National Defence Committee on June 3rd, 2026

[Stephen Fuhr, Liberal, Kelowna, BC]

I think this came up in committee the last time I was here.

It's no secret; the defence department writes the requirements for the things that they need. We have a build-partner-buy strategy that we're applying to that, so that's what's happening.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Part of the defence industrial strategy is setting up the DIA. There is division 16, in the budget implementation act that just passed second reading—on division, I might add. It provides some incredible powers to the minister, who is yet to be named, for the Defence Investment Agency.

When you start looking at the ability to exempt people or companies from competing in the procurement process.... Is that how the government plans on tilting the playing field in favour of their preferred suppliers?

[Stephen Fuhr, Liberal, Kelowna, BC]

I don't think so at all.

Sole source has always been a way any government—including yours, which tried to sole source the F-35, ironically.... It's always existed there.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

At the same time, sole source, under the rules, still has to go—

[Stephen Fuhr, Liberal, Kelowna, BC]

If you look at the four ways you can sole source something under the existing rules—until this passes—there's some pretty broad subjectivity on the ways that you can do things. All this does is add clarity to that.

The Government of Canada, whether it be Conservative or Liberal, in the past and in the future, has always had the ability to sole source. There's some more clarity in the bill. That's my opinion. If they decide to do it for whatever reasons, they have to justify it.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Under Bill C-31, division 16, you are given all sorts of powers—or the minister is, or whoever is yet to be named or designated, because anybody within cabinet could be designated to take care of the DIA. You also have powers to take over corporations, buy shares and take over or replace boards, executive members and officers of a corporation. That sounds like nationalization to me.

[Stephen Fuhr, Liberal, Kelowna, BC]

Now it sounds like we want to have a committee meeting on Bill C-31, division 16, because we're really in the weeds here.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

We're not going to get a chance to study this act. It's going to be done through the finance committee, unfortunately. It's not going to happen here. We have you here now, and we're talking about the defence industrial strategy, which the DIA is going to be a major part of. Whether it's you as secretary of state now or a minister in the future, someone is going to have the ability to...you know, up to a billion dollars without even having to go through cabinet to spend money that they want—

[Stephen Fuhr, Liberal, Kelowna, BC]

I think what you're drilling at here, Mr. Bezan, is accountability, and I agree with you. Let me say that, as for any other department that exists now, all the accountability still exists. There's Parliament. There is this committee. There's the Auditor General, and there's a PBO. None of that stuff goes away. All we've done is create an agency to manage one of the biggest complaints about military procurement—as your committee identified back in November 2024—which is that it's too slow. It cannot deliver on time.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

I'll say this: The danger in what's laid out in this Defence Investment Agency act is that it gives the power to hide behind national security and not release that information to the public for why people are exempt. There is actually a clause in there that provides an out for the minister without explaining why somebody didn't receive an opportunity to compete under the competition clause. People are going to get disqualified.

[Stephen Fuhr, Liberal, Kelowna, BC]

Here's another revelation: The national security exemption has existed and exists now.

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

I have a point of order.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

I'm out of time anyway.

[The Chair, Liberal, Charles Sousa]

Yes, we are out of time.

Proceed, Ms. Romanado.

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

For the sake of the interpreters, I would ask that we allow the witness to answer a question and not talk over the witness, so I can actually hear what the witness is saying.

Thank you.

[The Chair, Liberal, Charles Sousa]

It's a point well taken.

Go ahead, Mr. Anderson.

[Scott Anderson, Conservative, Vernon—Lake Country—Monashee, BC]

I believe the witness is speaking over the question, not the other way around.

[The Chair, Liberal, Charles Sousa]

I think we're speaking over each other, unfortunately.

Mr. Fuhr and Mr. Vice-Chair, thank you very much.

It's over to you, Ms. Sudds. You have six minutes. Welcome to the committee.

[Jenna Sudds, Liberal, Kanata, ON]

Thanks for having me. It's wonderful to be with you today.

My question is for the minister.

Through your testimony, we heard about the need to build up our defence industrial base here within Canada. I'm wondering if you can speak to how the defence industrial strategy will strengthen our domestic defence industrial base while at the same time ensuring that the Canadian Armed Forces are receiving the capabilities they need.

[Stephen Fuhr, Liberal, Kelowna, BC]

If we look at what's going on in the world right now, we've seen a number of conflicts that we thought would end quickly but that just didn't. There are no signs of them ending quickly. Certainly one of them is for sure in that state. What I think we all could admit and agree to is that we need to persist. We have to be able to persist in conflicts, should we get ourselves into one. I hope that doesn't happen, but we have to be prepared to defend our sovereignty.

