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)

44 statements

Jean-Denis Garon, Mirabel

Bloc Québécois
“I do not support this bill. No other NATO or Five Eyes country uses a state-owned corporation to buy defence equipment. Canadian businesses do not even want these government contracts, and politicians will still control the process. The government needs to explain why they are pushing this bill.”
Official Hansard

Mr. Speaker, today we are discussing Bill C‑40, a procurement process that will be demolished by Bill C‑31, which will be passed because it is a budget bill, a confidence vote. Earlier today, the Standing Committee on Finance heard from the Secretary of State for Defence Procurement. I asked him why a new Crown corporation was needed for procurement, which runs counter to Bill C‑40. He replied that our companies do not want government contracts, but rather commercial ones. However, none of the Five Eyes countries or any other NATO member has a Crown corporation, or a state-owned enterprise, that handles procurement. That is evident from the fact that politicians will continue to control the procurement process. I would like my colleague to tell me why she is selling us this bill that Canadian businesses want nothing to do with. That is what the secretary of state said this morning.

Jenna Sudds, Parliamentary Secretary to the Minister of Government Transformation, Public Works and Procurement and to the Secretary of State (Defence Procurement)

Liberal
“This new agency will make better business deals and manage contracts more easily. It will put military buying and investing under one roof.”
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Official Hansard

Mr. Speaker, I think the questions are as follows: Why create a Crown corporation? Why was the decision made to do that now? The answer is that the goal is actually the opposite. I think the agency would have greater flexibility to negotiate and manage contracts using business practices better suited to the industry. It will also bring procurement and strategic investments under a single mandate.

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

Liberal
“Crown corporations have a long history of success. They work independently from the government, which makes them open and accountable. I want my colleague to speak about how this bill will make things more efficient, open, and accountable.”
Official Hansard

Mr. Speaker, I am a little confused about the motivation of the Conservative Party, along with the Bloc, and why they would oppose corporations. In fact, Crown corporations have a huge history of success, whether it is municipal, provincial or federal. It is a way to ensure more transparency and more accountability, and to have something be at arm’s length of government. These are all positive things we have witnessed for generations, at both the provincial and the national level, yet we have the Conservatives and the Bloc now saying that they do not support it. I am wondering if my colleague could provide her thoughts not only on how it would make it more efficient, but on the fact that there is a high level of accountability and transparency with Crown corporations.

Jenna Sudds, Parliamentary Secretary to the Minister of Government Transformation, Public Works and Procurement and to the Secretary of State (Defence Procurement)

Liberal
“Creating a new defence agency as a Crown corporation will help it move faster. This will let the government buy new technology as quickly as private businesses do, so our military gets what it needs.”
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Official Hansard

Mr. Speaker, as I shared with the last question, the decision to move forward with a Crown corporation for the new Defence Investment Agency would enable the agency to move more quickly and give it the ability to meet the pace of industry. As someone who represents a riding with many companies in both defence and dual-use technologies, a comment I hear often is that it is a challenge for the government to keep pace. Here is the government in action, doing just that. The ability to move more quickly, at the speed of commercial contracting, to ensure that the Canadian Armed Forces has the cutting-edge solutions that it truly needs and is looking to acquire is really an opportunity. I am proud of the work of our government in moving forward with this legislation.

Richard Bragdon, Tobique—Mactaquac

Conservative
“Our military needs the best equipment and supplies, and we support spending more money on defense. But the government must put real rules in place so this money buys actual equipment instead of being lost to bureaucracy. The government also cannot claim it is boosting defense when it plans to cut the military's operating budget by 10%.”
Official Hansard

