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)

24 statements

Luc Berthold, Mégantic—L'Érable—Lotbinière

Conservative
“I do not support this bill. It creates a new government corporation instead of quickly getting our troops the equipment they need. Adding more bureaucracy will not fix delays or high costs. It also lets officials skip fair bidding for contracts, which could lead to favoritism and wasted public money.”
  • A repeated line

    “Canadians do not need more announcements.”

    Said 3 times by 3 members since June 1.

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Official Hansard

Madam Speaker, I will be sharing my time with my hon. colleague from Edmonton West. On behalf of the people of Mégantic—L’Érable—Lotbinière, let me begin by paying tribute to the four soldiers who lost their lives in the fire at Canadian Forces Base Wainwright, Alberta, on October 17. Sergeant Morgan Wong, Private Shaun Farrell, Private Aidan Goulding and Private Hayden Lykkemark each left behind a grieving family, loved ones, and brothers and sisters in arms. I offer my deepest condolences to those who are in mourning. Coming from a region that went through its own serious tragedy, I know from experience that such devastating events leave a lasting impact. I hope they can draw on their resilience to overcome this painful ordeal, both for themselves and for the families of the service members who lost their lives. They were simply there to train, to do their duty for their country. They wanted to have a good time training and doing what they loved. On behalf of my constituents, I would like to say that we owe them a debt of respect, gratitude and support. Let us imagine for a moment a Canadian soldier getting ready to deploy. He has completed his training, he knows his team and he knows why he wears the uniform. However, just as he is about to leave, one question remains: Will he have all the equipment he needs to carry out his mission safely? He might be leaving behind a family, loved ones, a partner, children or parents who are waiting for him to come home. These people trust our country to have the decency to provide the necessary equipment to those who are putting their lives on the line and risking their physical safety to protect us and protect others. However, after 10 years of Liberal rule, procurement delays are mounting, costs are rising and our military personnel are still waiting for essential equipment. It is in the context of the terrible conditions facing our military personnel that we are discussing Bill C-40, which supposedly seeks to reorganize military procurement in Canada. We expected concrete action, but what this old Liberal government is proposing yet again is to do what it has done best since it took office, that is, create a new structure. This time, it is a new Crown corporation. I do not think that a new organizational chart is what our military personnel need. What they need is equipment that is reliable, available and delivered on time. Where are the ships? Where are the jets? Where is the ammunition? These are the questions that our military members are asking. The Conservatives will always stand with the men and women who serve our country, now and in the future. We have to make sure that every dollar we spend is well spent, meets their needs and serves to protect our country or people, when we participate in support operations, for instance. That money is, of course, entrusted to the government by Canadians. As members are aware, families are having to make tough choices right now. In Quebec and elsewhere, the price of everything, like groceries, is going up. Canadians are careful about how much gas they put in their cars. Canadians have to calculate how much is left at the end of the month to pay the bills. Every penny counts. When spending goes up, families have to reconsider their priorities, and sometimes they have to forgo some larger purchases. I think that families expect the same level of discipline from their government. While families are stretching their money as far as it will go, the government in Ottawa keeps making more and more announcements and creating more and more bureaucracy. Not that long ago, in October 2025, the Liberal government established the Defence Investment Agency. It subsequently sought to modify the agency’s status through Bill C-31. Today, it is proposing yet another change, namely, transforming it into a Crown corporation. This is nothing short of a bureaucratic lasagna. When a problem arises, the government adds another administrative layer. When a new problem emerges, it adds another layer of red tape. When another new problem surfaces, it piles on a new layer of management. That is how it operates. That is the recipe for Liberal lasagna. Canadians do not need more announcements. Our armed forces do not need a new organizational chart. They just need equipment that works and enough ammunition to be able to do their job properly. In the real world, families and small businesses cannot just keep adding layers of paperwork to avoid paying their bills. At the end of the month, they have to pay. Unfortunately, from what we are hearing, people cannot afford to pay for their items at the grocery store checkout. There are too many stories of mothers having to take diapers out of their cart just to bring the total down. Why is the government giving itself permission to keep spending while families have to do without? What Liberal problems will this new organization actually solve? How much will this reorganization cost? While the Liberals are once again reorganizing their offices, our men and women in uniform are waiting. All of this leads to another problem. While they are waiting, another question arises. Why do we need to create a new corporation? Is it to take certain important decision-making powers away from the state, away from Parliament, so that money can be spent out of the public eye? No, of course not. The Liberals would surely never do something like that, and yet it seems that is exactly what is happening. Bill C-40 provides for 17 cases in which an unelected official may grant an exception so that a competitive procurement process does not have to be conducted. That is a lot. Some exceptions are likely necessary. However, when contracts can be awarded without any real competition, how do we prevent favouritism and the risk of corruption? As I said, we have every right to have doubts. Canadians have every right to have doubts. I am thinking about Brookfield and all the other situations where members of the Liberal club seem to enjoy the bounty of the Prime Minister’s generosity using Canadians’ money, which families will have to pay back sooner or later. The government is not doing the borrowing on its account. The government is borrowing on behalf of families. At the end of the day, Canadians are the ones who are going to pay for all this borrowing. It is not the government’s money. It is Canadians’ money, and Canadians have a right to know how it is being spent. I want to make that clear. It may be that, when it comes to defence and national security, direct procurement is required to meet urgent needs. Under Prime Minister Harper, this was used during the war in Afghanistan, for example. However, it does not mean that we should abandon accountability. It does not mean that the government can simply say that it needs such and such a thing and that we have to take it at its word. There needs to be accountability. It is a matter of trust. After more than 10 years of Liberal promises, Canadians expect more meaningful action. They expect jets, ships and ammunition, not just more Liberal announcements. What is more, the issue of transparency needs to be addressed. It goes well beyond Bill C-40. We have a clear example with the Saab GlobalEye aircraft. The government announced Saab as the preferred supplier for the airborne early warning system. Was the Royal Canadian Air Force consulted? Were its needs taken into consideration? The silence we are hearing right now is exactly the response we have received. We do not know. Canadians deserve answers. The F-35 file is another example of the consequences of the Liberals’ hesitation. The cost overruns of the F-35 program now total $8.7 billion. Behind these billions in cost overruns are workers, parents, and families trying to make ends meet. I can say that those families would know exactly what to do with that money. The Conservatives want to see major military procurement projects prioritized within the Privy Council Office, rather than the creation of additional administrative structures. When every decision is made, one consideration must remain paramount: the duty to protect Canadians, which is the very purpose for which the Canadian Armed Forces exist and are trained. When our soldiers receive training but are not provided with the equipment they need to carry out their missions, the government is putting itself in a difficult position and, unfortunately, sending military personnel into challenging situations. We will continue to advocate for and demand the equipment necessary to protect our country. Unfortunately, with the Liberals, it is always the same story: promises to do better, announcements of sweeping reforms, billions of dollars spent on bureaucracy and repeated demands that Canadians be patient and foot the bill without question. After 11 years of Liberal government, the Prime Minister is still talking about changing the structure. Eleven years of waiting is 11 years too long. No one goes to war with paper and pencils. No one defends peace by creating new offices, yet that is largely what the Liberals are offering our armed forces through Bill C‑40. We will examine this bill carefully to ensure that our armed forces receive the equipment they need and that decisions can be made in a timely manner.

