Debates of Oct. 20th, 2026

Strengthening Canada's Defence Sector Act

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

Mr. Speaker, I would like to begin by offering my deepest condolences to the families of the soldiers who lost their lives at CFB Wainwright this past weekend. Our thoughts are with their families and the families of the injured.

Transforming the Defence Investment Agency into a Crown corporation would ensure that Canada is better prepared to meet defence and security challenges now and in the future. The agency will have the tools, flexibility and expertise to make strategic investments and respond more quickly to the needs of our armed forces and Coast Guard. This transformation is central to Bill C‑40, the strengthening Canada's defence sector act.

However, I would also like to draw the attention of the House to the significant amendments this bill would make to the Defence Production Act.

These changes will better prepare Canada for an increasingly complex security environment. They are essential to strengthening our industrial base and ensuring that our defence procurement system can provide the armed forces and our national security partners with the capabilities that they need when they need them. The Defence Production Act has been a cornerstone of Canada's defence procurement framework since the Korean War. Over time, as the security environment and the nature of national defence have evolved, the act has been amended a number of times. As the world continues to change rapidly, the legislation needs to adapt as well. In recent years, we have witnessed growing instability and unpredictability around the world. New threats have emerged, supply chains have become more vulnerable, and the importance of economic security has become impossible to ignore. At the same time, our allies have invested heavily in their defence industrial capacity so they can produce critical equipment and technologies quickly and at scale.

Canada must keep pace with its allies. For many years, this act has guided our defence procurement and industrial strategy policies. However, it was designed for a very different era. Bill C‑40 modernizes this legislative framework to reflect today's security realities and the increasingly close ties between defence, security, technology and economic resilience. Historically, the act focused primarily on defence equipment and infrastructure exclusively for national defence purposes. Bill C‑40 expands its scope to include national security and services related to both national defence and national security. This broader scope recognizes that contemporary threats rarely fit neatly within traditional categories. Protecting critical infrastructure, advanced technology, intelligence capabilities and supply chain security all play a role in protecting Canadians.

Another important amendment seeks to clarify and expand procurement authorities. Under the Canadian corporation for defence investment act, the Minister of Government Transformation, Public Works and Procurement and Quebec Lieutenant would have exclusive authority to acquire supplies and services related to defence and security, not only for the Canadian Armed Forces and the Department of National Defence, but also for other federal departments, boards and agencies in the area of national security. After all, national security is a government-wide responsibility.

Whether supporting border security, the protection of critical infrastructure, emergency preparedness or intelligence operations, federal departments and agencies are increasingly dependent on specialized equipment and services that contribute to our security objectives.

It is important to recognize that maintaining national security is not limited to the procurement of goods and services. That is why Bill C‑40 allows the new associate minister of national defence for procurement to perform financial assistance operations related to production or investment in respect of defence or national security. These new powers will allow the government to play a more active role in strengthening Canada's defence and national security industrial base. We are fostering innovation that supports strategic capabilities and ensuring that critical technologies and manufacturing capabilities remain available to Canada and our allies.

This represents a real shift in perspective. Rather than viewing defence procurement as merely a purchasing exercise, this measure recognizes that it is part of a broader industrial and economic strategy. Investing in our industrial capabilities helps strengthen our sovereignty, reduces our vulnerabilities and supports good jobs across Canada.

The proposed amendments to the Defence Production Act are only one part of a broader, comprehensive package of reforms set out in Bill C-40. These reforms include the creation of a Crown corporation responsible for carrying out production, procurement and investment activities in respect of national defence for the benefit of the Canadian Armed Forces and the Department of National Defence. It should be mentioned that the minister of public works and procurement would remain responsible for the Defence Production Act.

As we modernize Canada's defence production and procurement framework, accountability remains key. Bill C-40 strikes a balance between agility and accountability. It seeks to remove unnecessary barriers that can delay the delivery of essential capabilities to the armed forces, while maintaining government oversight of important decisions. Bill C-40 delivers on both. At the end of the day, our goal is not just to spend more or move faster. These changes are meant to create an efficient, transparent and accountable defence procurement and production system that delivers results for our armed forces while maintaining the trust of Canadians.

At its core, this bill is about preparedness. It is about ensuring that Canada has the legislative tools it needs to build key capabilities, strengthen its domestic industrial capacity, support innovation, secure its supply chains and respond decisively to emerging threats. This bill reflects the reality that national defence and national security are increasingly closely tied to economic resilience, advanced technologies and industrial policy.

