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)

52 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.

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

Liberal
“We should honour our soldiers and their sacrifices. History shows that independent corporations can be very open, accountable, and efficient. I want the member to agree that creating this corporation is the best way to get our military the equipment it needs.”
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Official Hansard

Madam Speaker, first, I would recognize that members of Parliament are wearing a poppy as a form of respect and tribute to members of our forces who have served in the past and are serving in present, and the sacrifices that have been made. I do believe, as the member referenced, that Wainwright will in fact be in the minds and hearts of many, along with our prayers for the victims. My question is with regard to the corporation that would be established. An arm’s-length corporation, I would ultimately argue, has been demonstrated in the past through many different administrations of corporations, whether at the provincial level or federal level, to be exceptionally effective in transparency, accountability and efficiencies. I am wondering if the member would recognize that corporations can, if done properly through legislation, be the best way to ensure that our men and women are best served with the necessary equipment into the future.

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.

Elizabeth May, Saanich—Gulf Islands

Green
“I want to know why the government wants to create new corporations that ministers are not accountable for. There should be a clear line of accountability to the minister and cabinet, but this kind of corporation does not have to answer to the government.”
Official Hansard

Madam Speaker, I would like to ask a fundamental question. In my colleague’s opinion, why would this government rather set up new corporations with less accountability to the minister? There should be a line of accountability going all the way up to the minister and cabinet, but this type of corporation is not accountable to the government.

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

Linked statement

“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.

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

Liberal
“Government-owned corporations work well and can be held accountable, just like the Bank of Canada or provincial power companies. Our Prime Minister has also raised military spending to 2% of our economy, which is twice as much as Stephen Harper ever did.”
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Official Hansard

Madam Speaker, I was at a press conference a few years back where we announced that the Hercules aircraft, through 435 squadron, was going to be replaced by the Kingfisher. The Kingfisher is going to be operational later this year for search and rescue. I am very much familiar with it because that is the branch I used to serve for when I was in the Canadian Forces, search and rescue, which was then based out of Edmonton and is now based out of the city of Winnipeg. At the end of the day, when we think of the Bank of Canada, the CBC and the post office, these are Crown corporations with a high sense of accountability. If we think of provincial Crown corporations, whether it is Manitoba Hydro, Hydro-Québec or autopac, they have proven to be very effective. We have a Prime Minister who has now raised our GDP military spending to 2%, higher than Stephen Harper ever even dreamed about. I think Stephen Harper one year raised it to 1%. Does the member not see that accountability can be held through Crown corporations?

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.

Sophie Chatel, Parliamentary Secretary to the Minister of Veterans Affairs and Associate Minister of National Defence

Liberal
“I support this bill. It cuts red tape so the military can buy equipment faster. Buying equipment takes too long right now, which hurts Canadian businesses and stops defence spending from creating local jobs.”
Official Hansard