Luc Berthold, Mégantic—L'Érable—Lotbinière

Conservative
“Crown corporations are not transparent. The government uses them to hide its spending and keep it off the official debt.”
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Official Hansard

Madam Speaker, is my colleague referring to the Liberal green fund? Is he referring to about the Canada Post Corporation? Are those really good examples of transparency and controlled spending subject to the scrutiny of Parliament? I respect my colleague’s comments concerning the poppy that we are wearing today. I also agree that the next few days will be filled with ceremonies, and I encourage all Canadians to participate in honour of the CFB Wainwright soldiers. It is a unique opportunity for the public to reconnect with our soldiers and our veterans. However, I cannot agree with the part of his intervention where he said Crown corporations are exceptionally effective in transparency. If he looked back over history a little, he would see that they are the best way for the government to fiddle the numbers and prevent its spending from being counted as government operating debt. That is not what we want here.

Luc Berthold, Mégantic—L'Érable—Lotbinière

Conservative
“The government is creating this new corporation to hide what it is doing. It wants to give millions of dollars to companies connected to its friends, just like it did with the green fund. I am worried about the company Brookfield having too much influence over the Prime Minister.”
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Official Hansard

Madam Speaker, my colleague sees right through this government’s decision to establish a Crown corporation. It is to avoid transparency. It is probably to enable the Liberals to give millions of dollars to organizations and companies linked to their Liberal cronies, as they did with the green fund. Who are the Liberal cronies in the queue these days, waiting for this Crown corporation to be established? I do not know. One thing I do know, however, is that over the past 18 months, one company in particular has been following the Liberal Prime Minister wherever he goes. That company is called Brookfield, and it sometimes even appears one step ahead of him, which worries us a great deal.

Alex Ruff, Bruce—Grey—Owen Sound

Conservative
“We need to fix how we buy military equipment, but this bill removes transparency and oversight. The government can already buy urgent gear when leaders step up. I want to know why the Liberals chose to avoid answering to Parliament.”
Official Hansard

Madam Speaker, I want to expand on the question the member from the Green Party asked, which really gets to the root of accountability and the lack of transparency that is being brought forward. As somebody who has spent decades in the military, I fully understand that we need to massively revamp our defence procurement system. However, the previous Harper government demonstrated that when we need to urgently sole-source something for operational needs, it is able to be done. What does it require? It requires leadership from the Prime Minister and the Minister of National Defence. In this case, the Liberals are trying to bring in a mechanism, and I am trying to understand why they would take away all this transparency, ministerial accountability, ultimately, and parliamentary oversight. I have no problem with Canada and the government’s spending billions of dollars for our military, but it needs to be reported back to the House. Can my hon. colleague explain why he thinks the Liberals are going down this path?