Our government is proposing substantial yet necessary amendments to the Defence Production Act. These amendments broaden the scope of the act, strengthen procurement authorities, introduce new investment tools and establish updated procurement rules that are appropriate for the current security environment. Taken together, these measures aim to create a framework that is more agile and responsive and focused on Canada's strategic defence and security priorities. This bill represents one of the most significant updates to Canada's defence production and procurement framework in decades. It reflects a clear recognition that security challenges are evolving and that Canadian institutions must evolve with them. That is what Bill C‑40 is all about. That is how our government is making sure Canada remains safe, secure and sovereign.

I look forward to taking questions from my colleagues about my speech.

[Cheryl Gallant, Conservative, Algonquin—Renfrew—Pembroke, ON]

Mr. Speaker, with the federal government investing, using borrowed taxpayer dollars, in the very companies that will be tendering bids and offering their models of equipment for purchase by the Canadian government, how do we know that we will get the best value for our dollar? How is it not a conflict of interest that the very people making the decisions on what equipment the government is going to buy have money invested in these defence companies?

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

Mr. Speaker, in our defence industrial strategy, we have three pillars: build, partner and buy. We have to make sure that Canadian companies are involved in the building of the maximum possible quantity of defence equipment and defence supplies. That is the reason we have to make sure that Canadian companies are always at the head of the line when it comes to defence procurement. We have made the commitment to go from 30% to 70% Canadian content in our defence spending. That is something we will definitely adhere to.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

Mr. Speaker, I thank my colleague from Les Pays-d'en-Haut, who has been very active on the procurement and defence file, including for the benefit of the regions. We know that regions like his or mine, Compton—Stanstead, could benefit from the economic spinoffs associated with the defence procurement strategy.

I would like my colleague to elaborate on the type of spinoffs we might expect to see in regions like his or mine.

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

Mr. Speaker, we do not need to wait for the spinoffs, because they are already here.

A $1.5-billion maintenance contract was awarded to L3Harris in Mirabel, in the Laurentians, for the CC-330 Husky refuelling aircraft. It has already been determined that the DISH, the defence innovation secure hub, will be established near Mirabel. Every person who lives in the Laurentians and has a good job in the aerospace sector will be able to benefit from these contracts and many more in the future, including Bombardier's contract for the Global 6500 jets.

[Marilène Gill, Bloc, Côte-Nord—Kawawachikamach—Nitassinan, QC]

Mr. Speaker, I did not get an answer earlier from the parliamentary secretary to the government House leader, so I will ask my colleague opposite the same question about Bill C-31 and Bill C-40.

The Liberals were trying to create something with Bill C‑31, which we are still debating, but it will likely end up being scrapped because they are replacing it with Bill C‑40.

Why did the government change its mind about something that was supposed to be such a good idea?

With the Liberals switching so quickly from Bill C‑31 to Bill C‑40, does it not seem like they are just winging it?

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

Mr. Speaker, the Defence Investment Agency was always intended to be a temporary measure. The goal was always to create a Crown corporation. That is what we are doing now.

The benefits have been clearly demonstrated in other countries, such as the United Kingdom, Australia, Turkey and Sweden. They have models very similar to what our government is proposing today. The rationale has always been this: It is absolutely essential to provide our military personnel with the capabilities they need as soon as possible, given the technological changes we are seeing on a daily basis. A Crown corporation will do exactly that.

[Lori Idlout, Liberal, Nunavut, NU]

Uqaqtittiji, I know that Nunavummiut will want to participate in keeping the Arctic secure, and I wonder if the member can describe how this bill would help make sure that Canadians are part of the procurement process of keeping the Arctic secure.

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

Mr. Speaker, we had the chance this summer to go to Inuvik to see how investments are already making a difference at the airport so that we are able to have our CC-330s land in the north and protect our north. We met with all the mayors and the regional first nations communities. We are also benefiting from all the money being spent up north. We will continue to invest in the north, because it is our most important border at this time.

[Cheryl Gallant, Conservative, Algonquin—Renfrew—Pembroke, ON]

Mr. Speaker, I will be sharing my time with the MP for Calgary Midnapore.

I rise on behalf of the women and men of Garrison Petawawa and the wider Ottawa Valley community to express my deepest condolences to the families of the four soldiers who lost their lives and the 39 people recovering. When tragedy strikes, the loss is felt deeply by all those in the Canadian Armed Forces, especially by their families and their loved ones. Private Shaun Farrell, Private Hayden Lykkemark, Private Aidan Goulding and Sergeant Morgan Wong fell serving their country. Their loss is a stark reminder of the dangers we ask the Canadian Armed Forces to undertake every single day.

