BREAKING: Prime Minister Carney announces the creation of the Defence Investment Agency

The Prime Minister announced the official establishment of the Defence Investment Agency today. This Agency, formerly known at the Defence Prourement Agency in planning, will unify procurement across the Canadian Armed Forces, Coast Guard, and the remainder of Canada's security establishment.

Before we get into more details about this Agency, here is the press release that was released this morning, very early this morning I might add. I also wanna note that I had heard the name had changed from DPA, but like thats a relatively minor thing. Anywho:

---

As Canada’s new government rebuilds, rearms, and reinvests in the Canadian Armed Forces, we are focused on providing the women and men in uniform with the equipment they need, when they need it. With the right tools in their arsenal, we will reinforce Canada’s sovereignty, create high-paying new careers for Canadian workers, and strengthen our defence partnerships with Allies.

Canada’s defence procurement is currently fragmented across several departments, slow to consult industry, and too complicated to respond to rapidly evolving military needs – leaving the Canadian Armed Forces waiting years, sometimes decades for critical equipment. To protect our sovereignty and bolster our industrial capacity, the Prime Minister, Mark Carney, today announced the creation of the new Defence Investment Agency, which will overhaul and streamline Canada’s defence procurement. This new agency will build domestic manufacturing and supply chains, and create new careers, so the Canadian Armed Forces have the world-class equipment they need.

First, the Defence Investment Agency will consolidate procurement processes – removing duplicative approvals and red tape, accelerating defence procurement, and providing industry with greater clarity and certainty. With a centralised process of review and approval, procurements will advance faster. Specialised staff at the agency will have expertise in defence acquisitions, ensuring focused planning and execution.

Second, the agency will tie procurement more strategically to domestic industrial benefits – creating new careers, growing our economy, and supercharging innovation in aerospace, shipbuilding, and advanced manufacturing. By leveraging defence procurement as investments in Canadian workers, companies, and technologies, the agency will help Canadian firms scale up, develop cutting-edge capabilities, and compete globally. In addition to this agency, the government will also continue to prioritise investments in dual purpose infrastructure that delivers immediate benefits for both our military and Canadians. In doing so, it will not only equip the Canadian Armed Forces with world-class tools, but also position Canada as a leader in industries critical to security and prosperity.

Third, the agency will ensure earlier engagement between the Canadian Armed Forces and Canada’s defence industry, so the military can underscore operational needs, and industry can provide realistic assessments of timelines, costs, and technological options. Early engagement will also enable Canada to better anticipate future needs and build industrial capacity ahead of time, at speed and scale.

Finally, the agency will align Canada more closely with partners such as the United Kingdom, Australia, and France, who already have dedicated procurement bodies, making joint defence purchases and partnerships easier and more efficient. The new agency also positions Canada as a leader in the European Union’s Readiness 2030 plan, a multilateral effort with our European allies to reinforce defence supply chains and industrial capacity among allied nations. The Defence Investment Agency will prioritise partnerships and investments to meet 2% of GDP on defence spending this year and meet NATO’s 5% Defence Investment Pledge by 2035.

To spearhead this mission, the Prime Minister announced the appointment of Doug Guzman as Chief Executive Officer of the Defence Investment Agency. Having most recently served as Deputy Chair of the Royal Bank of Canada (RBC), Mr. Guzman brings three decades of experience in investment and finance, including leadership roles at RBC and Goldman Sachs. His expertise in capital allocation, project execution, and large financial projects will be instrumental in accelerating procurement and growing our defence industrial base.

The global landscape is rapidly changing, and Canada is meeting this moment with determination and resolve – modernising our defence capabilities, strengthening our industrial base, and reaffirming our role as a reliable partner in global security.

Quotes

“In a dangerous and divided world, Canada’s new government is ensuring the Canadian Armed Forces get the equipment they need, when they need it. The new agency will bolster our defence industrial capacity, create new careers, and ensure that in this new era, Canada’s leadership is not defined by the strength of our values, but also by the value of our strength.”

