Canada has been asked to hit for generations. Under the leadership of the Prime Minister, we achieved that within six months of the last election. If we put it through that lens and that perspective, we see that it is important to not only be able to hit the target, but also make sure that we are delivering, in tangible ways, the military supports that are absolutely essential. One of the early initiatives was the recognition that our military personnel were underpaid. That is one of the things that was dealt with, again, within the first half year of the new government. We are now talking about a Crown corporation that has a very important responsibility to all Canadians. We look to the opposition to recognize that, as provincial entities and federal entities, there are all sorts of arm’s-length Crown corporations that are there to protect the public interest, whether it might be supplying water, providing hydro or providing automobile insurance. There is a litany of provincial Crown corporations along with many federal Crown corporations. For the most part, as this one will be, they are arm’s-length. There will still be a high sense of accountability, given the amount of dollars that are being spent, by the establishment of an associate minister who would have the sole responsibility of making sure that our Canadian Forces are being armed with the things that are necessary for us to protect our sovereignty as a nation and to be able to contribute, in a very real way, to the United Nations and our allied countries. That is something we have taken very seriously, first by making a substantial commitment. When we hear of a substantial commitment, we can compare this Prime Minister to Stephen Harper when the current leader of the Conservative Party sat around the cabinet table. At that time, we were at 1% and being soundly criticized by countries around the world for not investing enough in our Canadian Forces. Even politicians here in Canada, members of Parliament on all sides of the House, would say we needed to invest more. We have a Prime Minister who took the initiative and did just that, and he did not leave it at that. Through Bill C-40, he established the opportunity for Canada to not only invest in our military but also look at industries within Canada today that create middle-class, good, strong, healthy paying jobs in the military-industrial community, which is very real and substantial. This procurement process and the establishment of a Crown corporation would not only stabilize but also grow. We will see growth in our industrial community in the production of military equipment. I can talk about military vehicles. It could be light armoured vehicles. There are many military parts for vehicles. I could talk about aircraft equipment. Part of the F-35 wing was developed in Winnipeg. It was worth tens of millions of dollars. If members want to see the expertise that goes into that, they should go to Magellan, visit the site and see the sense of pride in what they are doing for the development of the F-35. Magellan is not alone. We can go to the provinces of Quebec, Ontario and Manitoba and other areas of the country to see that the aerospace industry is moving forward. Military procurement plays a critical role in the future of our military aerospace industry. We can talk about weapons and ammunition. It could be ammunition for rockets. I would go to a place like Magellan, which has developed rockets in the past in Winnipeg. I can talk about rifles. These are the types of equipment being built through technology here in Canada and exported. In fact, all the things that I have mentioned today are major exports out of Canada. We can think of drones, cameras or surveillance. These are things for which Canada is one of the leaders in the world. We can talk about naval equipment or training opportunities and the equipment that goes along with that. These are but some of the examples that Canada exports today. A Crown corporation would have the responsibility to not only equip Canada’s military but also ensure there is a clear process to advance an industry that is so very important to Canada’s sovereignty, our jobs and our economy. All of this can be wrapped up together as a way to continue to build a stronger and healthier Canada, as I have said before, that works for all Canadians. Our military is a very important aspect of that. I would ask Conservatives and Bloc members to review the position they have taken as of today on the issue. Providing more transparency and accountability through an independent, arm’s-length Crown corporation is a good thing and something I hope they will pass.