We owe our seats in this chamber to the sacrifices made by those serving today and the veterans who went before them. We can never repay the debt we owe to Shaun, Hayden, Aidan and Morgan. What we can do is live up to the example they set of being of service to our country. As members of His Majesty's loyal opposition, we are called to serve by holding the government accountable. It is the duty of the government to appear in this House and give that account. Anything less is a disservice to all Canadians. What we owe Canadians, and particularly the members of the Canadian Armed Forces, is the certainty that we take the nation's defence seriously.

The Liberal government has tabled Bill C-40, an act respecting production, procurement and investment in relation to national defence and national security. The Liberals' chosen short title makes the purpose of this bill clear. It is called the “strengthening Canada's defence sector act”. It is not the “strengthening the Canadian Armed Forces act”. It is not the “speeding up defence procurement act”. It is another Liberal industrial strategy dressed up in a military uniform. There is a reason prime minister Brookfield appointed a bank president to lead the Defence Investment Agency instead of an expert in defence and security. This is all about making Liberal insiders richer.

Between pressure from our NATO allies, the aggression of Russia and insults to our sovereignty by the U.S. president, the Liberal Party now supports increased military spending. The Liberals saw the commitment to meet our NATO targets as an opportunity to cash in, and that is what this is really about. The Liberal talking points claim this bill is meant to help speed up defence procurement. Of course, this is what the Liberals said a year ago when the Prime Minister created a new bureaucracy within public works and called it the Defence Investment Agency. Six months later, the Liberals said it needed to be a stand-alone agency. A year later, the Liberals are claiming this needs to be a Crown corporation.

Changing the agency to a Crown corporation would not fix defence procurement because it would not address the root of the problem. As long as the Liberal Party of Canada continues to exist, the Canadian Armed Forces will struggle. From Pierre Trudeau scrapping our aircraft carriers to Jean Chrétien scrapping the EH-101 helicopter and Justin Trudeau whipping out his pen to cancel the F-35 procurement, one party has repeatedly campaigned against defence procurement. Not only did Chrétien and Trudeau actively campaign against military purchases, but they both won majority governments from those campaigns. Those campaigns sent a loud message to the defence sector and the public service that a delayed procurement is better than a negative headline.

Even today, while the Liberals claim to care about meeting spending targets, the Liberal Prime Minister has placed the F-35 procurement in jeopardy. The F-35 review is not making Canada secure. The review is not because the defence department has discovered a new advanced jet it did not know about before. The only reason for this fake review is that it is politically convenient for the Liberal Party of Canada. The Liberal government is willing to sacrifice national security to keep its elbows in an upright pose. These posers do not care about national security if it risks the poll numbers.

I wish this was not the truth. I want the government to succeed in buying the kit that the soldiers, sailors and airmen need. In some ways, this bill could actually be seen as a way to get most of the Liberal Party out of the way of the defence procurement. By creating a Crown corporation and a single responsible minister, it may get the industry minister to stop meddling in defence purchases.

Unfortunately, this bill's multiple mandates would replicate the same whole-of-government incoherence with a single Crown corporation. Even worse, the new power this Crown corporation would have to make equity investments in defence companies would be putting the entire organization into repeated conflicts of interest. How could this defence Crown agency corporation invest in a company while running a competitive procurement process that includes the same company? The only answer is that the government would have to sole-source the projects. Who needs a competitive procurement process when they own a piece of the bidder?

Obviously, sole-source contracts are rife for conflict and corruption, but Canadians may even forgive the Liberals' lining their pockets if at the end of the day, the women and men of the Canadian Armed Forces were provided with the very best equipment in the world. Instead, the Liberal government procured winter sleeping bags that do not work in the cold.

Once the government is a shareholder of a company that no longer has to compete for government contracts, is that company going to invest in research and development, or will it follow the lead of the government's newest sole-source defence contractor, Maritime Launch Services, and cash in its stock options?

This bill has less to do with our national security strategy and more to do with the Liberal defence industrial strategy. Rather than taking President Eisenhower's warnings of a growing military-industrial complex to heart, the Liberals are taking it as a how-to guide.