Mr. Speaker, I want to thank my colleague across the way for sharing her time. It is an honour to rise in the people’s house once again, to speak in regard to Bill C-40. I would like to commence my remarks by recognizing and giving honour to those to whom honour is due. Our hearts, thoughts and prayers go out to the members of the Canadian Armed Forces and their families who have been affected and devastated by the tragedy that has taken place at CFB Wainwright. I want to offer, to them and the Canadian Armed Forces from coast to coast to coast, our thoughts, prayers and sympathies to the families that have been affected and are going through loss at this time. Upon further reflection in regard to that, thinking of our brave men and women in uniform, past and present, and as we approach Remembrance Day coming up, it would only be correct for me to once again recognize that we owe a debt of gratitude that can never be repaid to those who paid the ultimate price, and to their families, who suffer so much along with them, providing such tremendous support and hope to Canadians. We are enjoying freedoms because they paid the price, they made sacrifices and their loved ones allowed them to serve. They have served in so many ways that we cannot begin to adequately express. On behalf of a grateful nation and on behalf of the good people of Tobique—Mactaquac, we thank all of them for their service and sacrifice. We give honour to them today. We recognize that the Canadian Armed Forces deserve the best of the best, and they deserve our best. They have an expectation of government, and rightly so, that if they are going to make sacrifices and go to serve a cause greater than themselves, they need the best equipment and supplies and the weaponry that they need to do combat in the 21st century. Part of that is making sure that we give them all the tools that they need to succeed. While I was thinking about this, I was reflecting upon how many times our brave men and women have punched above their weight in service to our country. The Canadian Armed Forces have done incredible feats throughout history. Whether it was at Vimy Ridge, where heroism was on full display; at Juno Beach when our troops, our brave young soldiers, stormed the beaches; the liberation of the Netherlands in the Second World War; the Korean War; those who served valiantly and bravely in the Persian Gulf War, or those who served more recently in Afghanistan and throughout various peacekeeping missions around the world, one thing that is clear is that their service, abilities and capabilities as fighting men and women are quite unparalleled in any other fighting force around the world. They are to be commended. They have always punched above their weight. To this day, they continue to excel and give their utmost in service to our country. That is why it is so important to get this type of bill right. That is why, when we invest in our brave men and women, we want to make sure we do it right, with the level of investment that it requires and deserves, but also with integrity around that investment to ensure that it is done properly and in the way it should be done. Too many times, we have gotten the defence spending aspect wrong in this country. It has not been the priority it should have been. This goes back throughout our history. Our brave men and women deserve much more. The government has committed to spending more on national defence, which we in the official opposition support. It is important that we make sure the safeguards are put in place, so that the money being pledged, and the spending that is going to happen, actually gets to the brave men and women who are wearing the uniform. It must get to the right equipment at the right time, expeditiously, and not be siphoned off through reams of more layers of bureaucracy, or be unaccounted for or not answerable to those who represent the people of Canada, namely the Parliament of Canada. Proper oversight and proper safeguards should be put in place. By doing that, we would be giving honour to the Canadian taxpayer, but also to the brave men and women who serve in our forces. The Canadian Armed Forces need equipment. They need it delivered. They need it on time, but they do not need another layer of bureaucracy. The Canadian Coast Guard, for example, most recently has been allocated under National Defence. Recently, at the government operations committee, I asked the defence officials who were representing it there whether the Coast Guard was still more or less a civilian operation or if it was being militarized. Are the ships being equipped with defences? Are they doing defence exercises? Are they being prepared and equipped, if they are part of National Defence, and is the spending that has been allocated under the Canadian Coast Guard for years now being attributed toward NATO required spending? I asked simply, in that committee, whether they are being equipped. The answer was that no, there are no defence mechanisms being put on the vessels. They said at that time that they were still continuing to do fish-counting operations and surveillance on the waters for fish, civilian and operational purposes, but really there was not a whole lot that would fall under the mandate of Canadian National Defence. As such, Canadians do rightly have questions, when we say we spent this much more under National Defence, whether it really is going to National Defence and equipment upgrades or it is going to reallocation through a budgetary mechanism. By reassigning certain departments, what was once under Fisheries and Oceans is now accounted for under National Defence. It helps augment the numbers quickly, but does it achieve the objective of providing the equipment that we need, the training that is needed and the resources that are needed to defend our nation and our waters? These are questions that Canadians legitimately have. There are reports of a proposed 10% cut in the Canadian Armed Forces operating budget. When we are talking about cutting 10% while saying we are going to augment and meet our NATO obligations, Canadians are right to ask how we square that circle. How does it come together that we are going to cut 10% out of operating budgets but somehow augment tremendously our level of spending on national defence? Canadians are right to ask how that goes together. I grew up in a little place called Hartfield, New Brunswick, and there, still to this point, two plus two equals four, but I am coming to learn in the House that this is not always the case. Sometimes two plus two equals 104 or 305 billion. I do not know. I cannot keep up with the figures that keep coming out of this place as relates to the finances of the nation. That is why we as the official opposition have an obligation to make sure, when it comes to procurement, that it is done properly, that it is prioritized, that the needs of the brave men and women in our armed forces are of the utmost priority and that what is needed is prioritized. If that is equipment, the forces get the equipment that they need. If they need more weaponry, they are going to get that weaponry. If they need better protective equipment, they get that. That should be the utmost priority, and contracts should not be awarded to friends and associates, those who are well connected in high places. They really should be going to those who are most qualified. I will end with this. There is a quick story that I am brought back to, and I hope I can squeeze it in. It is a story of a young man who was in a position of authority in a country that was not his own. He heard about his hometown, which was in a state of ill repair. The defences had fallen and the walls had collapsed, and this young man, whose name was Nehemiah, was quite distressed over the condition of the wall that surrounded the city where he grew up. He sought permission to come up with a strategy. He went back, and of course, it was dilapidated. It was in rough shape, and they did not know what could be done. The critics came, and they said that they could never do it for this reason; it would never get done for that reason; it was going to be faulty, and it was not going to be right. However, here is the good news: That young man came up with a strategy. He said that they were going to do something. Yes, there were threats that were emerging, and yes, it looked overwhelming to rebuild the defence of the city the way it should be, but they were going to put a brick in one hand and a sword in the other and build and defend at the same time. That is what the government needs to do, both build and defend. Let us do it together.

