Evidence of meeting #26 for Government Operations and Estimates in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was process.

A video is available from Parliament.

On the agenda

Members speaking

Before the committee

Joël Lightbound  Minister of Government Transformation, Public Works and Procurement and Quebec Lieutenant
Ieraci  Assistant Deputy Minister, Policy, Planning and Communications, Department of Public Works and Government Services
Reza  Deputy Minister, Department of Public Works and Government Services
Guzman  Chief Executive Officer, Defence Investment Agency
Harty  Senior Assistant Deputy Minister, Defence and Marine Procurement Branch, Department of Public Works and Government Services

5:10 p.m.

Conservative

Tamara Jansen Conservative Cloverdale—Langley City, BC

Okay.

Interestingly, the name of the organization that you lead is the Defence Investment Agency. “Investment” tends to mean making money, not buying equipment that works for soldiers. It sounds less like equipping soldiers and more like structuring a portfolio.

I want to make this a bit more concrete. If there is a piece of equipment that's the best in the world and it's available right away and it's the safest for our soldiers, but it doesn't help build domestic industry, would that make it less attractive under your new model?

5:10 p.m.

Chief Executive Officer, Defence Investment Agency

Doug Guzman

I think I can connect a couple of your questions.

DND and the CAF play a very important role in all of these projects, and the requirement-setting is done by DND. To the extent that DND has a view that two or three choices are adequate to serve and protect the CAF, it would articulate that. Only at that point.... It needs to be accepting of more than one solution if we can bring these other considerations to the table. It will have the last say on the requirements.

5:10 p.m.

Conservative

Tamara Jansen Conservative Cloverdale—Langley City, BC

Thank you.

After the minister told Canadians that the old system took too long and cost too much—and we know that's real—if your primary lens is investment returns and building market outcomes, rather than getting the best equipment for our troops quickly, I feel we face a risk.

My question is, are defence dollars at risk of being spent for market outcomes, rather than giving our troops the right gear at the right time?

5:10 p.m.

Chief Executive Officer, Defence Investment Agency

Doug Guzman

I think the word “investment” is confusing people a bit.

5:10 p.m.

Conservative

Tamara Jansen Conservative Cloverdale—Langley City, BC

It's a misnomer.

5:10 p.m.

Chief Executive Officer, Defence Investment Agency

Doug Guzman

It is taking the spend, which is going up dramatically, in pursuit of arming the CAF properly, as you point out, and it is using those funds, in addition, to create growth, therefore investing in the country. We do not have a pool of capital that we invest as an investor.

5:10 p.m.

Conservative

Tamara Jansen Conservative Cloverdale—Langley City, BC

I have another question.

Were you in charge when the Telesat contract was awarded?

5:10 p.m.

Chief Executive Officer, Defence Investment Agency

5:10 p.m.

Conservative

Tamara Jansen Conservative Cloverdale—Langley City, BC

That's lucky for you, then.

Thank you.

Oh my goodness, I have one minute left. Wow.

I have a few more questions.

In the process of complying with the ethics law, have you divested any assets that you owned?

5:10 p.m.

Chief Executive Officer, Defence Investment Agency

Doug Guzman

Have I divested assets? I have sold some assets that didn't fit the blind trust structure that the ethics—

5:10 p.m.

Conservative

Tamara Jansen Conservative Cloverdale—Langley City, BC

May I ask what they were?

5:10 p.m.

Chief Executive Officer, Defence Investment Agency

Doug Guzman

There were no single stocks. They were funds.

5:10 p.m.

Conservative

Tamara Jansen Conservative Cloverdale—Langley City, BC

Your biography shows that you worked for the RBC, where you led the bank's wealth management, which includes asset management. Is that correct?

5:10 p.m.

Chief Executive Officer, Defence Investment Agency

Doug Guzman

That's right.

5:10 p.m.

Conservative

Tamara Jansen Conservative Cloverdale—Langley City, BC

Do you have any financial stake, including but not limited to stock options, at RBC Global Asset Management?

5:10 p.m.

Chief Executive Officer, Defence Investment Agency

Doug Guzman

There are no equities or stock options at RBC Global Asset Management. They're all at the parent company. I have deferred compensation, which has been disclosed in the process, and I have stock options, which have been disclosed in the process and which will be part of the blind trust.

5:10 p.m.

Conservative

Tamara Jansen Conservative Cloverdale—Langley City, BC

The stock price has since doubled, and the Defence Investment Agency has given them a $750-million purchase order as of December. Is that correct?

February 10th, 2026 / 5:10 p.m.

Chief Executive Officer, Defence Investment Agency

Doug Guzman

I'm unaware of the Royal Bank getting a purchase order for $750 million.