While there is more of a case for government intervention to maintain critical defence capabilities, this bill would go well beyond limited interventions. For example, there is a strong case for providing market security and long-term sustainability for armaments by expanding munitions stockpiles, yet this bill would allow the minister to stockpile anything the Liberal cabinet decides is in the party's interest.

Another example was recently provided by President Trump. On the same day the Liberals announced this bill that would allow them to buy equity in defence companies, the U.S. president announced the U.S. government was taking a 40% equity stake in a defence company redeveloping an old naval shipyard. The President argued that its equity stake would commit the U.S. government to keeping the facility operational forever. As President Trump said, he and the Prime Minister “agree on many things”, and that includes taking equity stakes in politically sensitive companies.

I disagree with the Prime Minister and the President. I appreciate the argument that this type of investment commitment can ensure the long-term stability needed to keep a critical factory in operation, yet as Ukraine's heroic defence against Putin's aggression has shown, the pace of technology and technological change is only accelerating. What is critical today may be obsolete in 10 years, but the contracts and scarce dollars will keep flowing to outdated factories because the government owns a piece of them.

Even if people support the government taking equity stakes in defence companies to secure currently critical assets, surely they would at least agree that there should be some constraints. Under this bill, there would be no limits. As the head of this defence Crown corporation, the Prime Minister's close personal friend and highest-paid government employee could buy 1% of a drone start-up or buy 100% of Stelco. That is an extraordinary amount of power to grant the government.

Not since World War II has the government nationalized a company without introducing specific legislation. Given how poorly the Liberals managed their national electric vehicle industrial strategy, if we grant the Liberals this much unaccountable power to implement their national defence strategy, all we can be certain of is that vast amounts of money will be spent while leaving Canadians with little to show for it.

The Liberals can continue to reannounce new strategies to speed up defence procurement, but the real problem is staring them in the mirror. This Liberal bill is a confession of Liberal failure. It is an admission of Liberal guilt. We owe it to the women and men of the Canadian Armed Forces to get them the best equipment, not the best investment deal.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, the member is blind to the reality that this bill has nothing to do with corruption or character assassination. It has everything to do with providing strength to our Canadian Forces through military procurement and enhancing the Canadian industries related to military expenditures. That is the reality of it.

Unlike the period when she was a member of Stephen Harper's caucus, when they spent 1%, this Prime Minister's caucus has not only committed but realized 2%. How does she justify her remarks?

[Cheryl Gallant, Conservative, Algonquin—Renfrew—Pembroke, ON]

Mr. Speaker, the only person in this room so far who has mentioned corruption and character assassination is that member.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Mr. Speaker, I listened intently to the member's speech, and I listened to the Liberals' questions about this, and the Liberals keep touting the fact that they are spending more money than we did when we were in power.

A couple of things are the case. First is the Liberals' fancy accounting when it comes to what they are spending money on in the military. I would point out that they moved the Coast Guard from being a civilian organization to being a military organization. Second, the Canadian Armed Forces' capabilities have not been improved. Nobody thinks the Canadian Army is in better shape today than it was under Stephen Harper, so I am just wondering if the hon. member has any comments about that.

[Cheryl Gallant, Conservative, Algonquin—Renfrew—Pembroke, ON]

Mr. Speaker, the real strength of our army is in its people, and the $2.9-billion cut to defence this year alone is going to impact the well-being of our military, the individuals and their families. The real concern about the expenditures in this bill is that borrowed taxpayers' money would be going to invest in defence companies so the government would have a piece of the action, and when a piece of equipment is built, procured or purchased, it would be the government that cashes in.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Mr. Speaker, I would like to hear my colleague's views on the 5% of GDP that NATO requires for defence spending.

Personally, I thought the government would be investing in buying tanks or airplanes or recruiting new soldiers. Instead, it seems to be investing primarily in organizational structures. There was going to be an agency, and now it will be a corporation. There was going to be a director, but now they will be called something else. I do not know what the person's title will be, but their salary will be at least double that of their predecessor. The government is tinkering with structures. All of this comes at a cost to Canadians and Quebeckers. At a time when everyone is tightening their belts and being asked to pay more, the government is spending money not on improving our defence capabilities, but on creating new structures and jobs for the Prime Minister's friends. This strikes me as a highly questionable way of meeting the NATO target.

What does my colleague think?

[Cheryl Gallant, Conservative, Algonquin—Renfrew—Pembroke, ON]

Mr. Speaker, the member from the Bloc is absolutely right. The 5%, 1.5% of which can go into infrastructure or a soft cost for the military, is only a piece of it. The other money is supposed to actually go into national defence to make our country safer.

