Finance Committee on Oct. 20th, 2026

[The Chair, Liberal, Karina Gould]

Ms. Jansen, I've already answered this question.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

I just think it's very important that we keep that as a convention.

[The Chair, Liberal, Karina Gould]

Thank you, Ms. Jansen. That's not a point of order.

I would return the floor to Mr. Guglielmin.

It is, of course, the prerogative of a member to choose to listen to the witness's answer. I'm sure most members and those viewing would like to hear the answer to the question.

Mr. Guglielmin, you have the floor.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Minister, youth unemployment is up 13%, according to the latest job number reports. We saw 67,000 job losses over August and September, and you told this committee before that apprentices can struggle to finish their training because they can't get enough working hours.

Now, does your department track—

[Patty Hajdu, Liberal, Thunder Bay—Superior North, ON]

I'm sorry, Madam Chair. That is not what I said. I have to correct the record if people say that I said a thing. You can check the transcript, but it isn't what I said.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

What you said is in Hansard.

You told this committee previously that apprentices can struggle to finish training because they can't get enough working hours. You said that in one of your previous appearances here.

Does your department track whether apprentices supported by federal hiring programs maintain their employment after that support ends?

[Patty Hajdu, Liberal, Thunder Bay—Superior North, ON]

Yes, we do actually track what happens to many of the individuals who get support through training programs, either federally funded or through the provincial transfers. In fact, we have data in terms of ongoing employment and earnings for Canada summer jobs, for work-integrated learning and social insurance number—

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Minister, an apprentice needs enough work to qualify—

[Patty Hajdu, Liberal, Thunder Bay—Superior North, ON]

Madam Chair, there was a question asked. I'd like to be able to complete my answer.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Can you give this committee an employment retention result? Can you provide it to us? How much of that employment is retained through the programs your department creates?

[Patty Hajdu, Liberal, Thunder Bay—Superior North, ON]

We can. We have that data, and it's quite positive.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Can you submit it to the committee within 30 days?

[Patty Hajdu, Liberal, Thunder Bay—Superior North, ON]

It's published in our results framework. You can look that up.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Thank you.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Guglielmin.

Mr. Leitão, you have five minutes.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Thank you, Madam Chair.

Minister, thank you for being here once again.

Like the member for Mirabel, Mr. Garon, I want to recognize early childhood educator week. Quebec's system of early childhood centres goes back a long time now. We are very proud of the service our public child care system provides. It benefits people from all walks of life. Children from every social background attend these centres together. I think that's one of the goals of the public policy.

Let's come back to this. We have had a bit of talk here about the employment numbers. I would just like to caution, perhaps, our colleagues to not pay a lot of attention to monthly fluctuations. They sometimes can be a little odd. This brings me all the way back, Madam Chair, to what we had last spring with the famous phantom recession that never actually happened, when data later on confirmed that there was no recession in early 2026.

About the labour numbers of July, August and September, I would caution that a lot of it was indeed in the public sector, was indeed in health and education and was indeed particularly in Quebec and particularly in the Montreal area. I would not be surprised—let's put it that way—if in October or November we see a huge correction and, all of a sudden, boom, you have 30,000 new jobs that happened in the educational sector.

These things happen with the labour force survey. When we look at the reality on the ground in the Montreal area, it's very hard to reconcile that massive job loss in health and education. Those numbers will be corrected in the coming months, so let's not pay too much attention to that at this point, but indeed, the trend is a little worrisome, because our job creation has been weak. It's not necessarily that we have lost a lot of jobs, but our job creation has been weak, and that in fact has had a detrimental impact, mostly for young workers.

Young Canadians have had a harder time than during previous cycles in getting into the labour market, and that's why, in that case, programs like the Red Seal program, for example, are very useful in making sure that we have sufficient training and retraining for young people and they can enter the labour market with the necessary skills. It's very useful.

Coming back to Bill C-31—that's what we are here to talk about—and the non-compete clauses, one of the elements of the Canadian labour market always has been that we've had a flexible and dynamic labour market. It's been relatively easy for people to change jobs, move around, go to other areas of the country and go to other industries. For any change we can make to ensure that flexibility remains in place—and, in this case, on the elimination of the non-compete clauses in federally regulated industries—I think it's very important to accelerate that process.