Madam Speaker, I will be sharing my time with the member for Labrador. This is my first opportunity to speak in the House since the tragedy at Canadian Forces Base Wainwright, so I want to begin by offering my deepest condolences to the families and loved ones of those who tragically died in this tragedy. My thoughts are also with those who were injured, their families and the entire community as they grieve and support one another through this difficult time. I rise today to give my full support to Bill C-30, which will transform the way Canada procures military equipment, invests in defence and, above all, builds its domestic defence industry. The Defence Investment Agency was created in October 2025 to speed up military procurement, but transforming it into a Crown corporation could reduce bureaucracy. I will come back to this later, but companies seeking defence contracts face significant challenges. The government has invested billions of dollars in defence, and that is very good. We want to meet NATO’s targets, but we also need to ensure that these investments benefit Canadian businesses and workers. The agency was originally established to modernize defence procurement. That was a very good first step, but it did not go far enough. Bill C-40 will finally give the agency the authority and independence it needs to accelerate the contract awarding process, reduce red tape and better coordinate government efforts. This is very important for accelerating and facilitating SMEs’ access to the defence market. This is a very practical response to the concerns that businesses have shared with us. It is also a way to quickly turn our defence investments into quality jobs for Canadians, innovation, and economic spinoffs at a time when we really need them. I want to focus specifically on the aerospace industry in Quebec and Canada, especially because Quebec’s aerospace industry is a major asset. This summer, I had the pleasure of organizing a round table that brought together both large corporations and SMEs from Quebec’s aerospace and defence industry. Bombardier was there, but so were many other innovative SMEs. In Quebec, we have outstanding expertise, world-class businesses and a network of specialized companies that contribute to our ability to innovate in Canada and around the world in the aerospace industry. During this round table with businesses, one very clear message emerged. One of the biggest obstacles to their growth and ability to secure contracts is the slow, bureaucratic pace of the defence procurement process. Their representatives explained to me that the historic investments we have announced for the defence sector are not automatically translating into jobs and economic spinoffs, because it takes so long to get contracts signed. These contracts are essential if businesses are to invest, hire staff and engage with other suppliers. For example, if Bombardier wins a defence contract, the entire chain of SMEs in Quebec and Canada stands to benefit as a result. The participants also pointed out that SMEs often struggle to access defence tenders, even if the government has already awarded them contracts and their technology is well known. In short, it takes a very long time for contracts to be awarded. Not only do we need to invest in defence, but we also need to ensure that our investments translate quickly into contracts, innovation and well-paying jobs for Canadians. Transforming the Defence Investment Agency is very important for doing that. Not only are we streamlining the processes, but another very aspect is that we are bringing together expertise within the agency to speed up procurement. If we do the right thing with this bill, we will finally be able to respond directly to the main concern expressed by the industry. Our aim is not just to spend more on defence, but to transform these investments into strong, lasting Canadian industrial capabilities that benefit our businesses and our workers, while ensuring the sovereignty of our amazing country. The agency’s core mandate is to combine and build on existing defence procurement expertise within government through a single organization focused on a very specific objective. Rather than duplicate the use of resources, it pools operational knowledge and expertise on procurement contracts in one place. As I said, one of the concerns that was mentioned during the round table was that companies have to explain their expertise or technology to one agency and then turn around and explain it again to another, even after receiving approval. They often have to repeat things twice. Now, everything will come together in a single agency. The agency’s transformation reflects our government’s commitment to build a strong, secure and sovereign Canada. With more autonomy and stronger contractual authority, the agency will finally be able to ease its administrative burden and improve its efficiency and speed, because these investments are needed now. This will strengthen our country’s ability to defend itself while providing more accountability. In February 2026, the unveiling of the first-ever defence industrial strategy marked a key step in modernizing our procurement system. The strategy already called for a whole-of-government approach aimed at strengthening our defence industrial base. We are now seeing the results of this strategy, since we have finally met the NATO defence spending target of 2% of our GDP. We have also reaffirmed our commitment to meeting the NATO target of investing 5% of GDP by 2035. The agency will obviously play a key role in meeting those targets. We are at a hinge moment. Global uncertainty, supply chain disruptions and evolving security challenges have made one thing very clear: Protecting Canadians and safeguarding our sovereignty, our economy and our military capability is what will give us industrial and military strength. Our investments in defence are also a powerful driver of growth for our economy and our innovative sectors. Let us consider just a few examples. Drone technology was developed for defence, but it can also be used in agriculture. Military aerospace innovations benefit the entire aerospace industry. The same is true for shipbuilding and satellites. There is a great company in the Outaouais region, Telesat, that builds satellites. That also benefits AI and cybersecurity. All of these examples show that by working with an effective agency, we will be able to build a strong and sovereign Canada.

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?

Sophie Chatel, Parliamentary Secretary to the Minister of Veterans Affairs and Associate Minister of National Defence

Liberal
“Our committee is studying how to help veterans use their military tech skills in civilian jobs. Many leave the forces young and want good new careers. I want all members to support this work.”
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Official Hansard

Madam Speaker, one thing we are studying at the Standing Committee on Veterans Affairs right now, which is very important for our veterans, is how to recognize the amazing skills they acquired in the forces. The forces now include drones, as I mentioned, cybersecurity, AI, all of those technologies that are so important to the defence sector. When they retire from the forces, they are sometimes as young as 34, and they want a rewarding career after the forces. They want to feel that they are contributing to the service of their country that they love. Our job, and I invite all members to support me, is to help them recognize the skills they acquired in dual-use technology and how they can translate those into civilian jobs so that we can build very rewarding careers for all of our veterans.

Rhéal Éloi Fortin, Rivière-du-Nord

Bloc Québécois
“Many veterans leave the military and end up with no job, no support, and no recognition. I looked at this bill, and I do not see how it fixes this. I want the member to explain how it will help veterans return to normal life.”
Official Hansard

Madam Speaker, I would like my colleague to explain in greater detail how this bill will help veterans of the Canadian Armed Forces successfully transition to civilian life. I agree with her. I have seen cases like this in my constituency. Many individuals leave the armed forces for a variety of reasons, only to find themselves with nothing. They have no job, no social network and no recognition for their service. I have studied Bill C-40, but I am not sure I can see any concrete improvements in it. In her view, how will Bill C-40 help these people?

Sophie Chatel, Parliamentary Secretary to the Minister of Veterans Affairs and Associate Minister of National Defence

Liberal
“Aerospace companies in Quebec need thousands of workers, but our schools cannot train enough people. Veterans have the right skills. We are working to make it easier for veterans to get their military training recognized so they can fill these jobs.”
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Official Hansard

Madam Speaker, I hope my colleague will agree that aerospace is one of the flagship sectors of Quebec’s economy. I have spoken with companies in the sector, and one Quebec-based SME told me that it could hire 300 people tomorrow morning, but our educational institutions are not currently able to train enough workers to meet the demand for these highly rewarding careers. We have veterans who have acquired these skills, this expertise, and who are simply waiting for those qualifications to be recognized. We are currently working with certain educational institutions to accelerate the recognition of skills acquired in the Canadian Armed Forces so that veterans can step in to fill labour shortages. The aerospace sector alone will need 65,000 new workers over the next 10 years. These are technical trades. Our role is to recognize veterans’ expertise and translate it into a certification that allows them to practise a Red Seal trade and pursue a meaningful career involving a wide range of technologies.

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?

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