What was mentioned earlier was the Coast Guard. The fact is that other countries' coast guards, which are included in the NATO calculation of 3.5% for the equipment, are actually armed. Our Coast Guard is not armed. All it would be doing is what it should have been doing already, and that is sharing information with defence, based on what it sees on the oceans.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Mr. Speaker, as it is a new session, it is always an honour to recognize that I am so pleased to stay in the House for the good people of Calgary Midnapore and speak on their behalf.

I cannot commence this speech without paying recognition to the tragedy that took place at CFB Wainwright. As the mother of a teenage son, I cannot imagine the pain these families are feeling right now, and I want them to know that my thoughts, my prayers and my heart are with them. I also want them to know that Shaun, Aidan, Morgan and Hayden were not just the sons of Canada, they were also the sons of Alberta. It is very poignant that this horrific event would happen on the eve of a referendum to decide Alberta's destiny within Canada. I am very happy to say that Albertans chose to be with Canada, because I believe that is a better destiny for us as Albertans. I also believe it shows that what happens in Alberta touches all of Canada.

All those who serve know what it means to take accountability, so that is what I am going to be talking about today: the implementation of Bill C-40 and the need for responsibility and accountability. Bill C-40 would transform the Defence Investment Agency into a Crown corporation. This is good for many reasons. It would give the organization greater authority to negotiate, to manage and to fast-track projects, which we hope would result in quicker outcomes for both our armed men and women and for Canadians.

However, as the saying goes, with great power comes great responsibility, and Bill C-40, I am afraid, would take away some of the responsibility and some of the accountability. It would do this by creating an arm's-length organization, by creating winners and losers and an opportunity for Liberals to reward friends and insiders, and by eliminating fiscal and procurement oversight.

The first way Bill C-40 would eliminate accountability is by creating yet another arm's-length organization. There are countless times I have been told by a minister in committee that they cannot respond to that question or they cannot answer my query because it is an arm's-length organization. They wash their hands of it, yet all of these organizations have an impact on Canadians' lives and all of these organizations spend the Canadian taxpayer's dollar. They should be completely accountable, both in the committee and in the House of Commons.

We have seen some of the most heinous misuse of funds in the history of the 11-year Liberal government by arm's-length organizations. For example, the Canada Infrastructure Bank has committed $18 billion since 2017, and in 10 years, despite this high expenditure, fewer than 10% of projects have been completed. Despite that, executives were given both bonuses and salaries to the tune of $8.6 million last year.

We cannot forget the green slush fund, Sustainable Development Technology Canada. The damning 2024 Auditor General report found 90 instances where directors failed to recuse themselves for a contract total of $76 million. Out of 58 projects, 10 projects were determined to be ineligible under their own rules, totalling $59 million. Another $20 million in seed projects was approved without the required screening. It was so bad that the federal government had to disband the organization, and every single board of directors member was forced to resign.

The second reason Bill C-40 leaves a wanting for accountability and responsibility is that it has pieces of legislation that would create winners and losers, which would allow Liberals to reward friends and insiders. It would expand the number of categories under which the minister could carry out a sole-source procurement. There would be 13 opportunities, in fact, with no options, no price comparisons and no comparative evaluations. It would also allow any number of future exceptions to be written into regulations, as many as they want.

It would exclude the minister from the consequences of outsourcing and these can be many and can be highly impactful, from overspending and choosing projects and solutions that are out of scope, to solutions that are wrong for operational requirements. It would also allow the minister to exclude anyone without justification, without oversight and without explanation; procurement ghosting; picking winners and losers; and giving contracts to friends and insiders. We saw this no place better than in the Auditor General's report in 2024 of McKinsey, with 10 departments being implicated and 97 professional service contracts for a total of $209 million. These rules would allow Liberals to give money to friends and insiders and they would allow the government to do what it loves to do best, and that is to play favourites.

Bill C-40 would also allow the corporation to withdraw up to $1 billion out of the consolidated revenue fund, and not just once but as many times as it needed to, yet the oversight would be missing. The DIA would be under Treasury Board rules to a substantially less extent than prior to Bill C-40, Treasury Board being the body that provides the oversight for the expenditure of funds. This would mean less regulatory oversight for the spending of taxpayer dollars, something Conservatives never like to see occurring.