Luc Berthold, Mégantic—L'Érable—Lotbinière

Conservative
“The Liberal government does not want to be held accountable. Not a single minister answers to the public anymore.”
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Official Hansard

Madam Speaker, it is simple. It is because they do not want to be held accountable. There is not a single minister who is accountable to the public. Ministerial responsibility no longer means anything to the Liberal government or its ministers.

Kelly McCauley, Edmonton West

Conservative
“I oppose this bill. The government keeps messing up military purchases and is just creating more bureaucracy to cover it up. Politicians need to stop interfering and buy what our troops actually need at the best price for taxpayers.”
Official Hansard

Madam Speaker, I am pleased to rise to speak to Bill C-40, which is called by the government “strengthening Canada’s defence sector act”. It is really just another example of Liberal failure and incompetence being covered up by creating a new bureaucracy, but this time we would actually get two bureaucracies for the price of one. There has been Liberal failure after Liberal failure for defence procurement, so the Liberals tried to create an extra agency, the DIA, the Defence Investment Agency, to cover up those previous failures instead of addressing them. Now we would have another bureaucracy covering up for the DIA, covering up for the previous failures. There has been from the government a long string of failures for military procurement. There was the F-35, for which the original agreement was famously signed back in the Chrétien days. Then, of course, there was Trudeau saying that we were not going to buy it and then that we were going to maybe buy it. Now the government is saying that we have bought some but that it is going to review whether we are buying others, and that it is not really not sure what is going on. There is the handgun debacle. Apart from purchasing a knife for the military, which is probably the lowest of the low-tech weapons, it has taken the government over 10 years to come up with a proper procurement process, such as for a handgun. Even after 10 years, it bungled it so badly that the winning bidder ended up suing the government, which further delayed it. Funny enough, now the RCMP is actually procuring weapons. It started the process in 2015, when the government came to power, but the government still has not finalized its procurement process. One would think it would just simply piggyback on the same 9mm bought by the armed forces, but that is too easy for the government. There were the frigates, which were many tens of billions of dollars over budget. If we remember back to the beginning of the frigate process with the national shipbuilding program, part of the tenet was that there would be no federal infrastructure money. The shipyards building them would have to build their own shipyards with their own money. What happened? The Liberal-connected Irving came hat in hand to the Liberal government, demanding 400 million more dollars, or otherwise there would be more cost overruns and more delays on the frigates. Despite the national shipbuilding agreement saying there would be no federal infrastructure money, the Liberals quickly cut a cheque. One of my favourites is the fixed-wing search-and-rescue CC-295. It was purchased with political interference in 2015 from the first public works minister, Judy Foote, who put her finger on the scale to push it toward Airbus so there would be, as she stated, jobs created for PAL in her riding. This was a plane that was not properly certified yet to fly in Canada— An hon. member: It is. Kelly McCauley: Madam Speaker, it is not fully, and the member opposite knows that. The government spent billions on this plane, and there are still ongoing issues with it. There is also GlobalEye. This is the one the Prime Minister interfered on and personally chose, so he could put hand over heart and say that we are working with our European allies, elbows up, instead of picking something else. Instead of going to a proper procurement process, we have GlobalEye, which is like an AEW&C plane. What is the problem with it? It is meant for a small European theatre, perhaps not for a country that is, surprisingly, the second-largest country in the world. I guess the government forgot that. It has no inflight refuelling capabilities, does not have 360-degree viewing for its radar and does not meet the requirements as set out by the RCAF, yet the government interfered with the procurement process to pick a plane that is not suitable for Canada. What is going to be perhaps the largest procurement ever is submarines. I am hearing now, and the government is free to refute it, that there is a stoppage in negotiations because apparently the German sub does not meet Royal Canadian Navy requirements. The government made a big splash, saying that it was going to do this and bring in so many jobs. It does not seem to focus on delivering what is best for our armed forces at the lowest price. It seems to focus on what is best for photo ops. I want to get back to the CC-295 Kingfisher. This one was famous for its complexity in the RFP process, which was so bloated with the requirements set by the Liberals that there was a legendary viral photo of Airbus delivering its RFP. It had to rent a U-Haul. The RFP was 100,000 pages. For Leonardo, the competing bidder, it was 180,000 pages. Somehow, with an RFP so complicated, set by the government, that it required 180,000 pages, the Liberals missed advising Leonardo that there were some loopholes that they could put in on the bids that allowed Airbus, despite putting in a bid 25% more expensive, to win the deal. Leonardo sued. What did the government do instead of fixing its procurement process? It quietly gave Leonardo a sole-source contract, worth billions of dollars, for the CH-149 Cormorant. Airbus is happy. Leonardo is happy. Who is not happy? The taxpayers and the RCAF are not happy. The government so overmodified the Airbus plane to justify purchasing. It is overweight and underpowered. Regulations require it to maintain a certain altitude on one engine, but the Kingfisher cannot. The equipment that it added so threw off the centre of gravity that it had to add counterweights, which of course added to the weight issue. There are icing vulnerabilities and modifications that changed the slipstream. As it was, search and rescue techs jumping out of the plane would get dragged into the airstream, bounced along the plane and killed or injured. What is the Liberals’ solution to their political meddling and incompetence? They would create the Defence Investment Agency. They hire their friend Doug Guzman, friend of the Prime Minister, and give him $1 million a year. Despite his comfy role and $1 million a year, he threatens to quit because they cannot get past the sclerotic process of procurement inflicted on the process by Canadians. Therefore they bring out Bill C-40. Even before the DIA is birthed by royal assent through the BIA, they would basically be killing it, replacing it with Bill C-40. The Liberals make a mess, create a bureaucracy to fix the mess and then would create another bureaucracy to fix the bureaucracy that was to fix the original mess. It reminds me of an episode from Yes, Minister, the episode “Jobs for the Boys”. The government tries to hide and resolve the financial failure of a mismanaged project. Rather than admitting its mistake and fixing the mistake, it resolves it by establishing a quango. What is a quango? It is a quasi-autonomous non-governmental organization. Instead of Bill C-40, the government, I think, should have named the bill “C-quango”. The famous Sir Humphrey explains that a failing government can always be rescued by establishing a new independent board or agency that allows the government to hand out jobs to its allies, such as Mr. Guzman, while adding a new layer of officialdom to oversee the original disaster. Does this sound familiar? Yes, it does. I want to quote right from the episode. Bernard says, “Sir Humphrey, this is a bit of a cover-up, isn’t it?” Sir Humphrey answers, “Certainly not, Bernard. It’s a responsible discretion exercised in the national interest to prevent unnecessary disclosure of eminently justifiable procedures in which the untimely revelation could severely impair public confidence.” Once again, quite often it is The Simpsons that is foreseeing the future in politics, but here we have another example in Yes, Minister. We do not need a quango. We do not need a Bill C-40 to fix procurement. We do not need a Defence Investment Agency to fix procurement. What we do need is for the Liberal government to depoliticize procurement. We need it to get out of the way. My colleague from Bruce—Grey—Owen Sound commented that during the Afghan war, in which he served, we were able to purchase howitzers and other weapons quickly through sole-sourcing. It can be done, and it can be done right. The government needs to focus on the best equipment for our men and women in uniform, at the best price for taxpayers, not on what is best for its announcements and photo ops.