Perhaps this is not an easy question for the minister, but because we in the federal government don't have jurisdiction over that, have we thought of, in future federal-provincial negotiations, perhaps, or in conversations, trying to extend non-compete clauses to industries not under federal jurisdiction and to convince our provincial friends to move in that direction as well?

[Patty Hajdu, Liberal, Thunder Bay—Superior North, ON]

If I can, I'll just take a moment—I would not normally do this—to thank our chair for her work on child care.

In fact, I know you had a big role in this, Chair, and I want to acknowledge that we don't often get credit for the work we do in these strange places, but your leadership on child care has meant that families across the country are saving at least 50% on their child care fees. Indeed in Ontario, my province, it's an average of $22 a day and is saving parents up to $9,000 per child per year.

It's not just about the savings, though. It's about the quality early learning and child care that starts at an early age and sets up our youth for the healthy development that they need for future training opportunities.

I'm glad you raised it, and you're right. We did model what we did federally on the Quebec experience and the data that's come out from Quebec that the value of early learning and child care extends to women's earnings across their lifetime. There's also an impact on retirement earnings, which I think is something that we sometimes fail to talk about.

[The Chair, Liberal, Karina Gould]

Yes. Thank you for that.

Thank you, Monsieur Leitão.

That actually concludes our time.

I appreciate the shout-out, and perhaps I'll add my voice to Monsieur Garon's in thanking our early childhood education workforce across the country, because I think it's actually national ECE week. There are many people taking care of our children who are doing exceptional work right across the country. I think that on behalf of the finance committee, I can thank them.

Minister, thank you for your time today.

Colleagues, we're going to briefly suspend while we turn over for our final panel of today. Thank you.

[The Chair, Liberal, Karina Gould]

I call the meeting back to order.

Welcome back to our third and final hour of the finance committee today. We will resume our study of Bill C-31.

I'd like to take a moment to welcome our witnesses.

We have the Honourable Stephen Fuhr, Secretary of State for Defence Procurement. He is joined by Doug Guzman, the CEO of the Defence Investment Agency, who is joining us by video conference.

Mr. Guzman, we're glad you were able to find the time to meet with us today.

Also joining us are Wendy Hadwen, senior assistant deputy minister, and Vincent Robitaille, the assistant deputy minister of procurement.

With that, Secretary Fuhr, you have five minutes for your opening remarks.

[Stephen Fuhr, Liberal, Secretary of State (Defence Procurement)]

Thank you very much, Madam Chair.

Good afternoon.

I'm delighted to be with you today.

I was going to introduce everybody here, but it's nice that you've already done that for me. I thank you for that.

Madam Chair and committee, I think we can all agree that the security environment we exist in has changed significantly. It's more dangerous, less predictable and moving faster than the institutions we have traditionally relied on to respond to it.

Canada is making generational investments in national defence, but spending alone is not enough. We must ensure that those investments translate into capabilities being delivered faster, a stronger Canadian industrial capacity and value for taxpayers.

In 2024, the House Standing Committee on National Defence released a report called “A Time For Change: Reforming Defence Procurement in Canada”, recommending reforms to streamline procurement, reduce duplication, strengthen accountability and improve outcomes. In their supplementary report, the Conservative members called specifically for a single minister to be ultimately accountable for all defence procurement.

Last year, we established the Defence Investment Agency as a special operating agency within Public Services and Procurement Canada, always intending it as a temporary structure. These parliamentary recommendations, together with first-hand experience we've gained from operating the agency, have helped inform us on what we should do for the long term of our reforms. Bill C-31, in division 16, proposes a departmental agency. We have since introduced Bill C-40, proposing a Crown corporation within the national defence portfolio. While the proposed structure differs, the objectives remain consistent: Consolidate procurement, production and investment; establish clear ministerial accountability; reduce duplication; and deliver equipment faster while maintaining parliamentary oversight.

Importantly, we have not waited for legislation to begin delivering results. The agency has advanced significant procurement, including contracts for the next-generation rifles from Colt Canada, six Bombardier Global 6500 aircraft for the RCAF and military satellite communications equipment with Telesat. There's much more—maybe we can talk about that later—but those are just three I put to you as contracts. These are tangible examples of progress under the temporary structure.