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

Liberal
“Government-owned corporations work well. Because they operate at an arm's length from government, they are more efficient, accountable, and transparent.”
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Official Hansard

Mr. Speaker, I appreciate the question from the leader of the Green Party. Personally, I understand and appreciate the value of Crown corporations because through them we can build in an arm’s-length component, which I would argue allows them to be far more efficient and better able to deal with the types of projects that have been assigned to them. There are many examples at all levels of government. Whether it is municipal, provincial or federal governments, they have clearly demonstrated that, through a Crown corporation, we can ensure a higher sense of accountability and transparency while at the same time—

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

Liberal
“This bill keeps the government accountable. It creates a new Crown corporation and makes an associate minister permanently responsible for it, so Parliament and the public have someone to answer to.”
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Official Hansard

Mr. Speaker, within the legislation is the idea of having an associate minister become permanent. Through that associate minister, we would receive that accountability. Therefore, not only is there a Crown corporation that in a very tangible way ensures transparency and accountability, but we also have, through the legislation, a government that is saying that it is not going to surrender all aspects of accountability. By having an associate minister tied to it, that means that members of Parliament in the House, and through them the public as a whole, would still have a minister, a go-to political individual, who ultimately has to be accountable.

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

Liberal
“Creating this government-owned corporation quickly is the best way forward. Our military deserves it, and it protects our economy and our national defence.”
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Official Hansard

Mr. Speaker, I believe the government, through the Prime Minister, recognizes the value of moving forward with a Crown corporation, and this is the best way to do it. We do not need to wait six months to a year to do so. We are moving quickly. The members of our Canadian Forces deserve it. In terms of Canadian sovereignty, both economical and military, this is the type of direction that I believe is good for the—

Tim Watchorn, Les Pays-d'en-Haut

Liberal
“I support this bill. It creates a new Crown corporation and updates our defence laws so the military and security agencies can buy equipment and services faster. This will help our armed forces face new threats and keep pace with our allies.”
Official Hansard

Mr. Speaker, I would like to begin by offering my deepest condolences to the families of the soldiers who lost their lives at CFB Wainwright this past weekend. Our thoughts are with their families and the families of the injured. Transforming the Defence Investment Agency into a Crown corporation would ensure that Canada is better prepared to meet defence and security challenges now and in the future. The agency will have the tools, flexibility and expertise to make strategic investments and respond more quickly to the needs of our armed forces and Coast Guard. This transformation is central to Bill C‑40, the strengthening Canada’s defence sector act. However, I would also like to draw the attention of the House to the significant amendments this bill would make to the Defence Production Act. These changes will better prepare Canada for an increasingly complex security environment. They are essential to strengthening our industrial base and ensuring that our defence procurement system can provide the armed forces and our national security partners with the capabilities that they need when they need them. The Defence Production Act has been a cornerstone of Canada’s defence procurement framework since the Korean War. Over time, as the security environment and the nature of national defence have evolved, the act has been amended a number of times. As the world continues to change rapidly, the legislation needs to adapt as well. In recent years, we have witnessed growing instability and unpredictability around the world. New threats have emerged, supply chains have become more vulnerable, and the importance of economic security has become impossible to ignore. At the same time, our allies have invested heavily in their defence industrial capacity so they can produce critical equipment and technologies quickly and at scale. Canada must keep pace with its allies. For many years, this act has guided our defence procurement and industrial strategy policies. However, it was designed for a very different era. Bill C‑40 modernizes this legislative framework to