Sherry Romanado, Parliamentary Secretary to the Minister of National Defence

Liberal
“Today is the anniversary of the death of Warrant Officer Patrice Vincent, and my thoughts are with his family. The Coast Guard now helps our military train and share security information with allies. We are also investing heavily in military bases across Canada. Buying military equipment has been hard for past governments, so we need a new way to get our troops what they need.”
Official Hansard

Mr. Speaker, before I get to my question, I want to highlight that today is the difficult anniversary of the death of Warrant Officer Patrice Vincent, who was killed back in 2014. Our thoughts are with his family today. The member opposite talked about a couple of things. He asked about the Canadian Coast Guard and the capabilities it brings to the Department of National Defence. One of those capabilities is the ability to actually share security information with our allies, which was not the case when it was under Fisheries and Oceans. It also brings training opportunities to the Canadian Armed Forces. The member also mentioned a question with respect to New Brunswick. I have visited CFB Gagetown, and anyone who had a chance to go visit this summer would have seen the incredible investments happening on bases and wings across Canada. The member mentioned that successive governments had difficulty in terms of getting defence procurement right. Would he not agree that perhaps we need to look at a different way of doing what we do to get those capabilities to our men and women in uniform?

Richard Bragdon, Tobique—Mactaquac

Conservative
“Canadians want to invest in our armed forces quickly and properly. Because this involves a lot of money, Parliament must oversee it with honesty and openness.”
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Official Hansard

Mr. Speaker, I give my deepest respects to the service member, who paid a huge price in service, and to his family. Canadians are looking for the best way to invest in our armed forces to give them the adequate supports that they need and make sure it is timely. Canadians also want, and are demanding, that this be done with integrity. They want it done in a way that is transparent, open, with proper accountability and checks and balances in place. This is a huge amount of money, and rightly so, but it needs to be done properly, with the oversight of Parliament.

Luc Thériault, Montcalm

Bloc Québécois
“I am worried about this bill. It lets unelected people spend billions of defence dollars. The government will use this to avoid blame if things go wrong, which means there will be no accountability.”
Official Hansard

Mr. Speaker, is my colleague not concerned, as I am, that, by creating a Crown corporation and giving a board of directors who are not elected the responsibility of spending billions of dollars, the government is shirking its responsibilities and washing its hands in the event of unpopular decisions or scandals? Does he not think that there will be less accountability, if not a complete lack of accountability?

