Federal government tables bill to make defence procurement agency a Crown corporation
The move is intended to give the organization more independence and speed up military equipment purchases.
OTTAWA — The federal government tabled legislation Tuesday to transform the Defence Investment Agency into a Crown corporation.
Bill C-40 would create the Canadian Corporation for Defence Investment, which would operate at arm's length from Ottawa and be overseen by its own board.
"The Crown corporation model is intended to give the DIA the flexibility, specialized expertise and tools needed to move faster, make strategic investments, and deliver the capabilities the Canadian Armed Forces need," said Doug Guzman, the CEO of the agency, in an email to staff.
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He said the extra freedom would "strengthen our ability to build Canada’s defence industrial base, develop sovereign capacity, and create greater economic and security benefits for Canadians."
The new Crown corporation would report to Parliament through a new associate minister of national defence for procurement, a cabinet role the legislation also creates.
Defence Minister David McGuinty told reporters "we need to move with urgency."
Government officials said the new structure will make it easier to recruit experts and structure contracts more like private sector purchases.
Philippe Lagassé, a defence policy and procurement expert at Carleton University, said the move could reduce bureaucratic processes involving multiple departments.
"Based on how Defence Construction Canada operates, DIA as a Crown could be the contracting agent for [the Department of National Defence and Canadian Armed Forces], which would slim down the number of actors involved," Lagassé said.
He cautioned, however, that it also means "fewer ministers would have their say over major projects involving large amounts of taxpayer money."
The DIA was created just over a year ago as a special agency under Public Services and Procurement Canada.
Prime Minister Mark Carney made speeding up defence procurement an important campaign promise in the 2025 election.
The government said the Crown corporation would be empowered to make investments in companies.
Officials emphasized the importance of buying Canadian and helping the domestic defence industry gain greater access to capital. "We have a limited tool kit," said one official.
Under the model, the Department of National Defence and the Canadian Armed Forces will continue to define military needs, while the Crown corporation will handle procurement, production and investment.
Lagassé said there are questions about accountability and transparency that will have to be addressed.
"Ministers would still have to answer for the corporation's activities in Parliament, but they would not be as directly accountable and could use that to deflect difficult questions," he said.
Guzman, a former Royal Bank of Canada deputy chair recruited by Carney, recently told staff he intends to remain as CEO.
The Carney government has a majority in the House of Commons, so it can easily pass legislation there.
Both Defence Minister David McGuinty and Secretary of State for Defence Procurement Stephen Fuhr are scheduled to hold a media availability Tuesday to answer questions.
With files from The Canadian Press, The Globe and Mail and CBC News