Kelly McCauley, Edmonton West

Conservative
“The government should not use Canada Post as a good example for how to manage defence spending. The president of Canada Post said political interference from the government blocked its plan for five years and costs it over $1 billion a year.”
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Official Hansard

Madam Speaker, I can only assume that the member opposite is playing out a scene from the Seinfeld episode “The Opposite”. He stands in this House and gives CBC as an example of openness and accountability, along with Canada Post. At the operations committee, we heard the president of Canada Post tell us at that for five years the government blocked the publication and implementation of its board’s strategic plan. The president stated publicly that the government’s political interference is a big reason that it is losing over $1 billion a year, yet the government wants to use the Canada Post business example as a reason to hand over the reins for defence spending. I think not.

James Bezan, Selkirk—Interlake—Eastman

Conservative
“The government is using Crown corporations to hide its deficits. Putting military spending into these corporations turns spending into assets, which does not protect taxpayers. What does my colleague think about this?”
Official Hansard

Madam Speaker, I want to thank my colleague from Edmonton West for his very strong intervention pointing out all the political interference we have witnessed already from the Liberals. My colleague is the chair of the government operations committee, or, as we like to call it, the mighty OGGO. He hears from the Parliamentary Budget Officer on a frequent basis. The Parliamentary Budget Officer, in the last week or so, was criticizing the government for its overuse of Crown corporations to hide its ongoing structural deficits by moving things underneath Crown corporations, especially the spending that is going to take place under National Defence. It is going to turn spending into assets, which does not protect taxpayers. I wonder if my colleague could comment on that.

Kelly McCauley, Edmonton West

Conservative
“The government says it is meeting its defence spending goals, but it is counting things like scientific studies and counting fish as defence spending. It should focus on buying the weapons and equipment our military actually needs.”
Official Hansard

Madam Speaker, yes, there were a lot of concerns expressed by the PBO with respect to transparency, the government’s ability to hide debt and other issues with Crown corporations. One of the other issues we heard about, which the member for Winnipeg North was going on about, is meeting the 2%. At committee, the Coast Guard came and told us that its money is now being counted as defence spending, even though it is for activities such as counting fish and scientific studies. This is the 2% the government is bragging about. Again, it needs to focus on procuring the weapons and equipment that our defence department and our men and women in uniform need, not playing that counting fish is a defence activity.