Richard Bragdon, Tobique—Mactaquac

Conservative
“I share the concern that this buying process could be abused. We need checks and balances to protect tax dollars and hold the government accountable. The House does not have enough oversight right now. We must make sure safeguards are put in place.”
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Official Hansard

Mr. Speaker, indeed, I share my colleague’s concerns. Regarding the procurement process, we want to make sure that checks and balances are put in place that protect taxpayer dollars and hold the government to account. I share the member’s concern that there is the potential for this to be abused, and it does not have adequate oversight and accountability from this body, from the House. We have to make sure that safeguards are put in place.

Fraser Tolmie, Moose Jaw—Lake Centre—Lanigan

Conservative
“Conservatives worry about the government being too close to private companies. We saw problems with that in past projects like ArriveCAN. I want to know what the member thinks about these concerns.”
Official Hansard

Mr. Speaker, the member made a couple of comments with regard to insiders and friends. We have seen this with the ArriveCAN app and the green slush fund. This is a huge concern for Conservatives. I heard a previous colleague from across the aisle talking about a closer relationship between government and corporations. I think that is what scares us the most about that. Would the member like to share his point of view and thoughts on that and on why there are some reservations on our side?

Richard Bragdon, Tobique—Mactaquac

Conservative
“I share the worry that this new corporation could give contracts to friends without proper rules. We must make sure Parliament can watch over these purchases closely.”
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Official Hansard

Mr. Speaker, I thank my colleague for his service to our country. I share the member’s concerns, as do many Canadians. Obviously, past behaviour can sometimes be an indicator of future behaviour. Members can understand why Canadians are looking at this with a bit of leeriness and wondering if we are establishing a corporation through which perhaps associates and friends could be rewarded with contracts without proper oversight from this body. I believe we have to look at that, make sure safeguards are put in place, and make sure that Parliament has proper oversight of any of this procurement that takes place.

Steeve Lavoie, Beauport—Limoilou

Liberal
“I support this bill. It gives businesses loans and financial help so they can afford to invest in defence projects. This lowers their risk, helps build military equipment in Canada, and makes our country safer.”
Official Hansard