reflect today’s security realities and the increasingly close ties between defence, security, technology and economic resilience. Historically, the act focused primarily on defence equipment and infrastructure exclusively for national defence purposes. Bill C‑40 expands its scope to include national security and services related to both national defence and national security. This broader scope recognizes that contemporary threats rarely fit neatly within traditional categories. Protecting critical infrastructure, advanced technology, intelligence capabilities and supply chain security all play a role in protecting Canadians. Another important amendment seeks to clarify and expand procurement authorities. Under the Canadian corporation for defence investment act, the Minister of Government Transformation, Public Works and Procurement and Quebec Lieutenant would have exclusive authority to acquire supplies and services related to defence and security, not only for the Canadian Armed Forces and the Department of National Defence, but also for other federal departments, boards and agencies in the area of national security. After all, national security is a government-wide responsibility. Whether supporting border security, the protection of critical infrastructure, emergency preparedness or intelligence operations, federal departments and agencies are increasingly dependent on specialized equipment and services that contribute to our security objectives. It is important to recognize that maintaining national security is not limited to the procurement of goods and services. That is why Bill C‑40 allows the new associate minister of national defence for procurement to perform financial assistance operations related to production or investment in respect of defence or national security. These new powers will allow the government to play a more active role in strengthening Canada’s defence and national security industrial base. We are fostering innovation that supports strategic capabilities and ensuring that critical technologies and manufacturing capabilities remain available to Canada and our allies. This represents a real shift in perspective. Rather than viewing defence procurement as merely a purchasing exercise, this measure recognizes that it is part of a broader industrial and economic strategy. Investing in our industrial capabilities helps strengthen our sovereignty, reduces our vulnerabilities and supports good jobs across Canada. The proposed amendments to the Defence Production Act are only one part of a broader, comprehensive package of reforms set out in Bill C-40. These reforms include the creation of a Crown corporation responsible for carrying out production, procurement and investment activities in respect of national defence for the benefit of the Canadian Armed Forces and the Department of National Defence. It should be mentioned that the minister of public works and procurement would remain responsible for the Defence Production Act. As we modernize Canada’s defence production and procurement framework, accountability remains key. Bill C-40 strikes a balance between agility and accountability. It seeks to remove unnecessary barriers that can delay the delivery of essential capabilities to the armed forces, while maintaining government oversight of important decisions. Bill C-40 delivers on both. At the end of the day, our goal is not just to spend more or move faster. These changes are meant to create an efficient, transparent and accountable defence procurement and production system that delivers results for our armed forces while maintaining the trust of Canadians. At its core, this bill is about preparedness. It is about ensuring that Canada has the legislative tools it needs to build key capabilities, strengthen its domestic industrial capacity, support innovation, secure its supply chains and respond decisively to emerging threats. This bill reflects the reality that national defence and national security are increasingly closely tied to economic resilience, advanced technologies and industrial policy. Our government is proposing substantial yet necessary amendments to the Defence Production Act. These amendments broaden the scope of the act, strengthen procurement authorities, introduce new investment tools and establish updated procurement rules that are appropriate for the current security environment. Taken together, these measures aim to create a framework that is more agile and responsive and focused on Canada’s strategic defence and security priorities. This bill represents one of the most significant updates to Canada’s defence production and procurement framework in decades. It reflects a clear recognition that security challenges are evolving and that Canadian institutions must evolve with them. That is what Bill C‑40 is all about. That is how our government is making sure Canada remains safe, secure and sovereign. I look forward to taking questions from my colleagues about my speech.