Our experience has reinforced the importance of earlier industry engagement, commercial expertise and clear decision-making authority. We want Canadian companies, including small to medium-sized businesses, to have meaningful opportunities to participate in defence procurement and strengthen our domestic industrial capacity.

This committee has an important role in examining how public money is managed and ensuring that legislative changes support sound financial stewardship. Moving faster does not mean sacrificing accountability. The objective is not to eliminate checks and balances. It is to eliminate unnecessary processes that add time and cost without improving outcomes.

The Auditor General, the Parliamentary Budget Officer and committees of both the House and the Senate will continue to play important roles in scrutinizing defence expenditures and procurement decisions. Clear ministerial accountability, appropriate financial controls and parliamentary oversight remain fundamental to our approach. Ultimately, our success will be measured not simply by how much we spend, but by whether we deliver, how quickly we deliver and the value Canadians receive for their investment. The institutional structure may have evolved, but our commitment to those objectives has not.

Thank you for the opportunity to speak to you. I look forward to your questions.

[The Chair, Liberal, Karina Gould]

Thank you very much, Secretary.

We will begin with Mr. McLean for six minutes.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Madam Chair.

Welcome, Minister.

Minister, you're the Secretary of State for Defence Procurement. In the bill that came forward, Bill C-31, you were going to be promoted to a minister. The bill that's being proposed now, Bill C-40, moves you back to an associate minister of defence. There is some confusion, I think, in this whole title arrangement.

The Secretary of State for Defence Procurement was becoming the Minister of Defence...procurement...becoming now an associate minister.

Can you explain, first of all, these various titles and how they're going to affect your future going forward?

[Stephen Fuhr, Liberal, Kelowna, BC]

Thank you for the question.

If we talk about the now, it's Secretary of State for Defence Procurement. Under our current construct, it's a special operating agency that has ministerial oversight within Public Services and Procurement Canada. That's where we are right now. That was always a temporary structure. We just needed to get going on these procurements and learn what needed to be done.

As I mentioned in my remarks, we were well informed by your colleagues on the defence committee on what Parliament thought needed to be changed. That informed our decision. Then we have a year of experience in moving many, many files quickly. I think most people would agree that they haven't seen the government move this fast on procurement before.

That explains my current role as secretary of state. I will—

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Minister. We have only limited time here, so let me get to the meat of the matter here.

We had the Conservative Party of Canada in an election move very quickly on trying to get our military spending again. It was nice to see, when your government got elected, that you were actually going to emulate some of the spending we were going to do. We appreciate that very much, but we've seen in this Bill C-31, in fact, that you proposed something here as a structure, and you've come back in Bill C-40 just recently with a revised structure. You're proposing a Defence Investment Agency that you were going to be the minister of. Now you've unwound that and gone to a Crown corporation.

There's a difference between agencies and Crown corporations, but the main question here is the role of the minister. You'll be the associate minister. I assume that will be the minister who's going to be responsible for this. In the new construct, you still have the ability to direct the Crown corporation, which is bizarre as far as the establishment of the Crown corporation goes. You're neither fish nor fowl in this new arrangement. You're going to have direct control over the Crown corporation, which is supposed to exist at arm's length with just your policy direction.

Can you explain the rationale for that? Why have you drifted outside the norms of normal institutional governance for these types of agencies and corporations?

[Stephen Fuhr, Liberal, Kelowna, BC]

I'm very happy to do that. I was getting there, but thank you for keeping me on track. I'm happy to weave Bill C-40 into this. I know that it's not on the order of reference, but it is part of the discussion. If the committee agrees it's in order, I'll talk about these things together.

It seems that this is what you guys want to do, so I'm happy to do this. Under the original proposal, Bill C-31, we were headed towards a departmental agency, as you described, which is like many other agencies and departments we have right now. That bill, if you remember, was tabled in May. This small Defence Investment Agency was only stood up in October, so six months later we tabled the bill that's before the House, the one we're talking about today, Bill C-31.

What we've learned in the last year, so six months after we tabled the first bill, is that given the advantages we notice in terms of production, procurement and investment, we think a more commercially minded Crown corporation will be better poised to take on the investment and production side. That's something that a department won't necessarily have the same tools for. That's why we went with that model. Then—