Mr. Speaker, I will be sharing my time with the member for Riding Mountain. I am pleased to rise today on behalf of my constituents in Beauport—Limoilou to speak to Bill C-40, the strengthening Canada’s defence sector act. Last week, I was back in my riding with my colleagues from Québec Centre and Louis-Hébert. We held a round table with businesses from across the greater Quebec City region. The word that came up most often was “predictability”. Businesses want greater predictability so that they can make informed decisions. I will come back to this theme often in my speech, particularly as it relates to the needs of businesses. Bill C‑40 is built on three fundamental pillars: production, procurement and investments in relation to national defence and national security. One of its aims is to modernize our policy instruments by creating a Canadian corporation for defence investment and expanding the scope of the Defence Production Act to more explicitly address matters relating to national security, services, certain types of infrastructure, investment and economic security. Beyond the legislative provisions themselves, today I would like to talk about something that I believe is essential: the difference between being involved and being committed. There is an important distinction between being involved and being committed. There are many ways to work on a project. One can choose either to be involved or to be committed. Some members may be wondering what the difference is. Let me share a little family anecdote that may bring a smile to their faces. I grew up on a dairy farm. When I was young, my father used a simple analogy to explain the distinction to me. He would tell me that, at breakfast, the chicken is involved, but the pig is committed. I think members can appreciate the distinction I am drawing here. That analogy has stayed with me throughout my life. At its core, being involved means contributing to a project. Being committed means accepting the responsibility to devote the necessary resources, take risks and assume greater accountability to ensure its success. Depending on the circumstances, a government may choose either to be involved or to be committed. With this bill, we are talking about a concrete commitment in three areas: production, procurement and investment. It is a commitment to our defence, our national security and our economic security. How is that commitment being put into action? This bill sets out the financial tools that would allow the government to intervene in various ways to support the development of our defence industry, particularly by providing loans to support industrial projects and strategic investments; making advance payments to make it easier for certain projects to get off the ground; offering financial guarantees, such as loan guarantees, loan insurance or credit insurance; and buying, holding and selling shares and other financial instruments that make it possible to participate in funding certain businesses and projects. Why is that important? It is important because these tools will enable strategic projects to get off the ground, whereas they might otherwise have struggled to secure the funding they need. To fully understand the significance of this change, we need to put ourselves in the shoes of businesses and consider the economic reality they face. All too often, the government issues calls for tenders to procure equipment or specialized services, only to find that there are too few companies willing or able to bid. Why is that? It is because bidding for these contracts often requires substantial front-end investment by businesses, while the predictability of future orders is not always satisfactory. Allow me to provide a concrete example. A Canadian company is hoping to secure a major defence contract. To be competitive, it may have to purchase new equipment, modernize its production line, expand its facilities and recruit and train specialized workers. All of that requires significant investment, often amounting to millions of dollars. We are talking about our SMEs here in Canada. Before making this kind of investment, a company must conduct a thorough financial analysis and ask itself some fundamental questions. Will this investment be profitable? Will future revenues enable them to repay the amounts invested, when it comes to loans? Above all, will the contracts be predictable enough to justify the expense? A company cannot invest millions of dollars based solely on hope. As we know, hope is not a strategy. This reasoning applies to financial institutions as well. Naturally, a bank analyzes the profitability of the project when it lends money to a business. The bank is primarily interested in the business’ ability to repay the loan and its long-term viability. Why? The reason is simple. It wants to ensure that the business will be able to repay its loans. Banks will not lend money to a business that takes on too much debt or manages its debt poorly. That is how financing works in our economy. That is precisely where the tools in this bill can make a difference. It will create predictability to stimulate investment, particularly by allowing loans, guarantees and other forms of financial support that will help reduce some risks associated with investments in the defence sector. This can facilitate access to financing, encourage businesses to modernize their facilities and give them more confidence to develop their production capacity. The goal is not to replace private investment with public investment. Rather, it is about creating the conditions that enable more private capital to be mobilized to serve strategic priorities. In other words, it is about using the government’s financial tools to incentivize investments that might otherwise be delayed or never realized. Just last summer, I met with the owners of a business I used to know that was unable to bid on contracts because it did not have access to bank loans. Today, it can do so thanks to the BDC, a financial tool of the government. This company has adapted and is able to access the market. In Canada, we have tremendous strengths. We have knowledge, with one of the most educated populations in the world. We have innovation through dynamic entrepreneurs, researchers and technology companies. We have the natural resources and strategic materials needed for industrial production. We also have recognized expertise in sectors such as aerospace, shipbuilding, advanced technologies and specialized manufacturing. I am thinking of the Davie shipyard in the greater Quebec City area. Most importantly, we have women and men who have the talent, skills and ambition to grow these industries. However, as we know, having these assets is not enough. We still need to be able to mobilize them, connect them and give them the means to contribute to our national objectives. At the end of the day, our national security also depends on our industrial capacity. It depends on our ability to produce, innovate, procure and maintain strategic skills and technologies here in Canada. I will close with that analogy my father used when I was young: There is a difference between being involved and being committed. Being involved means participating. Being committed means being prepared to invest the necessary resources and take the necessary steps to achieve one’s objectives. That is the lens through which I see the measures proposed in Bill C‑40, which would give Canada new tools to support our defence industry, stimulate investment, and strengthen our national security and our economy. Canada’s ability to defend itself does not depend solely on the equipment we buy. It also depends on our ability to design, manufacture, maintain and upgrade that equipment right here in Canada. Achieving that requires more than just wanting a stronger defence industry; it means giving that industry what it needs to realize its ambitions and grow.

Fraser Tolmie, Moose Jaw—Lake Centre—Lanigan

Conservative

Linked statement

“The Liberals have a bad record on buying military equipment. They cancelled projects for helicopters and fighter jets. Why should Canadians trust them now?”
Official Hansard

Mr. Speaker, we have some very big concerns on this side from what we have seen and the track record of the Liberal government. The Cormorant helicopters were cancelled, and then the F-35 program was cancelled. We are hearing platitudes. What confidence can the Canadian public have in a Liberal government that has such a bad track record in procurement?