James Bezan, Selkirk—Interlake—Eastman

Conservative
“The government is using misleading accounting by counting civilian groups as defence spending. They count all Coast Guard money as defence, even though the Coast Guard is civilian and cannot fight in a conflict. They also moved Transport Canada planes to defence instead of buying the equipment we actually need.”
Official Hansard

Madam Speaker, I am pleased to get up again. The member for Edmonton West was talking about the ongoing creative accounting. The Coast Guard is a case in point. It is a civilian organization that does a great job at navigation research, icebreaking and policing our fishery, but it does not have any constabulary power at all. It told the defence committee that although 100% of its funding is now calculated under National Defence, it is only a civilian organization, and that if it runs into any threats of a hot conflict developing between Canada and an adversary, it would flee the situation. I would like my colleague to talk about the other creative accounting we are seeing from the Liberals, as with Transport Canada aircraft, that has been moved to National Defence, rather than them buying the kit we need to keep Canada safe.

Kelly McCauley, Edmonton West

Conservative
“We want the government to be open and accountable. We will help get our troops the right equipment, but the government has to do its part.”
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Official Hansard

Madam Speaker, my colleague from Manitoba said it all. What we want from the government is accountability and transparency. We will work with the government to serve our men and women in uniform and get them the right equipment, but the government has to do its part as well.

Fraser Tolmie, Moose Jaw—Lake Centre—Lanigan

Conservative
“Canada does not support veterans when it hands out military contracts. The United States gives a share of defence contracts to businesses owned by veterans. I want to know why the government is not recognizing veterans here.”
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Official Hansard

Madam Speaker, I would like to welcome my colleague to the veterans affairs committee. One of the things we hear in the veterans affairs committee is that there is a continual lack of recognition for veterans when military contracts go out. If we look south of the border, the U.S. has a procurement strategy of including 3% of small businesses owned by veterans, and in fact, that has actually been exceeded to 5%. We hear all these numbers being thrown around by the Liberals, but we are not hearing anything about veterans. We have seen sole-sourcing. Could the member expand a little on her thoughts about why veterans are not being recognized?

Fraser Tolmie, Moose Jaw—Lake Centre—Lanigan

Conservative
“The government has delayed buying needed military equipment for years, including fighter jets and submarines. I want to know if this bill is an admission that its defence policies have failed.”
Official Hansard

Madam Speaker, I have to say that I am somewhat disappointed with the answer I received earlier, but I will move on. The big question is, is this an admission of failure by the Liberal government to procure equipment? We have been waiting for years for F-35s. We have been waiting for submarine replacements. We are waiting on Snowbird replacements. We are waiting on continual equipment replacement by the Liberal government. It keeps dragging the puck, and all we hear are excuses. This seems to be another excuse. Is this another excuse, or is this an admission of failure on bad policy that the Liberals have had in place for over 10 years?

Fraser Tolmie, Moose Jaw—Lake Centre—Lanigan

Conservative
“Past Liberal policy made Canada rely on foreign countries for military equipment. The Conservatives invested in F-35 fighter jets, which helped Canadian small businesses. Now the Liberals are delaying that project. I want the member to tell us which side of this issue he supports.”
Official Hansard

Madam Speaker, I consider my colleague from Labrador a friend. I would just like to ask him a few things about his intervention. Under the Chrétien government, the Liberals came out with a defence white paper. It was about buying off-the-shelf technology, and that was, basically, relying on foreign countries for equipment. I heard my colleague say that put us in a bad situation, and we are reliant on foreign nations. Under a Conservative government, we invested on the ground floor of the F-35s, which included small businesses in Canada being able to gain from the contracts. Now the Liberals are dragging the puck on that. What side of the fence is my colleague on? If I get two Liberals in the same room, they are arguing between each other, and at some point one of them is going to win. Which one is going to win?

Fraser Tolmie, Moose Jaw—Lake Centre—Lanigan

Conservative
“I do not want this bill to pass. It creates a new corporation that lets a minister spend billions of dollars on military gear without enough oversight from Parliament. We need to buy military equipment faster, but we should fix our current system instead of making a new bureaucracy. This bill also fails to include targets to hire veterans or use veteran-owned businesses.”
Official Hansard

