Evidence of meeting #36 for National Defence in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was capabilities.
A video is available from Parliament.
Liberal
Sherry Romanado Liberal Longueuil—Charles-LeMoyne, QC
Is the proposal, then, that after removing (b), you're basically keeping the original motion as it is?
Conservative
James Bezan Conservative Selkirk—Interlake—Eastman, MB
No. The amendment reduces the number of meetings to four. It still provides invitations to other witnesses and says that the committee requests a government response. That all stays. The subamendment just removes the proposed words “30-year high in recruitment this year” and leaves in place the name of the report that we wish to study.
Liberal
Chris Malette Liberal Bay of Quinte, ON
I understand, politically, what the intent of that might be, but is there a question about the validity of the statement “given that the Canadian Armed Forces reached a 30-year high in recruitment this year”, or is it superfluous at all to the motion? Is that the idea?
Conservative
James Bezan Conservative Selkirk—Interlake—Eastman, MB
One, that part deletes the purpose of the original motion. Two, it's a 30-year high because they've only been collecting data for the last 30 years on what recruitment numbers are. It's actually an irrelevant number. If you want to go back to World War II and Korea, then we can really look at what recruitment numbers are. It's a metric that was only recently done, over the last three decades.
Liberal
Sherry Romanado Liberal Longueuil—Charles-LeMoyne, QC
Since we don't have the subamendment in writing, I just want to make sure I understand it. I understand that we're keeping parts (a), (c) and (d) of the amendment, but by removing (b), we go back to the original motion, which reads, “specifically looking at the changes outlined in the 27 January 2026 memo titled ‘Initial Observations — Impact of Changes to CAF Recruiting Policies at Basic Training Over 2025’”. Is that correct?
Conservative
James Bezan Conservative Selkirk—Interlake—Eastman, MB
That is correct. That is the intent of the motion. It's about basic training. It's not about recruitment.
Although I was ruled out of order by the chair, the question is around basic training at Saint-Jean. It's not about the 30-year high in recruitment numbers, which had been suggested by Mr. Malette.
Liberal
The Chair Liberal Charles Sousa
Okay. We're dealing with a subamendment to the amendment of Mr. Malette, with the change to remove item (b).
We'll put it to a vote.
(Subamendment negatived: nays 6; yeas 5 [See Minutes of Proceedings])
(Amendment agreed to: yeas 6; nays 5 [See Minutes of Proceedings])
(Motion as amended agreed to on division)
As the motion has been passed and adopted, we'll now resume our study on the impact of the defence industrial strategy, pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, February 23, 2026.
Today's meeting is taking place in a hybrid format. Before we continue, I will ask participants to consult the guidelines on the table. These measures are here to prevent audio feedback incidents and to protect the health and safety of the interpreters.
As a reminder, please wait until I recognize you by name before speaking. If you wish to speak, please raise your hand or use the “raise hand” function on Zoom. The clerk and I will manage the speaking order as best we can.
With regard to interpretation, please use your earpiece and select the appropriate channel. I'd like to remind witnesses that committee members may ask questions in either French or English. If you need interpretation, please take a moment now to prepare your earpiece and select the listening channel. To do so in advance will take full advantage of the time allotted for questions and answers.
All comments should be addressed through the chair.
Now I'd like to welcome our witnesses: Robert Huebert, professor, University of Calgary, via video conference; Christian Leuprecht, professor, Royal Military College of Canada; Richard Shimooka, senior fellow, Macdonald-Laurier Institute, via video conference; and Heather Exner-Pirot, senior fellow and director of energy, natural resources and environment, Macdonald-Laurier Institute, by video conference.
With that, I'll proceed to each witness for opening statements of up to five minutes.
Mr. Huebert, I'll start with you.
Robert Huebert Professor, University of Calgary, As an Individual
Thank you very much, Mr. Chair. I appreciate the opportunity to talk about what is critically important for Canada.
We're here to talk about Canada's defence industrial strategy, of course, and I would like to begin my comments by addressing what I see as one of the major challenges, if not flaws, of the efforts we have. I applaud the fact that we have finally gotten serious about the development of a national defence industry strategy. We almost have to go back to Canada's shipbuilding strategy to find an equivalent effort, but this is of a much greater magnitude.
My greatest criticism of the strategy is the assumption on which it is based. It provides some very strong pillars and provides us a direction for how we should be thinking in the context of addressing the Canadian military industrial strategy, but it misses one of the most critical elements that I think we no longer have time to put off. It is based on the assumption that we have more than enough time to prepare [Technical difficulty—Editor].