The Rt. Hon. Mark Carney, Prime Minister of Canada

“This is a tremendous opportunity for partnership between government and businesses. All at once, we can drive investment, strengthen our national security, and meet our international commitments. We will bring speed and simplicity to the process of arming our military, while building Canada’s industrial capacity. I am proud to have the opportunity to serve Canada at this important time.”

Doug Guzman, Chief Executive Officer, Defence Investment Agency

“Canada is rebuilding, rearming, and reinvesting in our military. The establishment of the Defence Investment Agency represents a bold step forward, ensuring that our procurement system keeps pace with today’s security challenges and aligns with the ambitions of our defence strategy. This agency will drive results – accelerating timelines, strengthening partnerships, and delivering better outcomes for both our Armed Forces and our economy.”

The Hon. Joël Lightbound, Minister of Government Transformation, Public Works and Procurement

“Canada faces a new security reality that reinforces the need for the Canadian Armed Forces to be agile, well equipped, and future-ready. It is a privilege to lead the Defence Investment Agency, which will streamline procurements, unlock opportunities for Canadian industry and workers, and ensure our military is prepared to defend our sovereignty. With this new agency, our government is taking a decisive step to equip our soldiers, sailors, and aviators with the tools they need, while investing in the growth of a strong defence industrial base.”

The Hon. Stephen Fuhr, Secretary of State (Defence Procurement)

“Canada is increasing and accelerating our defence investments, delivering on our international commitments. These targeted investments in the Canadian industry will build a procurement system that meets the needs of today. The creation of the Defence Investment Agency is an important step in ensuring the Canadian Armed Forces have secure, assured, and timely access to the capabilities they need to defend Canada and support our Allies and partners.”

The Hon. David J. McGuinty, Minister of National Defence

Quick facts

• Today’s announcement builds on the Government of Canada’s commitment to increase defence spending to 2% of GDP, or approximately $63 billion, in 2025-26, and to 5% of GDP by 2035.

• The Defence Investment Agency’s first phase of operations will focus on standing up the organisation, deploying integrated procurement teams, and advancing a first wave of high-priority defence procurements.

• Housed within Public Services and Procurement Canada, the special operating agency will be overseen by the Secretary of State (Defence Procurement), Stephen Fuhr.

• The Canadian defence industry contributes nearly $10 billion to GDP and supports over 81,000 jobs.

---

To further expand on things not in the announcement, additional information was released regarding timelines ines and the new mandate of the DIA. We have confirmation, as we have for a while now, that the DIA will begin operations in the fall.

The DIA will operate as a special operating agency within Public Services and Procurement Canada (PSPC) under the leadership of the Secretary of State (Defence Procurement) Stephen Fuhr.

The agency's day-to-day operations will be led by the Chief Executive Officer (CEO), Doug Guzman. The CEO will be accountable to the Deputy Minister of PSPC for providing short, medium, and long-term strategic direction.

All procurements related to defence, security, and the Coast Guard may receive input from the Defence Investment Agency, regardless of the stage in the procurement process or the authorities involved.

This will include new authorities and greater financial limits to get contracts approved quicker. Of course, we have no details on what exactly these include, or what these financial limits are.

As always there is still the very easy, very popular idea of raising the limits on Minor Capital Equipment (MCE) projects to a very nice, very flexible $100M, right at the threshold of Minor and Major Capital Projects. That would be one avenue I imagine is being investigated.

Similarly, reforms to the Project Complexity and Risk Assessment system might also be in order. For those who do not know, the PCRA is a 63-question tool used to assess the risks and complexity of a project. Each project is given a ranking from 1-4 based on its final score, up to a total of 320 points.

This is combined with the Project Management Capacity Assessment to determine who takes authority over the project, the DND or Treasury Board. I am being very simple here, because we do not want to crowd this up.

However, the system in place has often been criticized for not accurately portraying the inherent risk involved, lacking measures to accurately de-risk projects by using comparable examples and similar procurements, and is overall a bog down of the system.

