National Defence Committee on June 3rd, 2026

[The Chair, Liberal, Charles Sousa]

Mr. Watchorn has the floor.

Go ahead, Mr. Watchorn.

[Tim Watchorn, Liberal, Les Pays-d'en-Haut, QC]

On a point of order, I don't see how this has anything to do with the defence industrial strategy that we're supposed to be talking about today.

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

Let me rephrase it, then. When you are making these “payments to any persons” and loan guarantees, how does that support the defence industrial strategy, or is it turning into another scam?

[Stephen Fuhr, Liberal, Kelowna, BC]

I'll say this more broadly. I've said it before, and I'll say it again: The department now and the department in the future will always be held to account by the same net mechanisms that exist now for any other department. If Parliament, committees, the Auditor General or the PBO has an issue or if they are worried about something, they can haul in whoever it is in the future—me, or whoever that might be—to talk about what they think has gone sideways.

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

That's actually contrary to clause 29, which says, “The Minister is not required to provide a person who has been excluded”—

[The Chair, Liberal, Charles Sousa]

Mr. Bezan, your time is up. Your time is long gone.

It's over to you, Mr. Watchorn.

[Tim Watchorn, Liberal, Les Pays-d'en-Haut, QC]

Thank you, Mr. Chair.

Thank you to the minister for being here, and thank you to the officials for being here.

I would like to get back to more serious conversations about the defence industrial strategy, which we're here today to talk about.

I had the opportunity to see the defence industrial strategy in action. We had a wonderful announcement at L3Harris about the maintenance of the CC-330 Huskys and we have the procurement of the Global 6500s, and there's something I'd like to know.

Minister, you must be talking to companies all over the country. You've been to CANSEC and you've been to all sorts of different countries since you started your mandate. What are companies telling you about the DIS? How is it working for them?

All the witnesses we've heard today and over the last few weeks have been saying it's great. I'd like to hear your perspective.

[Stephen Fuhr, Liberal, Kelowna, BC]

I did review the committees before I showed up for the study, and I wasn't surprised. What I heard on Monday was very much what I'm hearing across.... Those are very much Quebec or eastern companies, but I've heard it all over the country. I've heard it in Atlantic Canada. I've heard it in the Prairies. I've heard it in the north. I've heard it out in British Columbia.

What we've done so far is remarkably better than what we had. There's no question about it. You could measure it in any way you want, and you would hear the same thing. It is much better, and it will continue to get better.

There's one thing I want to mention. You mentioned the L3. When we talked about supporting Canadian companies, we ran around and said “Canadian companies”, and that's true, but what we mean is economic benefit to Canada.

Foreign direct investment in Canada is probably at a 22- to 23-year high, which is great, and this is what we want, but we talk about economic benefit to Canada. L3, Lockheed Martin, Boeing—those are examples of companies that have thousands of workers here in Canada. As long as they continue to invest in Canada, that's what we want. Whether it's a born and bred Canadian company or it's a foreign company that is driving economic growth in Canada, we're open to all of it.

To circle back to your question, everybody that I'm hearing from is quite happy with the direction we're headed.

[Tim Watchorn, Liberal, Les Pays-d'en-Haut, QC]

That's great.

To get back to my Bloc colleague's point, I was at another announcement recently at Nouveau Monde Graphite, which has a mine in Saint-Michel-des-Saints. It is opening now, and they are going to be setting up a plant in Bécancour to do the primary transformation that we need to make sure we have the graphite we need as a critical mineral for our defence industrial strategy. It is one of the 10 minerals identified in the strategy.

I would just like to know, going forward, what metrics we're going to use to determine whether the DIS is successful. How are we going to figure that out?

[Stephen Fuhr, Liberal, Kelowna, BC]

There are a couple of KPIs in the document. We're moving towards 70% acquisitions in Canada and 50% exports. I think there's a 240% increase in revenue for small to medium-sized businesses. There's a bunch of them in there.

There's a 10-year window to get there. At the rate we're moving, I'm confident that we're going to get there. That's the important part.

I was really glad to see that you got such positive feedback. We're working super hard to make sure this works, because it really matters right now. We need to find other things for Canadians to do—careers. Our auto industry is getting hammered. Softwood is getting hammered. Steel and aluminum have massive pressure.

Whatever we can do to help...it's not just defence but the Major Projects Office, buy Canadian and Build Canada Homes. These are all pillars of how we're going to keep this economy running, and defence is going to do its fair share.

[The Chair, Liberal, Charles Sousa]

Mr. Fuhr and Mr. Watchorn, thank you for appearing before us today.

Mr. Bezan, go ahead, very quickly.

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

The secretary of state mentioned a couple of times the one-stop-shop phone number for SMEs. I ask that the email and/or phone number—1-800-Buy-Canada or whatever it is—be sent to the committee so that we can share it with SMEs that are asking us about this.