Madam Speaker, I will be splitting my time with the member for Bruce—Grey—Owen Sound. I rise today to speak to Bill C-40, the strengthening Canada’s defence sector act. When this debate opened, the Secretary of State for Defence Procurement read the House a long list of what the Defence Investment Agency has achieved. Then he said something that I agree with completely: Some were contracts, some were preferred suppliers and some were arrangements, and we should not confuse them. He is right, so let us not. A preferred supplier is not a contract. A contract is not a delivery. Let me be clear about where Conservatives stand. Procurement in this country is too slow. Our men and women in uniform have waited too long for the equipment they needed yesterday. Going faster is the right goal. We do not object to going faster. We object to going faster with nobody watching. We know it can be done. During the war in Afghanistan, a Conservative government bought C-17s, Chinooks and new Hercules quickly using the urgent operational and national security exceptions that already existed. That speed came from political leadership. It did not require handing unchecked power to one person. This is the third version of this agency in a year. It started inside Public Services and Procurement Canada. Six months later, the government buried a plan to make it a stand-alone entity in an omnibus budget bill. Before that plan has even passed, it wants a Crown corporation instead. That is three structures in one year. How is that for Liberals making themselves look busy while accomplishing nothing? There is no shortage of decisions, and how they were made tells us exactly what this bill would make routine. Let us take the fighter trainer as an example. Since March 2024, the Royal Canadian Air Force has not had a lead-in fighter trainer. The Hawks are gone. The 419 squadron is on hiatus, and our future fighter pilots are being trained in Italy, Texas and other locations around the globe. How did the government pick a replacement? It was not through an open competition. The Prime Minister launched negotiations for the Italian M-346 with Prime Minister Meloni on the sidelines of the G7, even though Canada had received proposals from American and South Korean manufacturers. It may well be a fine aircraft, but a leader-to-leader handshake is not a procurement process. Under Bill C-40, a government-to-government deal would be one of 17 ways a minister could skip competition entirely. Then there is GlobalEye. The government named Saab’s GlobalEye as its preferred airborne early warning aircraft at CANSEC in May. It is a capability that our air force badly needs, but according to reports, the decision came as a shock to the RCAF itself and to other manufacturers ready to bid on the contract. Saab did not meet with National Defence or the air force about operational requirements until weeks after the announcement. The technical assessment that followed found real shortfalls: limited radar coverage, no air-to-air refuelling capability and incompatibility with NORAD’s secure data network. That is why Conservatives have asked the Auditor General and the Parliamentary Budget Officer to investigate. If this is how decisions get made while Parliament still has some oversight, imagine how they will be under the bill that would remove it. This bill would create a Crown corporation that we are told would operate at arm’s length, but the minister can direct it to do or not do any procurement activity, and the bill says it must comply. Ministers keep the control. The House loses the line of sight. We have seen what happens when public money flows through a body the House cannot see into. The green slush fund handed out public money with too little oversight. Bill C-40 would build that same kind of body and hand it $1 billion at a time. Plainly, this bill would hand a new associate minister oligarchic powers to direct a corporation with a billion-dollar fund, to have it lend money and buy shares in companies, and to do it all while the House is kept at arm’s length. This is not reform. This is concentration. The secretary of state defended clause 9 by calling it an “unambiguous tie to the government”. That is exactly the point. This is not at arm’s length. It is a minister’s hand on a billion-dollar fund. The government is promising a once-in-a-generation build-out-of-Canada defence economy, so let me ask a simple question: Who is better prepared to build, maintain and sustain military equipment than the people who use it? They are mechanics, technicians, logisticians, pilots and project managers who have run operations under conditions that most private sector managers will never see. On the veterans affairs committee, we hear in study after study that veterans’ skills are not recognized and that the government has no measurable targets, and there is nothing in the bill and nothing in this strategy to change that. There is no target for veteran-owned businesses and no credit in contract evaluation for hiring veterans. There is nothing. Let us look south. In the United States, Congress set a statutory goal that 3% of federal contracting dollars would go to small businesses owned by service-disabled veterans. In fiscal year 2023, American agencies did not just meet that goal; they beat it, awarding more than 5%, or nearly $32 billion U.S. We do not have to look south to know targets work. The secretary of state told the House that defence procurement met the government’s 5% indigenous procurement target last year. That is good. It proves that a target can be set, measured and met in Canadian defence procurement, so why is there no target for veterans? Conservatives want our armed forces equipped faster. We just want it done in the open and done for the people who served. That means having a minister who answers to Parliament. The bill says, “The Corporation must do as the Minister directs”, which is wording we would not find in any other law in Canada. Direction should come from cabinet on the record, not from one minister’s say-so. It means using the tools the system already has. We did it in Afghanistan. That is why Conservatives have called for a dedicated secretariat in the Privy Council so defence contracts get cabinet’s priority. Speed comes from political will, not from new Crown corporations. Conservatives would cut the process, not cut Parliament out. After a decade of Liberal neglect, our sailors, soldiers and aviators do not need a new bureaucracy or a minister with a new title. They need a procurement process that equips them for the modern threats we face. I am concerned that Bill C-40 would remove the parliamentary oversight that this agency badly needs and would open the door to waste and mismanagement. We have seen where this leads. The greens slush fund was an arm’s-length body handing out public money. Bill C-40 would be the same kind of body. That is why Conservatives have concerns and will be seeking clarity at committee. I would be remiss not to spend my last minute of this speech recognizing those who served with the Snowbirds. I was at their last air show in Moose Jaw, something that obviously I was proud to witness and that inspired not only me but Canadians across this nation, but something that was very disappointing. It is another example of a procurement boondoggle on the Liberal side, as we do not have an aircraft to replace the Snowbirds, to transition from one to the other and to continue having a team that shows the professionalism of our Canadian military. I look forward to the questions and comments that will come from my colleagues from both my side and the other side.