Steeve Lavoie, Beauport—Limoilou

Liberal
“The public trusts our government to give businesses the resources they need. In the past, companies did not have the help to succeed. For example, defence businesses used to be excluded from government bank loans. Now we have changed the rules so defence businesses can qualify for that money.”
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Official Hansard

Mr. Speaker, yes, it is clear that the public trusts our government. They believe we are giving our businesses the resources they need to achieve their goals. For 20 years, I worked with businesses. They did not have the resources to succeed. The government could issue calls for tenders, open up new sectors and create new opportunities all it wanted, but the resources were not there to support them. Take the Business Development Bank of Canada, or BDC, for example, which has adapted its financing criteria for businesses. Six years ago, businesses could not do business with the BDC because certain sectors, such as defence, were excluded. Today, however, that is possible. We are taking a flexible approach to allow sectors within our industry to qualify again and adapt their operations to support this. We are taking real action, and, yes, people can trust our government.

Alexis Brunelle-Duceppe, Lac-Saint-Jean

Bloc Québécois
“The government is paying a former bank executive nearly $700,000 a year to run this defence work. It is also stopping the procurement watchdog from reviewing these contracts. This plan wastes public money and hides the government's biggest purchases from proper oversight.”
Official Hansard

Mr. Speaker, my colleague talked about commitment. The government is committed to paying Douglas Guzman a salary of nearly $700,000 annually, which is double the salary of the Minister of Finance and National Revenue. Douglas Guzman is a former associate of the Prime Minister’s at Goldman Sachs. He is committed to satisfying Guzman, since Guzman was threatening to leave his position because he felt that working in the public service was ineffective. It is committed to being the only country among its NATO and Five Eyes allies to have such a structure, which raises a number of questions about transparency, ministerial responsibility and the use of public funds. Furthermore, it is committed to preventing the Office of the Procurement Ombud from reviewing contracts signed with the Defence Investment Agency, or DIA, since it does not have the authority to investigate Crown corporations. This means less transparency and less control over the government’s most expensive procurements. Is that the kind of commitment the government was elected on?

Steeve Lavoie, Beauport—Limoilou

Liberal
“Other countries like the United Kingdom and Sweden already use this model. The Bloc Québécois members need to agree on what they think is wrong with this defence bill. I want them to work with us and suggest changes to improve it, because it will help many Quebec businesses.”
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Official Hansard

Mr. Speaker, my colleague’s question contains several parts, but I will do my best to address them. Several countries, including the United Kingdom and Sweden, have adopted this model, incidentally. It is interesting to hear him speak about the ombud today while raising concerns about how contracts may be awarded.. Two of his colleagues spoke about this this morning. His colleague from Vallée-du-Haut-Saint-Laurent expressed concern about interference and political intervention. I took notes this morning. However, his colleague from Pierre-Boucher—Les Patriotes—Verchères said that the process was too politicized. I am not sure how the Bloc Québécois is interpreting the bill, but its members should agree on whether it is too politicized or not politicized enough. As for the salary issue, does it really have a place in the discussion on improving the bill at this stage? Bloc Québécois members can propose amendments if they wish. The member spoke about the ombud. He is free to bring forward amendments. What I would like to see is the Bloc Québécois helping to improve the bill, because many Quebec businesses stand to benefit from it.

James Bezan, Selkirk—Interlake—Eastman

Conservative
“I do not support this bill. It lets the government spend up to $1 billion through a new agency with very little oversight. This agency could spend that money on things like housing instead of national defence.”
Official Hansard

Mr. Speaker, I listened to my colleague speak, and he talked about how the Defence Investment Agency and setting up this Crown corporation is about more than just national security and national defence. He also talked about economic security. Bill C-40 would not only give power to the government to have up to $1 billion at any one time with no questions asked, so the minister can go get money from the general revenue fund, take those tax dollars and put them into who knows what at the Defence Investment Agency, since there would be little oversight and accountability there. It also talks about being able to buy things, items including residential housing, they could invest in that are non-military. Is the Defence Investment Agency as a new Crown corp really all about trying to find more dollars to put into other government ideas rather than national defence?

