Government Operations Committee on Nov. 6th, 2025

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

The reform isn't being led by someone who has ever bought a sub or an F-35 jet. It's being led by someone who has managed portfolios and investment funds.

How much time do I have left?

[The Chair, Conservative, Kelly McCauley]

You have just over a minute and a half.

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

If we look at what appears to be happening here, we see that we have a massive new spending envelope of more than $80 billion over five years, centralized control—so, one agency managing the big purchases—a private sector banker in charge, whose expertise is moving capital, not delivering hardware, and language straight out of an industrial strategy: building domestic supply chains, leveraging innovation, etc. It sounds like the government is building an investment portfolio, not a stronger military. The idea of building a military industrial complex that's market-driven seems quite un-Canadian.

I'm just wondering, should we be concerned that, with Mr. Guzman at the helm, our defence dollars are going to be leveraged for market outcomes rather than military ones?

[Donnalyn McClymont]

Mr. Chair, I would again reference the Prime Minister's news release, in which he was quite clear that he was of the view—and it is the Governor in Council's prerogative to pick the people they feel are best suited for the roles of these, I would say, high-priority Governor in Council positions—that Mr. Guzman has the expertise, as the member alluded to, in capital allocation, project execution and large financial projects.

I would just go back to some of the comments that my Treasury Board colleagues made. Oftentimes, when we're looking for great people to lead these organizations, we look for specific backgrounds that we in the government may not have. We look for leadership acumen, and we know that we have skill sets within the government that can support the individual in terms of succeeding.

[The Chair, Conservative, Kelly McCauley]

That's our time.

Ms. Sudds, you have five minutes, please.

[Jenna Sudds, Liberal, Kanata, ON]

Thank you very much, Mr. Chair.

Thank you to the three of you for being here and for the work that you do.

First of all, I have a simple question, for whoever is best positioned to answer it: How is it intended that the new Defence Investment Agency will work with Canadian industry?

Of course, there is a tremendous amount of interest, given the steps that our government is taking around our commitment to NATO. That opens up massive opportunities for Canadian industry when it comes to innovation, jobs and investment. How will this enable us to grow Canada's defence industrial base?

[Dominique Blanchard]

Maybe I can start, and if others have comments, they can jump in.

I understand that there have been, and there will continue to be, extensive consultations with the domestic industry regarding what roles it thinks it can play and how the government can best support it in executing those roles. As was noted earlier, there are a number of areas of real strength within the domestic industry as it stands, so there may be opportunities to bolster those capacities based on the types of strategic investments the investment agency is positioned to undertake. I think they will have a better sense of that and a better answer to the question than I'm able to provide here, unfortunately.

As I said, those conversations are very actively under way on a number of different fronts, including with PSPC, National Defence and those who are at the Defence Investment Agency.

[Jenna Sudds, Liberal, Kanata, ON]

Incredible. Thank you for that. It's certainly a massive opportunity for our Canadian defence sector.

Pivoting slightly to thinking about how the Defence Investment Agency will work within the Treasury Board's existing approval frameworks, I would imagine that there are some changes being contemplated in order to streamline the decision-making process without compromising on accountability. Can you speak to that?

[Dominique Blanchard]

For us at the secretariat, it's not a choice between maintaining the status quo and completely withdrawing and abrogating our responsibilities; it's a matter of finding the right point in time for the board to be involved. The example we gave today as it relates to the contracting authority is a really good one. This will give the Treasury Board an opportunity to have line of sight on the procurement approach that is being considered at a much earlier stage than they would under the current approach, and potentially influence that as they see fit.

As I noted, it takes a risk-based approach, rather than basing it purely on other determinations, like dollar amounts. It's focusing attention on the areas that are the most important. We, as a secretariat, are in a process of continuous improvement when it comes to calibrating our role in terms of the challenge function that we perform. Our mandate is not solely to challenge, but to support departments in achieving their objectives and help them identify risks and mitigation. Where we situate ourselves in that process is a really important question that we reflect on a lot, and we continue to do that.

The case we're talking about today with the defence procurement dimension is one part of that, but we are continuing to look at that more generally: How can we be more efficient? Are we asking for the right kind of information, and are we asking for it at the right moment in time so that we can provide sound advice and support to the Treasury Board as it makes its decisions?