Tim Watchorn, Les Pays-d'en-Haut

Liberal
“We want to make sure Canadian companies build as much of our defence equipment as possible. We are committed to raising Canadian content in our defence spending from 30% to 70%.”
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Official Hansard

Mr. Speaker, in our defence industrial strategy, we have three pillars: build, partner and buy. We have to make sure that Canadian companies are involved in the building of the maximum possible quantity of defence equipment and defence supplies. That is the reason we have to make sure that Canadian companies are always at the head of the line when it comes to defence procurement. We have made the commitment to go from 30% to 70% Canadian content in our defence spending. That is something we will definitely adhere to.

Marianne Dandurand, Compton—Stanstead

Liberal
“This defence plan could bring economic benefits to regions like mine. I want my colleague to explain what kind of benefits our communities can expect.”
Official Hansard

Mr. Speaker, I thank my colleague from Les Pays-d’en-Haut, who has been very active on the procurement and defence file, including for the benefit of the regions. We know that regions like his or mine, Compton—Stanstead, could benefit from the economic spinoffs associated with the defence procurement strategy. I would like my colleague to elaborate on the type of spinoffs we might expect to see in regions like his or mine.

Tim Watchorn, Les Pays-d'en-Haut

Liberal
“Defence spending is already helping our economy. A company in Mirabel got a $1.5-billion plane maintenance contract, and a new defence innovation centre is opening there. These projects give good jobs to local aerospace workers.”
Official Hansard

Mr. Speaker, we do not need to wait for the spinoffs, because they are already here. A $1.5-billion maintenance contract was awarded to L3Harris in Mirabel, in the Laurentians, for the CC-330 Husky refuelling aircraft. It has already been determined that the DISH, the defence innovation secure hub, will be established near Mirabel. Every person who lives in the Laurentians and has a good job in the aerospace sector will be able to benefit from these contracts and many more in the future, including Bombardier’s contract for the Global 6500 jets.

Tim Watchorn, Les Pays-d'en-Haut

Liberal
“We always planned to turn our temporary defence agency into a Crown corporation. Countries like the United Kingdom, Australia, Turkey, and Sweden already do this successfully. Our military needs modern tools quickly because technology changes fast. A Crown corporation will get our troops what they need.”
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Official Hansard

Mr. Speaker, the Defence Investment Agency was always intended to be a temporary measure. The goal was always to create a Crown corporation. That is what we are doing now. The benefits have been clearly demonstrated in other countries, such as the United Kingdom, Australia, Turkey and Sweden. They have models very similar to what our government is proposing today. The rationale has always been this: It is absolutely essential to provide our military personnel with the capabilities they need as soon as possible, given the technological changes we are seeing on a daily basis. A Crown corporation will do exactly that.

Lori Idlout, Nunavut

Liberal
“People in Nunavut will want to help keep the Arctic safe. How does this bill make sure Canadians are part of buying the supplies needed to protect the Arctic?”
Official Hansard

Uqaqtittiji, I know that Nunavummiut will want to participate in keeping the Arctic secure, and I wonder if the member can describe how this bill would help make sure that Canadians are part of the procurement process of keeping the Arctic secure.

Tim Watchorn, Les Pays-d'en-Haut

Liberal
“We must keep spending money on defence in the north. Our investments there are already helping communities and protecting our most important border.”
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Official Hansard

Mr. Speaker, we had the chance this summer to go to Inuvik to see how investments are already making a difference at the airport so that we are able to have our CC-330s land in the north and protect our north. We met with all the mayors and the regional first nations communities. We are also benefiting from all the money being spent up north. We will continue to invest in the north, because it is our most important border at this time.

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

Liberal
“This bill is not about corruption. It is about buying equipment for our military and helping Canadian businesses that make military gear. We spent 2% on defence, while her former government only spent 1%. How can she justify what she said?”
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Official Hansard

Mr. Speaker, the member is blind to the reality that this bill has nothing to do with corruption or character assassination. It has everything to do with providing strength to our Canadian Forces through military procurement and enhancing the Canadian industries related to military expenditures. That is the reality of it. Unlike the period when she was a member of Stephen Harper’s caucus, when they spent 1%, this Prime Minister’s caucus has not only committed but realized 2%. How does she justify her remarks?

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

Liberal
“We should create an independent corporation to buy military supplies. Other governments already use corporations like this successfully. It would make defence purchases transparent, accountable, and independent from the government. Why are the Conservatives against this?”
Official Hansard

Mr. Speaker, the Conservative Party is underestimating the true value of having an arm’s-length corporation. This is not new. In Alberta, there is the Alberta Investment Corporation. I believe there are corporations that deal with gaming, lotteries and cannabis. These are all multi-billion-dollar corporations. In fact, in Canada, I suspect we will find there are corporations that deal with procurement. Developing a corporation for the procurement of military supplies and equipment would ensure there would be accountability, transparency and a high sense of independence. Why is it the Conservative Party seems to be opposed to Crown corporations, even if they are at arm’s length from government?