Steeve Lavoie, Beauport—Limoilou

Liberal
“This bill keeps strong oversight. Crown corporations must still report their spending, face audits, and get minister approval. The bill also helps local businesses. For example, the Davie shipyard in my riding supports 5,000 workers and over 600 suppliers.”
Official Hansard

Mr. Speaker, I would simply like to make a clarification. My colleague said that there was no accountability at all. Crown corporations are still subject to financial disclosure, audits and the submission of documents to Parliament, and they require ministerial approval. That aspect is important. Yes, this will be important for our businesses. In my region, we have the Davie shipyard. My colleague was talking about economic security. The Davie shipyard in my riding, with six icebreakers, represents $11 billion and 5,000 workers alone on the south shore of Quebec City, which will have an impact on more than 600 suppliers. We often hear about the major contractors. Many suppliers will be able to benefit from this.

Dan Mazier, Riding Mountain

Conservative
“I oppose this bill. It creates more government bureaucracy instead of buying the equipment our military needs. The government sends military contracts to foreign companies instead of Canadian workers, counts fish research as defence spending, and cuts money for homeless veterans. We must vote against this bill and build a system that actually equips our soldiers.”
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Official Hansard

Mr. Speaker, before I begin, I want to acknowledge the sacrifice made by the brave men and women of the Canadian Armed Forces. On Saturday, a fire swept through a training exercise at CFB Wainwright, and Canada lost four of its brave soldiers. These soldiers were doing exactly what we asked of them: training to defend our freedoms. I ask that all of us keep the families of these soldiers, and those fighting for their lives, in our hearts and prayers. I rise today to speak to Bill C-40, which would turn the Liberals’ Defence Investment Agency into a new Crown corporation. Barely a year after creating this agency, the Liberals are already proposing to give it a new name. Canadians do not need another bureaucracy, another ministerial title or another government announcement. They need a military that has the equipment to defend our country. We cannot defend Canada with press releases or Liberal promises. According to the government’s own data, only 61.3% of military force elements were ready for operations. Since the agency was created last October, the Liberals have talked about speeding up defence procurement, but they have failed to deliver equipment for the Canadian Armed Forces. I should also note that the Prime Minister’s friend from Goldman Sachs, Doug Guzman, was hand-picked to be the CEO of the Defence Investment Agency. He receives a taxpayer-funded salary of nearly $700,000. I think this is important to flag, because the Prime Minister has a trend of rewarding his buddies. While Canadians struggle to make ends meet, it has never been so good to be a Liberal insider. The Liberals say that this new Crown corporation will operate at arm’s length from the government, yet the bill itself says that “the Corporation must do as the Minister directs”. A Crown corporation that must follow the minister’s order is the Liberals’ definition of independence. This raises serious questions about transparency, oversight and expanded powers that would be given to the associate minister responsible for procurement. Billions of taxpayer dollars are at stake, and every one of those dollars must deliver real capability for our armed forces. Let us talk about the Liberal government’s record on procurement. Let us think about the last time we went grocery shopping. I know that many Canadians have flipped over a box or a jar to check where the product was made. Since the trade war with the United States began, 61% of Canadians say they are buying more Canadian products. Canadians are making an effort to support Canadian workers and Canadian businesses. However, despite Canadians’ reading labels, their own government is not. The Prime Minister has criss-crossed the country promising that Ottawa would buy Canadian. Most people have never heard how that is supposed to work, so I will explain. Every year, Public Services and Procurement Canada spends tens of billions of Canadian tax dollars on everything from software to steel. Last year, the Liberals launched their buy Canadian policy, which was supposed to give Canadian suppliers an advantage when the government awards big contracts. In other words, when Ottawa goes shopping, it is supposed to shop in Canada. While the Prime Minister’s buy Canadian promise sounded like common sense to most Canadians, the results tell a very different story. The Liberal policy does not require a company to be Canadian-owned to qualify as a Canadian supplier. That means foreign firms can wrap themselves in a Canadian flag and qualify as Canadian despite being controlled overseas, and that is what is happening. In the policy’s first six months, more than 70% of contracts awarded under buy Canadian went to foreign-owned entities. A Toronto Star analysis found that in the Prime Minister’s first 16 months in office, his government awarded $7.8 billion in contracts to American-controlled companies. The share of federal contract dollars awarded to U.S.