Supply chain resilience is a big part of that persistence. You can have integrated supply chain resilience with partners. You can have much better personal, sovereign supply chain resilience. Canada has amazing capacity and capability, probably much more than we've ever appreciated before. We want to engage in that supply chain resilience, not only to help us be more resilient and less reliant on others, but to create well-paying jobs and careers for Canadians. Whether it's shipbuilding or aerospace.... Those are big ones, but the small and medium-sized enterprises in this country are unbelievable. There is a ton that they have to offer. We need to ensure that we get them into our supply chains where we can. This document, the defence industrial strategy, really is a road map to do it.

Some of the initiatives are shared. For example, DISHs and BOREALIS are defence department initiatives, but they're still helpful. Build-partner-buy, from the DIA perspective, is how we can help bring these other companies in as we move forward. This document, which is the first of its kind—I think we've talked about this before, maybe even in the House—is the road map to help.

There is absolutely no way we're going to meet the KPIs in this document without bringing SMEs into the conversation. It's more than the conversation; it's bringing them into the process. It has to happen. They represent 93% of our companies in this space and 40% of the workforce. They are critical to making sure that we do this big economic pivot and give our great defence and security companies a chance to participate.

[Jenna Sudds, Liberal, Kanata, ON]

That's incredible. Thank you for that. I can attest, even in my own riding of Kanata, that it's been remarkable to see the small and medium-sized businesses that are raising their hands more on the dual-use technology side, but really leaning in and engaging on defence and the opportunities ahead of us. It's quite a moment, frankly, within that community.

I'll refer back to SMEs again—small and medium-sized businesses. One of the pieces I think about, and historically I think we've had some challenges around, is ensuring that they're building what the CAF needs. We need a communication line between industry, government and the CAF to ensure that there's ongoing dialogue and connection as to where we're headed.

Can you speak to how the DIS will help, I assume, or is helping to connect those dots?

[Stephen Fuhr, Liberal, Kelowna, BC]

Yes, I can. With the document specifically, there are, I believe, 10 sovereign capabilities listed. That's a pretty good indicator of where Canada plans to build capacity. I used to be a small business owner myself in this space, and I would be looking at where Canada plans to do more in the 10 areas that are identified in the DIS.

However, as I was saying just a few minutes ago to your colleague, the defence policy and the defence investment plan are also very important documents to signal to industry where we're going. If they want to [Inaudible—Editor] investing in themselves and/or get involved, the three documents—the defence policy, which in this case is an update, because that's what we're working with now; “Our North, Strong and Free”, the defence plan; and then the defence industrial strategy—are very good indicators.

Plus, I would say this: We have really done a lot of work with being available to industry. I take a ton of meetings, and it's not just me. All our colleagues take a ton of meetings with industry, to make sure they know what's going on. That will not stop. That will continue to make sure that small to medium-sized businesses know what's going on.

[Jenna Sudds, Liberal, Kanata, ON]

Thank you for that.

I know I don't have much time left, but one of the pieces that the defence industrial strategy has put forward is creating that certainty for companies—as you've outlined, the sovereign capabilities that are listed. To me, those 10 capabilities are a blueprint for industry. That certainty is a game-changer.

I don't believe I have time left, but I appreciate your being here with us today.

[The Chair, Liberal, Charles Sousa]

Thank you.

Monsieur Simard, welcome. You have up to six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Secretary of State, I had a conversation recently with your colleague Carlos Leitão about the Defence Investment Agency. We are trying to see how people in the mining and aluminum sectors can seize opportunities. We have been told that this agency will be created to provide a framework for the supply chain and perhaps develop what goes along with it, a value chain.

You have to understand that there are complex realities right now. In your document, I saw the desire to shift on certain aluminum products that could be used for government contracts.

I am from Saguenay—Lac‑Saint‑Jean, the largest aluminum-producing region in Canada. It's important to understand the dynamics of aluminum. The government often doesn't make the distinction between raw aluminum production, the ingot that comes out of it, and processing, unfortunately. In other words, some processing is needed before a raw aluminum ingot can be used.

Currently, in Quebec, there is no support for aluminum processors. Given the tariffs that are in effect, they are disappearing. In order to use aluminum right now, it has to be shipped to the United States to be milled. Once that is done, the sheets that are needed for military applications can then be used and included in the value chain.

I think that is a challenge. You must be aware that, in Quebec and in the rest of Canada, we don't currently have the industrial capacity needed to meet the needs you seem to be suggesting.

So I'm confused about the role the agency will play, because when I look at it overall, it seems like wishful thinking.

How are we going to make those objectives a reality?

That's a heck of a challenge. You have targeted specific sectors of activity, but are you aware of the challenges related to those sectors?