Emmanuella Lambropoulos, Saint-Laurent

Liberal
“I want the House to pass this bill. It takes an average of 16 years for Canada to buy major military equipment because our system is too slow and divided between departments. This bill puts buying military gear under one agency and one minister so our armed forces get what they need faster.”
Official Hansard

Mr. Speaker, I will be sharing my time with the member for Orléans. Before I begin speaking to Bill C-40, allow me to say a few words on the tragic incident that took place at Canadian Forces Base Wainwright on Saturday afternoon. Sergeant Morgan Wong, Private Shaun Farrell, Private Aidan Goulding and Private Hayden Lykkemark are four lives and four families forever changed. Four futures were taken too soon. Behind each name was a cherished son, a beloved friend, a fellow soldier, and a life filled with hopes, dreams and promise. I say to the grieving families that no words can ease the unimaginable pain of their loss. I wish them my sincere condolences, along with those of my constituents in the Saint–Laurent community. My heart, and that of my community in Saint-Laurent, is also with those who were injured, their loved ones and the military community carrying the weight of this tragedy. It is in the spirit of respect for the men and women who serve our country that I wish to speak today. I am thankful for the opportunity to speak to Bill C-40, the strengthening Canada’s defence sector act, which is an incredibly important bill at a time of considerable uncertainty, ongoing tensions and conflict around the world, and at a time when Canada is finally stepping up to bring our military up to par. As a former member of the national defence committee, where I had the chance to work on matters of defence for several years, I know just how overdue these changes and investments are. I personally credit the Prime Minister for doing what is within our control to defend Canada and our sovereignty. Bill C-40 proposes to establish the Defence Investment Agency, the DIA, as a Crown corporation, to provide the agency with a clear mandate, a permanent structure and dedicated ministerial leadership focused on defence, procurement, production and investment activities in support of national defence and the Canadian Armed Forces. The DIA would operate at arm’s length under the national defence portfolio, reporting to a new minister titled the associate minister of national defence for procurement. The Office of the Procurement Ombud found this year that a major defence project takes, on average, 16 years to move through the full procurement pipeline, and in some cases as many as 28 years. Behind those numbers are real consequences. Canada purchased its CF-18s in the early 1980s, expecting to replace them in about 20 years. That did not happen. As the Auditor General told the national defence committee in 2023, the Department of National Defence had to increase the number of fighter aircraft available for operations by 23%. We heard from industry officials and independent experts. Their message was consistent: The process is complex, rigid, risk-averse, and it cannot keep pace with the changing technology. Industry witnesses called it overly complicated and costly in time and money. A witness who testified at committee in 2023 listed several challenges with the way we currently procure that create bottlenecks when it comes to defence procurement, including bureaucratic hurdles and the complexity of defence procurement processes, risk aversion issues and politicization issues, defence procurement personnel shortages, and a lack of transparency and accountability. Another witness described the bureaucratic steps and processes that are required to procure defence goods and services for the CAF as a “labyrinth of procedures and processes” that are implemented and managed by several federal organizations. On structure, the testimony was just as clear. The Parliamentary Budget Officer told us that having one single minister and one single senior official responsible would speed up procurement, rather than having two ministers in two separate departments. Unless one minister is placed in charge of defence procurement, it will never be as efficient and effective as it could be. The current procurement system is simply not able to provide the CAF with the major weapon systems, latest military technologies and equipment it needs to maintain its operational readiness and combat edge in a timely and cost-efficient manner. In identifying several challenges facing Canada’s defence procurement processes and proposing possible solutions, witnesses at committee mentioned making defence procurement a national priority, promoting a sense of urgency in the defence procurement system, improving data collection analysis and performance measures relating to defence procurement, centralizing defence procurement, increasing defence procurement budgets, accelerating the pace of defence procurement, streamlining defence procurement processes, learning defence procurement-related lessons from allies, depoliticizing defence procurement, reducing risk aversion, investing in the defence procurement workforce and enhancing transparency and oversight. Let me turn to what the bill would actually do and how it would solve these problems. Today the Defence Investment Agency sits within Public Services and Procurement Canada, while the needs are defined at the Department of National Defence. The bill would move the agency into the national defence portfolio and put procurement and commercial authorities in one organization. Therefore, it would end the split that currently