Government Operations Committee on Nov. 6th, 2025

[Dominique Blanchard]

Some of that remains to be seen. The organization was launched at the beginning of October. It has a new CEO who is coming on board, and who I am sure will have views on how best to execute. The consolidation of expertise into the integrated teams that are envisioned will provide some efficiencies in terms of engagement with stakeholders and domestic industry. The objective is to support domestic industry through this organization and this way of approaching procurement.

There are some efficiencies there, perhaps in compressing some timelines and accelerating some of the decision-making that takes place in the defence procurement process.

[Vince Gasparro, Liberal, Eglinton—Lawrence, ON]

That's wonderful. Thank you.

Did I nail it?

[The Chair, Conservative, Kelly McCauley]

No, you left 18 seconds on the clock.

[Vince Gasparro, Liberal, Eglinton—Lawrence, ON]

I will have to become even more efficient.

[The Chair, Conservative, Kelly McCauley]

I am afraid the Standing Orders say you are to apologize and resign, Mr. Gasparro.

Madame Gaudreau, please go ahead for six minutes.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Thank you, Mr. Chair.

Some of my questions have already been answered. Thank you to the witnesses for coming here today. There's something deeply reassuring about catching a glimpse into the future.

I'll pick up from the questions my colleague Mr. Gasparro had about procurement processes in the U.K., Germany, France and Australia.

Indeed, procurement is a centralized process. However, with all due respect to the work you're doing, the process is managed by National Defence.

Given this very specific and specialized context, why would the agency not be placed under the department, similar to how it is done in the countries I just cited?

[Dominique Blanchard]

Thank you for the question. I made a promise to answer in French and I'm going to do that.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

You're doing great.

[Dominique Blanchard]

Unfortunately, I don't have an answer to that question. It's a government decision.

I can only say there is a great deal of expertise within Public Services and Procurement Canada. Even though it's not exactly the same model as the one in the other countries, I think we will reap the benefits of integrating the Defence Investment Agency within Public Services and Procurement Canada.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

I asked you that question because I have some concerns. I was wondering whether this approach might suggest a lack of confidence in the Canadian Forces. I'm also a member of the Standing Committee on Veterans Affairs and we're currently engaged in a study on the delivery of services and the connection we have with our veterans. I'm therefore wondering how things are going at Public Services and Procurement Canada.

You've just said there is a sufficient level of skills and expertise.

Canada's goal to commit 5% of its gross domestic product, or GDP, to defence seems quite ambitious.

Does this mean you'll need more expertise?

[Dominique Blanchard]

I just want to point out that National Defence will continue to play a major role. The department will define what they need. It's therefore not true that it will no longer have any role.

One of the aspects we're looking into at the Treasury Board Secretariat is how the two departments can continue to work together.

As for expertise, that question is best put to the new president and CEO. We do know that the agency will draw on talent from the existing departments, but it may well be that it will need more expertise down the road.

I don't want to speculate.

I don't want to speculate on the sort of expertise that would be needed, but that's possible, and if so, mechanisms will be in place to look for the necessary expertise.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Congratulations on your French, it's great. I'm also doing my best to speak English.

Where do things stand in terms of the Canadian industry's production and maintenance capabilities?

Can it deliver projects in a timely fashion?

[Dominique Blanchard]

That's a great question.

It's not my area of expertise, but I do know that expertise is available. Under the proposed approach, there's going to be an opportunity to provide these businesses with support so they can play a part in meeting Canada's goal to invest 5% of GDP on defence.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

That brings me to my last question.

I know you're going to send us the document on governance and I appreciate that.

However, for the benefit of those who are wondering about this, how does it work in terms of authorities?

Who is in charge? Who will be held accountable if it doesn't work out?

[Dominique Blanchard]

There's no doubt that the secretary of state will play a leadership role within the agency. As we have previously said, Mr. Guzman will take office in a few weeks' time. Responsibility for defence procurement falls under the Minister of Public Services and Procurement Canada.

Mr. Franco, would you like to expand on that?

[Emilio Franco]

The Defence Production Act does give the Minister of Public Services and Procurement Canada the authority to make defence-related purchases.

The minister and the secretary of state would be best placed to answer the question on how they will manage their relations.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Okay.

Do you believe that a centralized defence procurement process will deliver additional efficiencies? You have a lot to manage.

[Dominique Blanchard]

It's too early to tell. Perhaps we'll have another chance to talk about it.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

We may invite you to come back another time.

Thank you very much, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Then we'll invite you to come back.

We'll now go to Ms. Block for a five-minute round.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Chair.

Thank you to our witnesses for joining us today.

I want to share a few facts, because my questions are going to be around the salary and how that salary was derived.

Here are some facts. The chief of the defence staff's salary is somewhere between $279,000 and $329,000. The Secretary of State for Defence Procurement's salary is $284,500. The Minister of National Defence's salary is equal to $309,700. The Prime Minister of Canada's salary is equal to $419,600, yet the CEO of the Defence Investment Agency, Mr. Guzman, who is a former Goldman Sachs colleague of the Prime Minister's, will have a salary of $670,000 plus bonuses. When I look at the chart for the bonuses, it looks like he's going to get, at maximum, a 33% performance bonus, which would equal over $900,000.

Can you tell us why he is being paid so much per year, and can you tell us why what he's being paid exceeds by so much the compensation set for Crown corporation CEOs as posted on the government's website?

[Donnalyn McClymont, Deputy Secretary to the Cabinet, Senior Personnel and Public Service Renewal, Privy Council Office]

Mr. Chair, I'm from the Privy Council Office, and I'm the deputy secretary responsible for appointments. I will do my best to respond to your question. In terms of the salaries that you quoted, you are absolutely correct.

In Mr. Guzman's case, it is not uncommon for us to bring people in from outside the Government of Canada. It's a decision for which the discretion rests with the Governor in Council, to make decisions around the kind of leadership that's required from important organizations such as this one. We are responsible for working within the frameworks that the Governor in Council sets to negotiate compensation for folks when they come in from outside. As you alluded to, there is a framework in place; we work within that framework, and the salary is consistent with the framework.

As you suggest, there is not only compensation but also performance pay associated with that. It's not a given that people are going to receive the top end, as you suggest. I think, to the point of my colleagues at Treasury Board, that it will depend on the ability to achieve the objectives that the minister and, ultimately, the Prime Minister have set for the CEO.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you.

It's my understanding that, according to the order in council, this appointment was made on the recommendation of the Prime Minister. Were there any other candidates considered for this position?

[Donnalyn McClymont]

When we learned that the government was interested in setting up this organization, I did provide some ideas to my boss, the Clerk of the Privy Council. At the time, it was John Hannaford.

I can't get into the specifics of the individuals, obviously, to respect their privacy, but as far as I'm concerned, and from what I know from where I sit, we did have some names that we suggested from our end.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Did your ideas include Mr. Guzman?