The bill would remove the oversight of the Office of the Procurement Ombud, who audits the execution of government contracting to check for process. The procurement ombud said that he is concerned about the potential for less accountability when it comes to major defence contracts, and he has good cause for concern. In April 2024 testimony regarding the McKinsey contracting study, he stated:

We are seeing consistent problems across the federal procurement landscape. If you go back even as far as a decade and further, you'll see that many of these issues are repetitive in nature. It's not simply one issue, but what I will say—and this is what I believe the theme for this report is—that perhaps the system has lost confidence in delivering results for the project authority. As a result, people use the system in ways that it shouldn't be used.

This is something that we are trying to avoid.

In February 2024, in his testimony on ArriveCAN, the procurement ombud stated:

...the number one issue...is documentation. This is not unique to [just] these departments [that were included in this analysis and this study]. This is a struggle across the federal government.

In his 2025-26 annual report, the procurement ombud stated, specific to defence procurement:

Major defence procurements are high-value, high-risk, and central to Canada’s sovereignty and security [, something that is so important to Canadians at this time]. Persistent delays, fragmented accountability, and weak performance measurement carry real consequences, [as we saw this week] not only for public funds, but for operational readiness. While recent reforms demonstrate positive intent, their success will depend on clear accountability, disciplined implementation, and effective oversight throughout the [procurement processes and throughout the] lifecycle of defence contracts.

In these three examples, we see the necessity for accountability. Bill C-40 would take away that accountability and that responsibility by maintaining arm's-length organizations, putting in mechanisms to allow for winners and losers that would allow Liberals to reward their friends and insiders, and removing significant financial and procurement oversight. However, the solution is found where we begin. The procurement ombud stated, “If people aren't accountable, it creates big gaps in the process.... You do not step away from the gap and pretend it's not your responsibility.... When you see a gap, [you say] “I take accountability and responsibility [and I will] fill that gap.”

There is no place that is more critical and more fundamental to our Canadian sovereignty and to our Canadian security than our defence procurement. The Liberals should take accountability and responsibility. Those four young men who passed away deserve that.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, the Conservative Party is underestimating the true value of having an arm's-length corporation. This is not new. In Alberta, there is the Alberta Investment Corporation. I believe there are corporations that deal with gaming, lotteries and cannabis. These are all multi-billion-dollar corporations. In fact, in Canada, I suspect we will find there are corporations that deal with procurement. Developing a corporation for the procurement of military supplies and equipment would ensure there would be accountability, transparency and a high sense of independence.

Why is it the Conservative Party seems to be opposed to Crown corporations, even if they are at arm's length from government?

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Mr. Speaker, at the crux of the member's question was the example of many independent Alberta organizations. I would like to point out that while Albertans did choose to stay in a federated Canada, which is the right option, I believe, they also responded in eight out of nine other questions that they want more independence from Ottawa in terms of defining their own destiny and feeling responsibility as a province because, frankly, they cannot count on Ottawa or the Liberal government to do it for them.

What is really at the root of yesterday and the member's question is that Albertans have trust within themselves. What they do not trust is the Liberal government and more Liberal governance.

[Jeff Kibble, Conservative, Cowichan—Malahat—Langford, BC]

Mr. Speaker, clause 9 of Bill C-40 says, “The [Defence Investment Agency] must do as the Minister directs”. It does not say “may”, but “must”. I am wondering if my colleague can tell me why this should cause concern to Canadians if the GlobalEye failure under the Defence Investment Agency's current mandate predicts a path forward and to give an example of what we can, unfortunately, expect going forward under this new bill.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Mr. Speaker, I want to recognize the excellent work of our defence team, in addition to our associate defence minister for procurement, who has done a fantastic job in addition to the work of our shadow minister for defence.

The answer is clear. I will point out the change between Bill C-31 and Bill C-40. In Bill C-31, this position was not a minister, but was made so in Bill C-40. The reasoning is clear. The Liberals want more power for themselves. They want the ability to do things unilaterally without having the checks and balances in place. It is no surprise to me at all. The good issue that my colleague has raised is a question of control.

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

Mr. Speaker, my colleague from Calgary Midnapore has a lot of history here in working on Treasury Board, knowing how those guidelines are applied and why they are in place to protect the taxpayers of Canada. We have a fiduciary responsibility to make sure we are protecting those precious dollars that come from Canadian taxpayers and we have a responsibility to procure stuff for the Canadian Armed Forces so they can do the tough work of defending Canada and standing alongside our allies.