I would contend that many of the changes mentioned in the introduction and in the statement of the three ministers at the beginning of the strategy, in which they are talking about changing geopolitics, are being underestimated. In fact, the impact of the geopolitics is so great that Canada does truly—
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot—Acton, QC
Mr. Chair, I have a point of order.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot—Acton, QC
We didn't hear part of Mr. Huebert's remarks because of the sound cuts. Would it be possible for the witness to repeat, for example, the last minute and a half of his opening remarks?
Liberal
Professor, University of Calgary, As an Individual
First of all, I very much welcome the opportunity to speak to this very important issue.
It has to be commended that we finally have an industrial strategy. We have to go back to the Canadian shipbuilding strategy to find us actually addressing this very important issue.
However, my biggest criticism of the strategy is the assumption on which it is based: that the geopolitical environment gives us the time to do what the strategy calls on us to engage upon. I will argue that we do not have that time, that there's an urgency to what the three ministers in the introduction to the strategy call the changing geopolitics. The change has been so rapid and so dangerous that Canada now has to be thinking in the context of not only how we reform and engage upon economic engagement to provide our military with this capability, but also how we do so with an appreciation that we may find ourselves in conflict much sooner than we anticipate and that any industrial strategy has to take that into account.
This means that there are three core omissions from the strategy.
The first is how Canada actually provides the necessary equipment to its forces in the event of conflict. We have two friends we could have gone to for advice. We could have gone to the Ukrainians, who, of course, have had to engage on this very issue since 2014. We could have talked to our Taiwanese friends as well, in order to get some insights into how they have prepared in a very shortened time period for being engaged either in conflict or in unexpected conflict.
The second omission we have, which is from the industry, is the embedded element of the United States. We know that part of the reason we have this strategy is the recognition that the United States has become quite destabilized under the second term of the Trump administration. I think it would have focused our attention much more if, instead of talking around this issue, we would have been much more straightforward, would have identified that there are certain issues on which we cannot separate ourselves from the Americans, and would have been more forthright on it.
The third element the strategy does not deal with is the complete lack of any consideration or discussion about how Canada must deal with the political interface between our industrial strategies and what we actually do. Examples such as the Sea King replacement, the ongoing issues surrounding the replacement of the F-18s, and other related issues have demonstrated to most observers that one of the greatest challenges we face with regard to having an industrial strategy is understanding how the political interaction occurs, how and when it has hindered the process, and how and when it has helped the process.
We've seen some examples, such as the acquisition of the C-17s, that demonstrate that the process can, in fact, work. However, we have nothing within this strategy that tells us where the political interaction is a positive factor, where it is a negative factor and what we can do to ensure that, moving forward, we are focused only on the positive aspects.
That leaves me with three considerations for any effort to bring forward the strategy and build upon it.
First of all, we have to have a much greater urgency and a recognition that we are not just simply talking about making up for lost time, when, in fact, defence was at the bottom of any government priority. We also have to start recognizing what happens in a war or in a warlike environment and how that changes how we proceed with an industrial strategy.
Second, I think we have to take very seriously the examples and experiences of our friends and allies and look for advice on how to do this. The shipbuilding strategy goes back a long time, and we have a dearth of other examples in this regard. It's imperative that we pay attention to what our allies and friends have done.
Third, and last, we need to ensure that we change the manner of how we think about it. The report itself makes reference to the need to improve the ability for academia, industry and other actors to engage, but the hard reality is that we have not done this very well. We have to change how that environment actually functions.
Thank you very much.
Liberal
The Chair Liberal Charles Sousa
Thank you, Mr. Huebert.
Monsieur Leuprecht, we'll go over to you for five minutes.
Christian Leuprecht Professor, Royal Military College of Canada and Queen's University, As an Individual
Good evening. Thank you for the invitation. I would like to extend my greetings to my colleagues.
I'll be speaking in English, but you can ask your questions in the official language of your choice.
Sovereignty is a choice. At the end of World War II, Canada had the fourth-largest military in the world. Today, the Canadian Armed Forces are smaller than the Alabama National Guard, America's 30th-largest state.
The defence investment strategy is an opportunity to invest in Canada's most important instrument of statecraft, but to what effect? On the eve of Russia's war of aggression on Ukraine, the previous Social Democratic coalition government, under Chancellor Olaf Scholz, provided a one-time special investment of 100 billion euros in the German Bundeswehr. Other than a few additional planes, the money generated few actual capabilities, because much of it was diverted for political priorities and not spent on defence per se.