5:10 p.m.

Conservative

Tamara Jansen Conservative Cloverdale—Langley City, BC

I'm sorry. It's the stock price of RBC Global Asset Management.

5:10 p.m.

Chief Executive Officer, Defence Investment Agency

Doug Guzman

There is no stock price for RBC Global Asset Management. There's a stock price for the parent bank, but I don't know what order you're referring to.

5:10 p.m.

Conservative

The Chair Conservative Kelly McCauley

Madame Rochefort.

Pauline Rochefort Liberal Nipissing—Timiskaming, ON

Thank you very much, Mr. Chair.

I come from a community that's very proud to be home to 22 Wing, a Canadian Forces base. I must say that in my community.... I'd just like to echo what my colleague mentioned about the pride. I find there's a lot of positive reaction to the government's general defence policy, to both your appointments and the launch of the Defence Investment Agency. That's what I'm hearing very much from the citizens in my riding.

I must say, Secretary of State Fuhr, that I enjoyed watching you on TV last week, going in and out of submarines. I thought that was very good. I watched all of the coverage. I was impressed as well. I understand that we're now down to two countries in a very short amount of time, so it seems to me like an efficient process.

I'm wondering if you might touch on that. When you describe the process, I almost get a sense that it's like a continual improvement process that you're engaged in, that you will learn as we go along and as we develop processes. I'm wondering if already there have been some lessons learned from our involvement with submarines or other acquisitions that we've made.

That's my first question.

Stephen Fuhr Liberal Kelowna, BC

It was an unbelievable experience, especially bringing all those companies over with us, because they could just sense opportunity over there. South Korea is a natural partner for us. They're like-minded. We can work with them. There's a lot of opportunity there.

Just to circle back to what you just asked, and maybe a bit about what MP Jansen referred to with Mr. Guzman, the primary lens for defence procurement isn't going to be investment. That's an additional lens. We need to build out our economy in a way that we just didn't have to do a year ago. This is very important.

Obviously, the Canadian Armed Forces' requirements are where we start. If they submit requirements, we're going to put on another lens to meet their needs so they can do the jobs we ask them to do. That's what they need.

We're going to put another lens on top of that and ask, if that thing exists in Canada, why would we not buy it from ourselves? We'll give the CAF what they need while we stimulate our own economy to meet the moment because of all this tariff situation and other pressures that are on us economically.

If we don't make it in Canada, can we partner with another nation that shares our values and that we can work with? We'll get our supply chains into their system. Not only can we make sure that we buy something that our supply chains are involved in, but we can get our supply chains into their system, whether that be South Korea or Germany. These are the new lenses of procurement that we have to think about. It's just adding other things that we have to think about, moving forward.

With regard to the sub choice, Canada doesn't make subs. It's buy, build or partner. We're not buying one here, because we don't have one, and we're not building one here. It's not because we don't have the capability; we're super capable. We could build a sub here, but we don't have time, and time is one of the things this agency has to solve for. Who are we going to partner with? This is why we ended up with the options we have, which are Hanwha Ocean, in South Korea, and TKMS, which is a Norway-Germany option.

We had 24 or 25 responses to a request for information on submarines. We quickly down-selected to two. Those two were primarily driven by the requirements of the Royal Canadian Navy. They said to us that these two would satisfy their requirements. They understood that there were other things at play here, but either of these two subs would work for them, so we decided to run a competitive process against the two that met the navy's requirements. That makes both of them very aggressive. They both want this job. They're both putting their best foot forward in terms of bringing our companies into their supply chains. They're making sure, for the in-service support that will be required to look after these subs for the next 30 years—which is 70% of the total cost of this program—that we have the IP to do it in Canada and that there's a Canadian company or companies to look after this sub.

This is exactly what this agency is doing. It's making sure that we get the stuff—the submarine, in this case—to the Canadian Armed Forces quickly. As I said at the beginning, we're going to shave years off this. The public-facing timeline on this before we got involved was a contract awarded in 2028 and subs in the water in 2035. We're going to have subs in the water by 2032. We're probably going to announce a winner this year.

We can get infrastructure going. It will take years to build infrastructure. We need to get people working in this country. There's significant infrastructure on both coasts to support these submarines. That gives us people working. It creates jobs.

5:15 p.m.

Conservative

The Chair Conservative Kelly McCauley

We're past our time. Wrap up, please.

Stephen Fuhr Liberal Kelowna, BC

This is very important.

In addition to that, we haven't done a really good job in the past of making sure that infrastructure is in place and ready for the equipment when it arrives. Getting this whole process rolling is very important, and that's what we're doing.