exists. Second, it would create one accountable minister. Part 2 would amend the National Defence Act to create an associate minister for national defence for procurement, who would answer to Parliament for the agency. Witnesses told us they wanted one minister and one point of accountability, to make the system more efficient and easier to navigate. Third, it would build expertise. The corporation would bring together a dedicated team of procurement professionals, guided by a board of directors and chief executive accountable to that board. The ability to recruit talent from outside the public service would further strengthen its specialized knowledge and commercial expertise. This responds directly to what I heard on the committee about the value of focused leadership and dedicated capacity. With clear responsibilities and commercial authorities, the corporation would be equipped to make informed, timely decisions and deliver results. Fourth, the bill comes with safeguards. The corporation would be accountable to the government through a responsible minister, with legislated governance; financial, audit and reporting requirements; and parliamentary oversight. National Defence, the Canadian Armed Forces and the Canadian Coast Guard would continue to define what capabilities they need and the criteria for accepting them. The military would still decide what it needs. The corporation’s job would be to deliver it. Witnesses have emphasized that one of the most important challenges facing Canada’s defence procurement system is the lack of clear ministerial accountability, stemming from responsibilities being spread across multiple federal departments and agencies. While calls to centralize defence procurement under a single organization are not new, meaningful reform requires more than structural changes. It requires a fundamental shift in culture, leadership and accountability. Bill C-40 would set a great foundation, one upon which we could build and incorporate other smart and efficient practices, such as those that were recommended in the 2024 report. I personally put forward about 10 of those recommendations that were adopted by the committee, including recommendation 17, which was mentioned by the secretary of state earlier today in his speech. Other recommendations that I had put forward include: That the Government of Canada proactively collaborate with industry and universities early on to determine current capabilities and to come up with a made-in-Canada solution by leveraging our innovation and industrial strengths to meet our growing defence and security needs and to work collaboratively towards developing the tools and technology that will be needed by the Canadian Armed Forces in the years to come. There was also this one: That the Government of Canada make the procurement process more open, unbiased, and transparent with objective and realistic selection criteria to acquire the best equipment possible, and that it prioritize Canadian companies before opening the competition to other global competitors, especially for industries that are well-developed, competitive globally, and where Canada is a leader, such as the Canadian aerospace industry. I will continue to work closely with the secretary of state to ensure that we continue moving in the right direction. Perhaps the most important change is already under way. Under the Prime Minister’s leadership, we have seen a renewed sense of urgency and commitment to transforming how Canada approaches defence procurement. The Prime Minister has taken this issue seriously, demonstrating the political will necessary to challenge long-standing practices, strengthen accountability and drive meaningful reform. The real risk is not acting. The Auditor General has told us that delays have real operational consequences. The procurement ombud has put the average at 16 years. We cannot ask our forces to wait that long. Last year, Canada spent $65.9 billion on defence, 2.03% of GDP, exceeding the NATO target for the first time in decades, and we are on a path to 5% by 2035. Money alone does not defend a country. It has to be turned into ships, aircraft, vehicles and equipment, and it has to arrive while it still matters. For years, the House has heard that our procurement system is too slow, too fragmented and too cautious. The Auditor General has said so. The procurement ombud has said so. Witnesses before the national defence committee have said so and recommended changes in a report that the government has said helped shape this bill. Bill C-40 would give us one home for procurement, one accountable minister, dedicated expertise and oversight by Parliament. It would let us spend what we are committing to spend, and to spend it well. Our women and men in uniform have waited long enough. I urge all members to support Bill C-40 and to deliver the change they have been promised.

Emmanuella Lambropoulos, Saint-Laurent

Liberal
“Our Prime Minister has increased defence spending a lot over the last year and a half. This is the right path, and it is more than past governments have done. I support this spending.”
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Mr. Speaker, I think it is pretty clear that our Prime Minister has tried to make our spending increase dramatically over the last year and a half, and I think we are on the right course to be able to continue to do that. It speaks to a lot more than what governments have previously done. I truly appreciate the direction we have taken and the increase in spending in defence. I know we will continue to move in that direction.

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