The DIS faces the same risk. There is barely a mention of conflict, war and scale. In other words, the litmus test for the DIS is to turn defence spending into actual capabilities. A stronger Canada in a stronger NATO needs to deliver on three priorities: The Hague investment plan, with its commitment to deterrence and defence; Canada's investment plan; and Canada's commitment to Ukraine.
Large sums of money are deceiving: Owing to inflation, driven by supply lines, components, workforce and new production capabilities and demand, more money for defence buys about the same quantities today or less than previously. Long-awaited legacy systems are coming in at much higher costs than anticipated. Canada is already at a disadvantage compared to countries such as Germany, which started some years ago.
In this light, it is all the more important for the government to make every dollar count, first and foremost for defence. Many of the capabilities Canada needs do not actually exist and need to be developed. Others exist, but wait times to procure them are prohibitively long, while other capabilities exist in theory but in practice are not available for Canada to purchase.
This is the logic that needs to inform the DIS: a commitment to defence procurement over industrial procurement. Canada needs to stop talking about where equipment is produced and instead about what defence needs and how to work with military partners on interoperability and industrial capacity.
To this end, the DIS needs to prioritize capability, interoperability and coordination with allies, because transaction costs among allies mean that it currently takes two allied soldiers to generate the same effect as one U.S. soldier, and prioritize deterrence, because we've left it too late to be able to defend. While the CAF rebuilds its defence capabilities, the priority needs to be on filling the gap with capabilities to change the adversary's mind. Deterrence is less about numbers than about credibility. For the DIS to succeed, Canada's adversaries need to perceive the DIS as a credible resolve to invest in stability, reliability and prosperity.
Prioritize filling the deterrence gap in NATO 3.0 in response to a changing U.S. force posture: capabilities and coordination with NATO allies on a European-Canadian industrial base to enable U.S. burden-shifting to the Indo-Pacific by accelerating defence production of planes and tanks. Where are Canada's contracts for the mundane aspects of defence production—artillery shells, precision-guided munitions, drones?
Prioritize economies of scale. Equipment manufactured by allied and partner states costs two to four times as much per piece as it does to buy American. Also, leverage Canada's relationship with Europe to counterbalance the vagaries of U.S. unilateralism. This should enable a grand bargain, with Canadian investments in defence, in collaboration with European allies, in return for European investments in Canadian energy, mining and enabling critical infrastructure.
The government is left with having to trade off political, financial, economic and defence priorities. By way of example, defence spending tends to be disproportionately more important in small or less affluent provinces. Nova Scotia defence spending creates about $2,000 per resident. To optimize and rationalize outcomes, the government needs to establish a commission of experts to weigh the different priorities: Should we buy off the shelf, or buy American or European? Should we collaborate with allies? Should we build in Canada, and if so, where in Canada? For the sake of efficiency, effectiveness and national unity, these decisions need to be depoliticized. This would have the added benefit of giving the federal government leverage to rein in provinces whose fiscal profligacy is utterly irresponsible.
At the upcoming Ankara summit, the U.S. and allies will expect Canada to, one, show genuine progress on its commitment on defence spending; two, have orders, contracts and delivery lines for a defence industry that address real production gaps; and, three, add autonomous systems to capability targets. That is the standard by which Canadian sovereignty is about to be measured. If we picture sovereign defence as a 100-metre run, current investments and the DIS barely get us out of the starting blocks.
Liberal
The Chair Liberal Charles Sousa
Thank you, Mr. Leuprecht.
Mr. Shimooka, it's over to you for five minutes.
Richard Shimooka Senior Fellow, Macdonald-Laurier Institute, As an Individual
Thank you, Chair.
I appreciate the opportunity to speak before this committee again, particularly on a topic that I think is of vital importance to our country.
Defence industrial policy is having a renaissance in Canada and internationally. While there have been several efforts to develop a Canadian policy over the decades, such as the 2014 defence procurement strategy, the last time it engendered a similar sustained interest was back in the 1950s.
The defence industrial base is among the most complex areas of policy-making. It involves military strategy, industrial policy, science and technology, education, and foreign trade, among others. Given its broad scope, I'd like to cede my time back to the committee and encourage members to ask specific questions of interest to them. I've written extensively on this area for the past decade. If members are interested, there are a number of works I can point to, such as a recent report on the history and structure of the Canadian defence industry, that would cover some of these areas.
My personal area of study is the comparative analysis of military strategy, procurement and industrial policy. In other words, it is the nexus of how our allies and partners formulate what military capabilities they will employ and how to develop and acquire them. By no means do any of them boast a perfect system, but their successes and failures are worthwhile to explore while Canada contemplates its own steps in this area.
Thank you. I look forward to your questions.