–controlled companies has increased from 20% to 31%, a 55% increase. Of the 10 companies receiving the largest federal contracts, six are American. While the Prime Minister travels across the country telling Canadians to buy Canadian, his own government is shopping down south with their tax dollars. Perhaps we should not be surprised by this because when the Prime Minister chaired Brookfield Asset Management, its board approved moving the company’s headquarters from Canada to New York. Why does this matter to Canadians? In September alone, Canada lost 68,000 jobs, including 13,000 in manufacturing. While Canadian businesses fight unjustified tariffs just to keep the doors open, the Liberals keep sending Canadian tax dollars south of the border. If the Prime Minister really wants to buy Canadian, he should start by reading the labels. When Canadians hear the words “defence spending”, they picture fighter jets and soldiers with the equipment they need. They do not picture a research ship counting fish off our coast, but under the Liberal government, that is exactly what is being labelled as defence spending. At a government operations committee, I asked department officials a simple question: Are the Coast Guard’s offshore fishery science vessels now being counted as defence spending? The deputy commissioner answered yes, and members will not believe this, “100% of the expenditures of the Coast Guard are counted against the NATO targets.” Nobody disputes the importance of these services, but important services are not the same thing as military defence. The Liberals moved the Coast Guard under the Department of National Defence, and suddenly every dollar it spends helps the Prime Minister claim he is meeting our NATO targets. Moving an expense from one government category to another does not magically turn fisheries research vessels into battleships. Meanwhile, the government’s own reporting revealed that only 52% of key systems in the Canadian army’s fleets were serviceable. Instead of inflating numbers with fishery science missions, the Liberals should fund the military capabilities Canada’s armed forces need. We cannot talk about defence without talking about veterans. It is difficult to comprehend this, but thousands of veterans are homeless in Canada. When veterans lose their homes, we probably will not find them in a shelter. They may be sleeping in their car or on a friend’s couch. These are the men and women who once put on a uniform to defend our country. Unfortunately, earlier this year, the Liberal government decided they could not find any homeless veterans to support. It is unbelievable. A briefing note obtained through an access to information request shows that in February, the Liberals moved more than $3 million out of the veteran homelessness program. Government officials claimed that organizations had struggled to identify eligible veterans and that all opportunities to use the money had been “exhausted”. That is the same briefing note that predicted that veteran-serving organizations may raise concerns. That is undoubtedly so. Those concerns were not difficult to predict. At a government operations committee, non-profit veterans organizations expressed frustration, disappointment and even disgust that this funding was allowed to lapse. Debbie Lowther of VETS Canada said her organization helps 400 to 600 veterans every year, and about 80% of them are referred by Veterans Affairs Canada itself. The same Liberal government that sends hundreds of veterans to these organizations every year claims it could not find any veterans to help. The Liberals cannot claim to take the defence of our country seriously while turning their backs on the people who already defended it. Bill C-40 is the Liberal approach to governing. In a nutshell, it is more bureaucracy and less accountability. Whether it is a buy Canadian policy that sends contracts south, fish-counting ships labelled as defence spending or $3 million pulled away from homeless veterans, the pattern is the same. The Liberals love to change labels, hoping that Canadians will not ask for results. Canadians deserve a procurement system that meets our armed forces’ needs, supports Canadian workers and respects tax dollars.

Mark Gerretsen, Kingston and the Islands

Liberal
“The opposition complains about us counting the Coast Guard as part of our defence spending. All NATO countries need to use the same formula to compare their spending. The United States already counts its Coast Guard, so Canada should do the same.”
Official Hansard

Mr. Speaker, it must be tough for the opposition when all its members can do is criticize the way we calculate our investment in defence. I heard this member, like I heard the member for Selkirk—Interlake—Eastman earlier today, criticize how we are investing by counting the Canadian Coast Guard in the calculation. This member seems to take issue with it. However, I am sure he would agree with it me that when NATO-allied countries are comparing themselves to each other, it is important that we all use the same formula and all account for the same things. This member might be surprised to learn that the United States has been counting its coast guard in its calculation long before Canada ever did. Would he not agree that rather than the rhetoric we hear from him, it is probably more important that the formula among all NATO countries is the same and therefore counting the Coast Guard is a good thing?

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