Liberals table bill to make Defence Investment Agency a Crown corporation

OTTAWA – The federal Liberal government introduced legislation on Tuesday to turn its Defence Investment Agency into a Crown corporation, overhauling its plans to streamline military equipment purchases and invest in the Canadian defence sector.

The Liberal government said as a Crown corporation, the agency will have more independence, get its own board of directors and be able to make decisions more quickly.

Bill C-40 will create the “Canadian Corporation for Defence Investment,” which will report to a new junior cabinet minister role: the associate minister of national defence for procurement.

“Defence procurement involves complex contracts and negotiations with some of the world’s largest companies,” Secretary of State for Defence Procurement Stephen Fuhr told a news conference on Parliament Hill. 

“The agency needs the talent, authorities, commercial expertise, to negotiate confidently, make timely decisions and to manage those relationships over decades.”

Prime Minister Mark Carney created the Defence Investment Agency, known in Ottawa as the DIA, last October to speed up defence procurement. He appointed his friend and former Royal Bank of Canada executive Doug Guzman to head it as CEO.

The agency follows Carney’s broader vision of making the government run more like a Fortune-500 company, and was created alongside other offices designed to speed up the pace of the bureaucracy, such as the Major Projects Office.

This latest move uses the same playbook the Carney government turned to with other new initiatives, such as the new Canada Strong sovereign wealth fund and Build Canada Homes, a Crown corporation designed to increase the supply of affordable housing.

Before the summer, the Liberals had rolled out a different strategy for the DIA.

At the time, Fuhr said it made more sense to make the office a departmental agency than a Crown corporation, since Ottawa would retain more control over spending.

“Whether it’s this government or any future government, an agency’s just a better way to do it where the government has a bit more control over the agency,” he told reporters on Parliament Hill in April.

When asked about this on Tuesday by The Canadian Press, Fuhr said the government’s views have evolved.

“A Crown will afford the DIA much more flexibility, authorities and its ability to attract commercial talent in a way that a department just can’t,” Fuhr said.

He added that section nine of Bill C-40 sets out greater ministerial control over the Crown corp., which will increase government and parliamentary oversight.

The section states the minister in charge can direct the corporation to act or force it to request ministerial approval before proceeding on a matter.

Parliamentary Budget Officer Annette Ryan warned on Monday the office will introduce new problems with financial transparency.

She said it will be hard to sort out whether the office is spending on behalf of National Defence or other departments.

“The ability to follow the money of what’s being done by DIA, on behalf of which ministers, in which fiscal years, and with which results, will be some of these new problems that we’ll have to find new solutions for,” she told the House of Commons National Defence committee.

That comes as the federal government looks to unleash a massive amount of spending to meet its steep NATO commitments.

In a note released Tuesday morning, the PBO projects by 2035, Ottawa will have to spend to the tune of $163.6 billion to meet its NATO core spending pledge of 3.5 per cent of GDP.

The new legislation introduced on Tuesday grants the DIA broad abilities to bankroll defence projects. It allows the corporation to make loans or payments of up to a billion dollars out of the consolidated revenue fund, subject to ministerial approval. 

It also sets out a long list of criteria for circumstances allowing non-competitive procurements. 

The minister in charge of the office can opt to sole-source a project to support a specific sector of the domestic economy. 

Equipment could also be sole-sourced simply if it is interoperable with other things used by the Canadian military — or by any “associated government.” That’s a flexible list of allied countries, which could be expanded to include any country seen as being “vital to the defence of Canada.”

Sole-sourcing can lead to politically fraught territory. The Opposition Conservatives are already raising alarm over Ottawa’s decision earlier this year to bypass a competitive process for new airborne early warning and control planes.

Conservative defence critics James Bezan and Jeff Kibble issued a statement late Tuesday criticizing the new legislation.

“After a decade of Liberal neglect, our sailors, soldiers and aviators do not need a new bureaucracy or a minister with a new title. They need a procurement process that equips them for the modern threats we face,” the statement said.

The legislation says cabinet will decide where the new office is ultimately headquartered. Currently, it is largely run out of Ottawa, although Guzman frequently works from Toronto.

The office is currently designated as a special operating agency, but it remains a fixed part of the normal bureaucracy under Public Services and Procurement.

It has already pushed forward major procurements for the Canadian Armed Forces, including the competition to replace the Navy’s aging submarine fleet, and a major contract awarded to Telesat LEO for military satellite communications services.

It’s envisioned to play a central role in the government’s Defence Industrial Strategy, released in February this year. The first-of-its-kind strategy is aimed at giving long-term guidance outlining how Ottawa wants to foster growth of the domestic defence industry.

This report by The Canadian Press was first published Oct. 6, 2026.