As well, for the record, the Defence Investment Agency is mentioned 20 times in the defence industrial strategy, and that's why we have them here today as witnesses to talk about the Defence Investment Agency.

[The Chair, Liberal, Charles Sousa]

Mr. Fuhr, thank you for being here today.

If you could provide additional information, that would be helpful.

In the meantime, we're going to suspend for a moment as we allow you an opportunity to leave. We'll resume in just a second.

[The Chair, Liberal, Charles Sousa]

We're resuming our meeting.

Before we turn to our new witnesses, we have to choose a vice-chair to replace Mr. Savard-Tremblay, who is no longer a member of this committee.

I'm going to turn it over to the clerk to take us through the election of a new vice-chair.

[The Clerk of the Committee, Jean-Denis Kusion]

Thank you, Mr. Chair.

Pursuant to Standing Order 106(2), the second vice-chair must be a member of an opposition party other than the official opposition.

I am now prepared to receive motions for the second vice-chair of the committee.

Mrs. Romanado, you have the floor.

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

I move that Ms. Normandin be elected vice-chair.

[The Clerk]

It has been moved by Mrs. Romanado that Christine Normandin be elected second vice-chair of the committee.

Is it the pleasure of the committee to adopt the motion?

(Motion agreed to)

[The Clerk]

I declare Ms. Normandin duly elected second vice-chair of the committee.

Thank you, Mr. Chair.

[The Chair, Liberal, Charles Sousa]

Mr. Simard, you have the floor.

[Mario Simard, Bloc, Jonquière, QC]

I decided to withdraw. I was in a conflict of interest.

[Some hon. members]

Oh, oh!

[The Chair, Liberal, Charles Sousa]

We welcome our new vice-chair to the committee. She's been on this committee in prior years. She was a very good member in those years, and we look forward to working with her as we go forward.

Now we're going to proceed in our next round and return to the defence industrial strategy.

We welcome the following witnesses: From the Department of Industry, we have Kendal Hembroff, associate assistant deputy minister of the industry sector. From the Department of National Defence, we have Dr. Kate Kaminska, the director general, BOREALIS joint program office, Defence Research and Development Canada, and Wendy Hadwen, assistant deputy minister for policy and industry.

As for those remaining from the first hour, we have already spoken with regard to them.

We will proceed with the opening statements of up to five minutes, please.

[Wendy Hadwen, Assistant Deputy Minister, Policy-Industry, Department of National Defence]

Thank you, Mr. Chair.

If it's all right with you, Kate and I are sharing the National Defence remarks, and then I'm passing it to Kendal. It will be five minutes each.

[The Chair, Liberal, Charles Sousa]

That's perfect. Please proceed.

[Wendy Hadwen]

Thank you so much for welcoming me back to this committee as part of your ongoing study into the defence industrial strategy. I'm pleased to share my opening remarks with my colleague, Dr. Kate Kaminska.

Last year, Canada invested $65 million in defence and security, as you know. In March of this year, we met NATO's defence spending target of 2% of GDP, and we are well on our way to meeting NATO's new target of 3.5% of GDP.

To reach this ambitious target, the mobilization and engagement of Canada's defence industrial base is needed, and the defence industrial strategy sets out our path. As we turn to implementation, we are focused on the sovereign capabilities that represent areas in which we have industrial capacity, operational requirements and export potential.

As the Minister of National Defence said last month, the defence industrial strategy is a unifying, unified national effort. At its core, it's about strengthening our sovereignty and building a more resilient, innovative and secure economy for Canadians. Above all, it's about delivering for the members of the CAF and the Coast Guard, who serve our country every day.

This work will help Canada gain greater strategic autonomy and reduce our vulnerabilities to international pressures and threats.

As we proceed with implementation, we are starting to see some positive impacts and early results. For example, last week, the Department of National Defence and the Ministry of Defence of Ukraine signed an arrangement to support the production of Ukrainian uncrewed aerial systems in Canada. The arrangement establishes a new partnership, Airlogix-Sentinel, between a Ukrainian defence technology company and a Canadian manufacturer of uncrewed aerial systems. We hope that with the support of our two governments, the partnership will combine the companies' expertise to manufacture Ukrainian drone systems in Canada for the armed forces of Ukraine and for Canada's armed forces.

I would also note that on April 30, the Minister of Natural Resources, Minister Hodgson,

on behalf of the Minister of National Defence, announced that the Government of Canada is making an initial investment of $40 million to assess the potential of a Canadian-controlled microreactor that could provide heat and electricity to remote and northern facilities and operations of the Canadian Armed Forces.

Thank you so much.

I'm pleased to turn to Dr. Kate Kaminska to finish our remarks on the part of National Defence.