For example, a UOR for ATGM does not factor into determining the risk of a wider ATGM project, despite procuring essentially the same capabilities in a similar process.

Of course, over the coming months we will see what reforms are in place. However, re-evaluating how we handle risk and complexity, and delegating more authority away from the Treasury Board and to the new DIA, would be a similar no-brainer.

The mandate is also there. To quote the current DIA page:

“The Defence Investment Agency will adopt new and more adaptable ways of buying equipment and services. Using flexible contract templates, modern procurement strategies and innovative models for acquisitions and investment.”

That could mean a lot of things, from reforming risk assessment tools to looking at things such as Agile Procurement. It also harkens back to the ever-present concept of Continuous Capability Sustainment (everyone’s favourite topic last year) and long-term, continuous production contracts.

That is not to say that things like CCS do not carry their own risk of ending up with potentially similar but still different fleets. That is less a risk for things like a Roshel Senator compared to others.

I am in the firm camp that such risks are worth it, and would allow us to get ahead of potential obsolescence and supply issues by making sure that older equipment is regularly cycled out on a yearly, or however you feel like stretching it, basis.

Key points here are that there are numerous easy reforms out there. However, almost all of them require taking a look at the background, the fundamentals of the system itself, to really maximize their potential benefits.

Simply increasing spending authority sounds great on paper, however it does not tackle other challenges and restrictions in the system that might end up bogging down any progress you might have otherwise made.

We cannot really judge that though until we know the full suite of reforms, both in authority and legislative, that might come as the DIA is developed.

Now, in saying all this, we actually do get a look at what the DIA is thinking in terms of reforms. While we again do not have concrete details yet, the mandate of the DIA does include a section outlining its guiding principles and values.

It is here that we get our first real look at the expectations and guiding philosophy behind the DIA. It again lacks details, but does provide a sort of advertisement for what to expect.

I was going to paraphrase this section. However, I believe it is only right for you to see it in its entirety.

The FASTER principle in Canadian defence procurement aims to streamline processes, enhance adaptability, and speed up the delivery of capabilities, ensuring the Canadian Armed Forces and Canadian Coast Guard can maintain operational superiority and close critical vulnerability gaps.

By simplifying requirements, prioritizing ready-made commercial and military solutions, and fostering early and continuous engagement with industry, Canada can more swiftly address emerging needs. FASTER emphasizes collaboration with Canadian industry and allied partners to support innovation and interoperability, ensuring that Canadian Armed Forces capabilities align with Canada’s defence objectives.

Flexible

Use a range of procurement options and fit-for-purpose pathways that consider the risks associated with specific capabilities, ensuring value-for-money in solutions that maximize operational impact and align with defence and economic objectives.

Agile

Support iterative capability development by working with industry to identify innovative, timely solutions and integrate emerging technologies that ensure the Canadian Armed Forces remain combat-ready.

Strategic

Encourage early decision-making that allows Canadian participation in partnerships and international collaborative or joint defence procurement projects with allies.

Trusted

Cultivate long-term partnerships with trusted suppliers, partners and allies through ongoing, transparent communication and strategic collaboration to ensure reliable, interoperable procurement outcomes.

Export-enabling

Consider export potential from the outset of procurement decisions, evaluating the international market landscape and enabling supports to strengthen Canada's defense industry through global partnerships.

Resilient

Strengthen the resilience of Canada’s defence production capacity by prioritizing supply chain redundancy to safeguard against disruptions and ensure strategic sources of supply, including through stockpiling.

Philippe Lagassé, Alex McPhail, and Alexander Rudolph recently released a report on Agile Procurement in regards to defence. I highly recommend seeking it out.

I am an Agile child. I am fond of Agile methodology and the value it could have in defence procurement, so perhaps I am a bit biased to see it here.

It might not give details, however FASTER does give some basic insights into what the government is thinking when it comes to defence procurement.

Canada will aim for agile, rapid procurement of capabilities through leveraging off-the-shelf solutions and prioritizing joint procurements and partnerships with allies.