Fraser Tolmie, Moose Jaw—Lake Centre—Lanigan

Conservative
“The government is far too slow at buying military equipment. After 11 years, we have only received two F-35 fighter jets, and the helicopters are delayed too. Nobody believes the government can fix this.”
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Official Hansard

Madam Speaker, I feel like I am at Yuk Yucks. Honestly, on efficiency for the F-35, we have two that have been delivered after 11 years of the Liberal government, and it is not the first time it has done this. There are the Cormorant helicopters. It is unbelievable. Time after time after time, we are always waiting for equipment from the Liberal government. Is this an admission of it having bad policy previously and that it cannot get its act together? Is it trying to create some new way to expedite? Nobody believes the Liberals.

Tako Van Popta, Langley Township—Fraser Heights

Conservative
“I do not support this bill. It just creates more government bureaucracy for photo ops and announcements instead of getting real work done.”
Official Hansard

Madam Speaker, my colleague’s speech was very enlightening. We are talking about Bill C-40, the proposed strengthening Canada’s defence sector act, which would create yet another bureaucracy for the federal government to use as a vehicle for announcements, reannouncements and photo ops. I think of Build Canada Homes, which was going to build houses at a generational scale, and in the meantime, housing starts are down and nowhere near the 500,000 for replacement to bring back housing affordability. How would this bureaucracy be any different?

Fraser Tolmie, Moose Jaw—Lake Centre—Lanigan

Conservative
“The government makes announcements but does not deliver real results for housing, pipelines, or the military. We waited 10 years for new fighter jets and only got two. Troops do not have the equipment they need, and this is why military recruitment is down.”
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Madam Speaker, the short answer is that it would not. When we look at the past record of how the Liberals have been operating in government, it is just boondoggle after boondoggle. Whether it is housing, the military or building pipelines, we have not seen anything. All we hear is the Prime Minister or ministers at the podium making announcements upon announcements. We have not seen anything. It is not tangible. It takes forever for the Liberals to come up with something. Canadians are so tired of waiting. We have been waiting 10 years for the F-35 fighter aircraft that we desperately need. We had two delivered just recently and the Liberals think they have a win. This is just another example of why recruitment is down in the military and why we cannot get people in. We are not setting goals or standards and giving people something to strive for. We are not making them feel good that they are being looked after, that when they are being deployed to Latvia, they have the equipment they need or that they are not using used equipment or washed equipment from a weekend so that reservists can do weekend deployment.

Fraser Tolmie, Moose Jaw—Lake Centre—Lanigan

Conservative
“More people are dropping out of the military. New recruits are joining without understanding what they are getting into. The government is not telling the full truth about what is happening with military recruitment.”
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Madam Speaker, I will be straightforward: There are more people washing out in the military. They are being thrown into recruitment centres and being told that they are going to become soldiers, sailors and infantry, and they do not even know. They just show up. I have talked to friends who are in the military, and they are asking, “What are these people doing here?” They do not even know what they are doing here. Do not tell me that recruitment is up when the full spectrum of what is going on in the military is not being given.

Alex Ruff, Bruce—Grey—Owen Sound

Conservative
“Canada needs to fix how it buys military equipment, but this bill lets the government spend hundreds of billions of dollars without proper oversight from Parliament. Ministers must come to committee and explain how they will keep this spending open and accountable to Canadians.”
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Official Hansard