The member did mention the problem that the Liberals have, which is that nobody trusts them because of scandal. Can she talk about some of the scandals the Liberals have had and how giving them unfettered access to $1 billion at a crack through a corporation that is completely directed by one minister opens the door to more corruption?

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Mr. Speaker, frankly, in the nine years I have been here, I do not think I have enough time, but the WE Charity scandal stands out in my mind significantly. There is the green slush fund that I mentioned, McKinsey and my favourite from the last Parliament was ArriveCAN, which I believe really woke Canadians up to not only the ineffectiveness of the government but the ill will in the attempt to cover up the poor expenditures of the government, in addition to giving money to friends and insiders. It is an epidemic with the government and, unfortunately, for the Liberals, we will continue as the official opposition to hold them to account on it.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Mr. Speaker, I will be sharing my time with the member for Orléans.

Before I begin speaking to Bill C-40, allow me to say a few words on the tragic incident that took place at Canadian Forces Base Wainwright on Saturday afternoon. Sergeant Morgan Wong, Private Shaun Farrell, Private Aidan Goulding and Private Hayden Lykkemark are four lives and four families forever changed. Four futures were taken too soon. Behind each name was a cherished son, a beloved friend, a fellow soldier, and a life filled with hopes, dreams and promise.

I say to the grieving families that no words can ease the unimaginable pain of their loss. I wish them my sincere condolences, along with those of my constituents in the Saint–Laurent community. My heart, and that of my community in Saint-Laurent, is also with those who were injured, their loved ones and the military community carrying the weight of this tragedy.

It is in the spirit of respect for the men and women who serve our country that I wish to speak today. I am thankful for the opportunity to speak to Bill C-40, the strengthening Canada's defence sector act, which is an incredibly important bill at a time of considerable uncertainty, ongoing tensions and conflict around the world, and at a time when Canada is finally stepping up to bring our military up to par. As a former member of the national defence committee, where I had the chance to work on matters of defence for several years, I know just how overdue these changes and investments are. I personally credit the Prime Minister for doing what is within our control to defend Canada and our sovereignty.

Bill C-40 proposes to establish the Defence Investment Agency, the DIA, as a Crown corporation, to provide the agency with a clear mandate, a permanent structure and dedicated ministerial leadership focused on defence, procurement, production and investment activities in support of national defence and the Canadian Armed Forces. The DIA would operate at arm's length under the national defence portfolio, reporting to a new minister titled the associate minister of national defence for procurement.

The Office of the Procurement Ombud found this year that a major defence project takes, on average, 16 years to move through the full procurement pipeline, and in some cases as many as 28 years. Behind those numbers are real consequences. Canada purchased its CF-18s in the early 1980s, expecting to replace them in about 20 years. That did not happen. As the Auditor General told the national defence committee in 2023, the Department of National Defence had to increase the number of fighter aircraft available for operations by 23%.

We heard from industry officials and independent experts. Their message was consistent: The process is complex, rigid, risk-averse, and it cannot keep pace with the changing technology. Industry witnesses called it overly complicated and costly in time and money.

A witness who testified at committee in 2023 listed several challenges with the way we currently procure that create bottlenecks when it comes to defence procurement, including bureaucratic hurdles and the complexity of defence procurement processes, risk aversion issues and politicization issues, defence procurement personnel shortages, and a lack of transparency and accountability. Another witness described the bureaucratic steps and processes that are required to procure defence goods and services for the CAF as a “labyrinth of procedures and processes” that are implemented and managed by several federal organizations.

On structure, the testimony was just as clear. The Parliamentary Budget Officer told us that having one single minister and one single senior official responsible would speed up procurement, rather than having two ministers in two separate departments. Unless one minister is placed in charge of defence procurement, it will never be as efficient and effective as it could be. The current procurement system is simply not able to provide the CAF with the major weapon systems, latest military technologies and equipment it needs to maintain its operational readiness and combat edge in a timely and cost-efficient manner.

In identifying several challenges facing Canada's defence procurement processes and proposing possible solutions, witnesses at committee mentioned making defence procurement a national priority, promoting a sense of urgency in the defence procurement system, improving data collection analysis and performance measures relating to defence procurement, centralizing defence procurement, increasing defence procurement budgets, accelerating the pace of defence procurement, streamlining defence procurement processes, learning defence procurement-related lessons from allies, depoliticizing defence procurement, reducing risk aversion, investing in the defence procurement workforce and enhancing transparency and oversight.

Let me turn to what the bill would actually do and how it would solve these problems.