Focus will be given to Canadian industry and developing capacity at home, building up dual-use technologies and infrastructure, and building strategic partnerships, including through creating long-term, continuous relationships with partners in industry.

A few eyes might also catch the terms supply chain resilience and the mention of stockpiling. That might mean things as simple as making sure that Canada’s supply of things like critical minerals and spare parts have adequate redundancies to deal with supply chain crunches or increased demand brought by potential conflict.

It might also mean leveraging contracts to attract new suppliers to market, say by leveraging something like MCAV to try and attract another armoured vehicle manufacturer to Canada.

It might also, I pray to you Stephen Fuhr, mean opening up the Munition Supply Program to reform and expansion.

It is something I have argued for a long time needs to be looked at when discussing these reforms, obviously backed by new mandates for what should count towards the program and in much higher yearly quantities than now.

You also once again see partnerships as a key focus here. As we start negotiations regarding SAFE, and potentially deal with the reality of a deal that might be less than what we want, I find it a bit amusing to see such a clear mandate to prioritize these kinds of relationships when looking at procurement opportunities.

This is not me bagging on SAFE. Those who have followed my SAFE-posting will know that I am still supportive of it, and understand why France is pushing for a 50 percent ceiling.

I just find it funny how much of a focus there is on something that we have not even come to an agreement on regarding our participation. SAFE is mentioned by name in the press release but not here, however it is very clear what they are referencing in all this.

There is still much, very much left on the table that we do not know about. We will see over the coming months how everything comes together, and how extensive these reforms are.

I am still worried, honestly. I have confided in people the last few days about this. However, a friend of mine did calm my anxieties a bit by reminding me that I have always been an advocate for the risky.

It is not like me to be hypocritical and conservative in my beliefs in reforms. As someone who constantly advocated for taking chances and pushing through massive reforms, it would be disingenuous to now take a hardline stance.

There are people waiting for these reforms. There are people waiting to get to work. There is always risk when creating a singular agency like this, and trying to bring together so many different players.

This will not be easy. It will not be quick. It will take years to get the DIA running where the federal government wants it to be. There is heavy risk of falling into the trap that many others have, and getting cut at the ankles while spending a decade or more trying to make this right.

The risk of failure is always present. Yet maybe this is the first of many such risks we have to take the leap of faith on. I do not know. That feeling of dread is still in the back of my mind, and maybe that is a bad thing.

I want this to work. I really do. I also trust Stephen Fuhr. I have loved his work so far. He seems very focused and dedicated to this, and listening to him talk makes me feel like he recognizes and thinks of many of the same things I do.

So I put my faith in him here. It is easier to be calm when you have people you feel a connection to on issues, and who you feel want the same outcomes. He's gonna be talking this afternoon about this all. If he says something new, I'll update this post around 3/4PM EST.

We all know things need to change. We all know that the system is rotten at its foundation. I am not the one who knows what to do to fix that. I do not think any individual is. So I rest my faith in the people I trust, and hope that those who know better than me prove me to be the overly anxious boy I know I am.

---

EDIT: So as soon as I posted this Pippa ‘Peeps’ Norman of the Globe & Mail, who by the way I love her work. You should all check her out. She does great on the Defence and Innovation file decided to drop a little mini-Interview with Fuhr that gave some more context.

I will provide the point form to encourage you to read her article and give her some love. She deserves it.

Here is the gist:

• Being rolled out in two phases, the first of which will last 8-12 months. This gives a chance to iron out any kinks. In the meantime several projects will now be under the watchful eye of the DIA to start, including the Canadian Patrol Submarine Project

• The team behind it will include an amalgamation of staff from government departments who previously shared the responsibility of defence procurement, such as PSPC, DND and the Coast Guard.

• Procurements valued at $100-million or more will go through the new procurement body, while Minor Capital Equipment projects continue under the standard system. Bleh. There is still very much reforms needed there as we outlined above. Hopefully those also come.

These are the points I wanted to highlight. You can check out the article if you want to hear more from Fuhr on his own personal thoughts, which have further calmed my worries a bit.