Mr. Speaker, I am here today to speak to Bill C-40, strengthening Canada’s defence sector act. This enactment contains measures relating to production, procurement and investment with respect to national defence and national security. Part 1 deals with establishing the Canadian corporation for defence investment and part 2 would amend the Defence Production Act to, among other things: (a) extend the application of that Act to supplies and projects related to national security and to services related to national defence and national security; (b) provide that the Minister of Public Works and Government Services has the authority to acquire supplies and services related to national defence and national security... [with some] exceptions; (c) extend the purposes for which that Minister may engage in stockpiling to include national defence and national security, including economic security, and the defence and security of an associated government or other state; (d) provide that Minister with new financial authorities...; and (e) establish procurement rules..... Then part 3 gets into providing the necessary review of said acts. Everything I just said was extracted from the legislation itself. What does this mean in plain speak? Bill C-40 would establish a Canadian corporation for defence investment, a Crown corporation run by a CEO and a board of directors under the authority of the associate minister of defence for procurement. The extent that Treasury Board’s rules, however, would apply to this corporation have not been established. It is not part of the bill itself, but it is expected to be substantially less than before the defence investment act is enacted. The Defence Production Act would be renamed and amended to permit the minister to procure everything or anything that could have a national defence or security use. It would also allow the corporation to exercise powers under sections 15 and 16 of the newly named defence and national security production and procurement act, which would deal with the stockpiling, procurement and disposal of military equipment. Bill C-40 would also massively expand the number of categories under which the minister could carry out a sole-sourced procurement, 17 in total should this bill pass, and by virtue of that, decline to run a competition and would also allow any number of future exceptions to be written into regulation, not backed through legislation. It would also allow the minister to exclude anyone on national security grounds from a competition, and here is what I take issue with, without justification, oversight or explanation to Canada and to Parliament. Before I get into some of the other reasons that I think it is important that we revisit and revamp our procurement process, I am shocked that we are debating today under the threat of time allocation. To be fair, the government has not moved it, but a Liberal stood on Friday and threatened to move time allocation on a bill that is going to allow the government to spend literally hundreds of billions of dollars going forward and, at the same time, remove parliamentary oversight. I find it fascinating that we are on the second day of debate, not even through the first five hours of debate, and we are already under a threat of time allocation. I will provide a bit of my own background. I spent 25 years in the military, but 24 years ago I had the privilege of attending, on the army side, the land force technical staff program, a year-long course where I did nothing besides study defence management as it relates to the army here in Canada and how we procure equipment. I was shocked, to say the least, after learning the technical expertise, some of the skill sets associated with it and a lot of science and engineering type stuff too, how messed up our procurement system has been for decades. That is why I am all about seeing necessary changes to the way we procure equipment for our members of the Canadian Armed Forces. I want to give another specific example. After I did that course, I had the privilege of being posted at the infantry school in Gagetown. I had this weird title. I was the infantry corps technical adjutant. It was basically my job to read every statement of requirement for every piece of equipment that the army was procuring that could impact the Canadian Armed Forces and, specifically, the Canadian infantry. I remember having a debate and argument with the project director in Ottawa at the time around the purchase of our STANO equipment, our surveillance, target acquisition and night observation gear, specifically our monocular night vision goggles. We were doing something back then called whole fleet management. This was back under the Chrétien Liberal government at the time. I said this was not going to work, that we could not have equipment being procured for individual soldiers and expect to have it serviceable and ready when we need it, when we deploy on operations or to war. This was obviously post-9/11. We had troops in Afghanistan, but had not committed to the fight yet. I was shocked and I had something to say when I called up that project director in spring 2006, because now I am the priority of the Canadian Army, deploying to Afghanistan on combat operations, and I do not even have enough monocular night vision goggles or enough equipment to train in night fighting before we are going out the door and going to war. It was just very frustrating. If we fast-forward a bit, however, we see that we can do this right. The previous Harper Conservative government demonstrated during Afghanistan the ability to make massive procurements. They were to the tune of billions of dollars through a sole-source process. We got Chinook helicopters. We repurchased tanks. We got strategic airlift capabilities with the C-17s. There are many more examples I could provide. It can be done, but it requires leadership and political will. A previous speaker from my side of the House highlighted this. It is about political will. Accountability, transparency and parliamentary oversight are needed. This is what my concerns now relate to. Under the Liberal government, over the last 11 years, a number of defence procurement processes have been messed up. In previous speeches, we heard about the GlobalEye. Again, it was purchased before any substantial discussions with the Royal Canadian Air Force. There are still concerns about the operational capabilities of this platform to work in the north, in our Arctic. Let us talk about the F-35. The member for Winnipeg North got up earlier and said they are a great thing. I will remind everyone that the member ran under the Liberal government in 2015 when it said it was going to get rid of the F-35 and that there was no way it was going to purchase the F-35, which is completely contrary to procurement, government rules and the whole competition process. It is good to finally see those F-35s being delivered. The Liberals announced the Defence Investment Agency. It was announced during the Budget Implementation Act earlier and now through this new piece of legislation, Bill C-40. What may be part of the catalyst for this legislation is that the DIA’s own CEO reportedly wanted to resign. He has been so frustrated by the slow pace of government bureaucracy and lack of the current Liberal government making things happen. What is the government’s answer? It is to take away accountability and oversight. That is where my concerns lie. We are talking about hundreds of billions of Canadian taxpayer dollars being used without being transparent or having proper parliamentary oversight. The Liberals have stood up and are claiming that the accountability is going to occur through the new associate minister of national defence. However, at the same time, we do not see anything within the clauses of the bill itself that would provide mechanisms for that oversight and transparency. In principle, I absolutely support a massive rework of Canada’s defence procurement system. However, as I laid out in my speech, Canada can procure and has procured massive military procurement in the past. How was that done? As I said, it was done through leadership. It was done through leadership by the Prime Minister and the Minister of National Defence, by pushing things through, by making the claim to the Canadian taxpayer publicly and by reporting back to this chamber the necessary mechanisms so that the billions of dollars are going out for the right reasons and not just to Liberal insiders. It can be done. I am going to be listening intently. I am confident in stating that this bill will get to committee. I am looking forward to the testimony of the Secretary of State for Defence Procurement, the Minister of National Defence and the minister of procurement services. I am looking forward to them showing up and explaining how they are going to make sure that they are accountable and transparent to Canadian taxpayers and how they will make sure that members of the Canadian Armed Forces are equipped with the necessary equipment and systems they need to defend this nation.

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