Today the Defence Investment Agency sits within Public Services and Procurement Canada, while the needs are defined at the Department of National Defence. The bill would move the agency into the national defence portfolio and put procurement and commercial authorities in one organization. Therefore, it would end the split that currently exists.

Second, it would create one accountable minister. Part 2 would amend the National Defence Act to create an associate minister for national defence for procurement, who would answer to Parliament for the agency. Witnesses told us they wanted one minister and one point of accountability, to make the system more efficient and easier to navigate.

Third, it would build expertise. The corporation would bring together a dedicated team of procurement professionals, guided by a board of directors and chief executive accountable to that board. The ability to recruit talent from outside the public service would further strengthen its specialized knowledge and commercial expertise. This responds directly to what I heard on the committee about the value of focused leadership and dedicated capacity. With clear responsibilities and commercial authorities, the corporation would be equipped to make informed, timely decisions and deliver results.

Fourth, the bill comes with safeguards. The corporation would be accountable to the government through a responsible minister, with legislated governance; financial, audit and reporting requirements; and parliamentary oversight. National Defence, the Canadian Armed Forces and the Canadian Coast Guard would continue to define what capabilities they need and the criteria for accepting them. The military would still decide what it needs. The corporation's job would be to deliver it.

Witnesses have emphasized that one of the most important challenges facing Canada's defence procurement system is the lack of clear ministerial accountability, stemming from responsibilities being spread across multiple federal departments and agencies. While calls to centralize defence procurement under a single organization are not new, meaningful reform requires more than structural changes. It requires a fundamental shift in culture, leadership and accountability.

Bill C-40 would set a great foundation, one upon which we could build and incorporate other smart and efficient practices, such as those that were recommended in the 2024 report. I personally put forward about 10 of those recommendations that were adopted by the committee, including recommendation 17, which was mentioned by the secretary of state earlier today in his speech.

Other recommendations that I had put forward include:

That the Government of Canada proactively collaborate with industry and universities early on to determine current capabilities and to come up with a made-in-Canada solution by leveraging our innovation and industrial strengths to meet our growing defence and security needs and to work collaboratively towards developing the tools and technology that will be needed by the Canadian Armed Forces in the years to come.

There was also this one:

That the Government of Canada make the procurement process more open, unbiased, and transparent with objective and realistic selection criteria to acquire the best equipment possible, and that it prioritize Canadian companies before opening the competition to other global competitors, especially for industries that are well-developed, competitive globally, and where Canada is a leader, such as the Canadian aerospace industry.

I will continue to work closely with the secretary of state to ensure that we continue moving in the right direction. Perhaps the most important change is already under way. Under the Prime Minister's leadership, we have seen a renewed sense of urgency and commitment to transforming how Canada approaches defence procurement. The Prime Minister has taken this issue seriously, demonstrating the political will necessary to challenge long-standing practices, strengthen accountability and drive meaningful reform. The real risk is not acting. The Auditor General has told us that delays have real operational consequences. The procurement ombud has put the average at 16 years. We cannot ask our forces to wait that long.

Last year, Canada spent $65.9 billion on defence, 2.03% of GDP, exceeding the NATO target for the first time in decades, and we are on a path to 5% by 2035. Money alone does not defend a country. It has to be turned into ships, aircraft, vehicles and equipment, and it has to arrive while it still matters. For years, the House has heard that our procurement system is too slow, too fragmented and too cautious. The Auditor General has said so. The procurement ombud has said so. Witnesses before the national defence committee have said so and recommended changes in a report that the government has said helped shape this bill.

Bill C-40 would give us one home for procurement, one accountable minister, dedicated expertise and oversight by Parliament. It would let us spend what we are committing to spend, and to spend it well. Our women and men in uniform have waited long enough. I urge all members to support Bill C-40 and to deliver the change they have been promised.

[Jeff Kibble, Conservative, Cowichan—Malahat—Langford, BC]

Mr. Speaker, it has been a hot topic today, about NATO GDP spending, which ties directly into what the DIA says.

I wonder if the member opposite could explain how the government can justify supporting the Coast Guard budget under GDP spending, when NATO's own regulations, right from its website, say that coast guard forces are to be “trained in military tactics, are equipped as a military force, can operate under direct military authority in deployed operations, and can, realistically, be deployed outside national territory in support of a military force.”

I have confirmed in committee that our Coast Guard cannot meet those requirements. Can the member justify the government's use of the Coast Guard as part of NATO GDP spending?