[Jenna Sudds, Liberal, Kanata, ON]

Incredible.

I think that pretty much wraps up my time.

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

We have Mr. Gill now for five minutes, and then Ms. Khalid.

[Harb Gill, Conservative, Windsor West, ON]

Thank you, Mr. Chair.

Thank you to the witnesses for coming.

Last night, the industry committee heard from experts who testified that the Defence Investment Agency bureaucracy would be responsible for only 8% of defence procurement. That leaves 92% of procurement stuck in the other five-department loop, which is DND, PSPC, ISED, Justice and TBS.

What are the plans to fix the other 92% of procurement?

[Dominique Blanchard]

I don't have the statistics you cited. I will only say that, again, this is a very new organization, so an area of interest for us at the secretariat is working with the organization to understand the process to onboard new procurement.

It's true that there will be procurement still taking place outside of the Defence Investment Agency. Supporting the organization and making sure that it is equipped to take on the procurement is an ongoing area of conversation that we will have with the agency.

[Harb Gill, Conservative, Windsor West, ON]

What access will Mr. Guzman have to senior government officials besides the defence secretary? What screens have been put in place to make sure there's no perception of any ethical violations or improprieties that could be perceived as such by the general public?

There's already a significant erosion of public trust when it comes to these kinds of appointments out there.

[Donnalyn McClymont]

Mr. Guzman will be part of the senior echelons of the public service. He will work closely with colleagues at Treasury Board, at National Defence and at Public Services and Procurement Canada.

On the question of the ethical conflict of interest, if you will, certainly he will be subject to the Conflict of Interest Act, as would any reporting public office holder.

For our part, we have been working closely with the commissioner when we have prospective candidates who are coming in from outside and who may or may not have assets or holdings that will need to be governed by the act. For a prospect, we have a range of information sessions with the Ethics Commissioner to make sure that individuals can comply with the law before we consider them for an appointment. The Ethics Commissioner was good enough to do this in this set of circumstances.

I don't have specific details about the conversations that the commissioner would have had with Mr. Guzman, but certainly that will be part of his responsibilities as a reporting public officer holder.

[Harb Gill, Conservative, Windsor West, ON]

Will he have that one-year cooling off period?

[Donnalyn McClymont]

He'll be subject to all of the requirements for all reporting public office holders under the Conflict of Interest Act and the Lobbying Act, as well.

[Harb Gill, Conservative, Windsor West, ON]

How much time do I have, Chair?

[The Chair, Conservative, Kelly McCauley]

You have a minute and a bit.

[Harb Gill, Conservative, Windsor West, ON]

I come from Windsor. We've had an affordability crisis brewing for quite a while now.

How does creating this new agency with a high-paid executive reflect the government priorities? As we heard from Ms. Block, one-thirteenth of the budget will be going to him. What's the expected return on investment?

Will this agency commit to publishing clear results, like procurement savings, faster delivery timelines and support for the industry? Will it also be involved in the acquisition of the F-35?

[Dominique Blanchard]

I can't speak to specific procurements that it will undertake. That would be a question to ask the agency and the CEO.

In terms of whether it will be required to report on its results, yes, it will be, just as all departments are required to report on results through departmental reporting.

[Harb Gill, Conservative, Windsor West, ON]

Is there any kind of governance or oversight framework that the agency has been given? Is there some establishment of those frameworks that you could share with us?

[Dominique Blanchard]

I think some of the documentation that was already requested would speak to some of what you're looking for.

In terms of governance frameworks, I can only speak to the Treasury Board part of what exists for governance and oversight. I can say that, as it relates to defence procurement, there are several layers of governance and oversight already in place. The agency will continue to be subject to that oversight.

[Harb Gill, Conservative, Windsor West, ON]

Since you hold the purse strings and hold the wallet, can you provide us with a breakdown of the budget and the staffing plan?

You're going to be signing the cheque for these folks, I'm assuming.

[Dominique Blanchard]

The funding was just announced in the budget. There will be a proposal that will need to come to the board to access that funding.

More details will be provided.