Heather Exner-Pirot Director, Energy, Natural Resources and Environment, Macdonald-Laurier Institute
Chair and honourable members of the committee, thank you for the invitation to appear today.
I would like to make three points regarding the defence industrial strategy and critical mineral supply chains. First, Canada has made meaningful progress on critical mineral security in the past year, particularly through the work of Natural Resources Canada and through allied coordination initiatives such as the G7's critical minerals production alliance. Second, we need a much more sophisticated understanding of supply chain vulnerabilities that goes beyond mining itself. Third, the defence industrial strategy's commitment to developing a strategy by this quarter to expand the production, processing, stockpiling and procurement of defence critical minerals requires that we think very strategically about what market-shaping mechanisms government should use to support resilient supply chains.
Canada is in a relatively strong position globally. We are a major producer of many strategic commodities. We possess significant untapped reserves and are viewed internationally as a stable and trusted supplier. That reliability matters more today than it did five years ago. What has changed is not simply demand for minerals but also the geopolitical environment around them. Critical minerals are no longer just commodities. They are instruments of industrial strategy, national security and geopolitical leverage.
Over the past several years, advanced democracies have become increasingly aware of how concentrated many of these supply chains are, especially in processing and refining. In some cases, allied countries may possess mineral reserves but remain heavily dependent on strategic competitors for the midstream stages of production that transform those minerals into usable industrial inputs. That means supply chain resilience cannot be measured simply by counting mines.
Vulnerabilities often exist further downstream, with refining, separation, precursor materials, processing technologies, logistics, transportation corridors and advanced manufacturing capacity. As a result, the challenge facing western countries is not primarily one of geology. In many cases, the resources exist. As the DIS acknowledges, Canada itself is a producer and has ample reserves of steel, aluminum and 10 of the 12 NATO critical minerals. The challenge is whether market-oriented producers can survive long enough to build alternative supply chains in sectors where competitors have spent decades using industrial policy, state financing and subsidized processing capacity to establish dominance.
This brings me to the defence industrial strategy and its commitment to developing a stockpiling strategy by the second quarter of 2026. I think this is an extremely important initiative, but I would encourage the committee to think about strategic reserves in broader and more modern terms than traditional Cold War stockpiles.
Strategic stockpiles today are not simply emergency inventories. They can also function as market-stabilization mechanisms that help sustain allied production during periods of price suppression or geopolitical disruption. They are being discussed across the west in ways that seem prone to heavy-handedness and inelegant structures that unnecessarily distort commercial markets. We will not beat our adversaries by copying their playbooks, but rather by taking advantage of our own strengths. It is important that we maintain industry-led and government-enabled approaches, rather than the other way around.
One important principle is the idea of a cost-based floor price. If governments are serious about maintaining domestic or allied production capacity for strategically important materials, there may be circumstances where governments establish a minimum purchase price based on the cost of sustaining production. The purpose is not to eliminate market discipline. It is to prevent strategically important industries from collapsing during periods of artificial oversupply, predatory pricing or geopolitical market distortions.
I recommend that the government act as a buyer of last resort, not first resort. Producers should continue prioritizing commercial customers whenever possible. However, when demand temporarily disappears or prices fall below sustainable levels, governments can provide strategic support through offtake agreements, contracts for difference, tax credits or reserve purchases that stabilize investment conditions. This matters because mining and processing investments are long-term decisions. Companies will not build multi-billion-dollar processing facilities if they believe prices can be strategically collapsed before projects reach profitability.
The key point is that these tools should be targeted and disciplined. Not every mineral requires the same policy response. Some materials may justify strategic stockpiles because they are low-volume but essential for defence technologies. Others may require support for processing infrastructure, permitting reform or coordinated allied procurement. Some markets may benefit from pricing transparency initiatives or pooled financing mechanisms with allies. In other words, these minerals should not be treated as a single market or policy category.
I expect and hope that NATO or the G7 has a working group that's looking at a series of minerals and their production and processing choke points and that's assigning responsibility to fill those gaps with the most appropriate market stabilization mechanism. For obvious reasons, this work wouldn't and shouldn't be made public, but I would think the committee would want to make sure that such work is being done.
The final point I'll emphasize is the importance of allied coordination. Canada should not attempt to replicate every stage of every supply chain domestically. That would be prohibitively expensive and inefficient. Instead, we should think in terms of resilient interdependence among trusted allies. That means coordinating stockpiles, aligning our processing strategies, sharing market intelligence and reducing duplication across allied economies. I'll have some more recommendations in a paper on June 4 on how we could do this with our allies in Australia.
I think my time is probably close to being up, so I'll end there.
Thanks. I look forward to your questions.