October 6, 2026 - Ottawa, Ontario
The world is more dangerous and divided. The international rules-based order is fading, and global conflict rages on. Canada’s Government is focused on what we can control: rebuilding, rearming, and reinvesting in the Canadian Armed Forces (CAF). In October 2025, Canada’s new government established the Defence Investment Agency (DIA) to overhaul and streamline our defence procurement. Since then, the DIA has facilitated key purchases that strengthen Canada’s strategic autonomy. In a rapidly changing world, Canada must move quicker to keep Canadians safe.
That is why, today, the Government of Canada introduced Bill C-40: Strengthening Canada’s Defence Sector, to establish the DIA as a Crown corporation. This reform will provide the DIA with the authorities, operational flexibility, specialized expertise and organizational structure needed to deliver critical capabilities quicker. The DIA will have greater commercial flexibility and more autonomous approvals, allowing it to work better with industry and deliver better value for money. It will maximise Canada’s generational defence investments to strengthen our industrial base, supply chains, and sovereign capabilities.
This legislation:
Creates the Canadian Corporation for Defence Investment, which will continue to operate under its existing name, the Defence Investment Agency. It will have more independence, its own Board of Directors, and greater authority to negotiate and manage contracts;
Empowers the DIA to engage in defence production, procurement, and investment activities in support of national defence and the operational priorities, capability requirements and acceptance criteria established by the National Defence (DND) and the Canadian Armed Forces (CAF);
Maintains the Government of Canada’s oversight of the new Crown Corporation;
Amends the National Defence Act to create an Associate Minister of National Defence for Procurement, who will be responsible to Parliament for the DIA, consolidate procurement and commercial authorities and strengthen accountability for procurement delivery within the National Defence portfolio, and
Integrates the DIA with the National Defence portfolio to further reduce red tape that slows procurement down and ensures that defence procurement in Canada is focused on equipping the National Defence and CAF with the tools they need to defend Canada.
Bill C-40: Strengthening Canada’s Defence Sector represents the next step in the Government of Canada’s modernization and transformation of Canadian defence procurement.
The DIA was launched to accelerate procurement and use defence spending to strengthen Canadian industry, build sovereign capabilities, and catalysing investment in the Canadian defence sector. As a Crown corporation it will have the commercial tools to deliver on its mandate. It will support Canada’s security and long-term economic growth, while remaining accountable to Parliament, and the Government of Canada.
The DIA will continue to strengthen Canada’s ability to work with allies and security partners. The Corporation would support joint defence procurement programs, including initiatives aligned with Canada’s participation in Security Action for Europe (SAFE) and Readiness 2030. Greater international collaboration will improve interoperability, provide Canadian suppliers with greater access to allied markets and supply chains, capitalize on economies of scale, and support Canada’s broader security and diplomatic objectives.
Canada is making generation investments to transform our defence sector. Empowered as a Crown corporation, the DIA will harness defence investment to catalyse industry, secure critical supply chains, and drive innovation and investment. In a rapidly changing world Canada’s government is building a stronger, more self-reliant country. One that is fully ready for the future. One that guarantees Canadians have tools needed to protect our country.
Quotes
“Canada is making a generational investment in our defence and security, and we need institutions built to match the scale and urgency of that ambition. Establishing the Defence Investment Agency as a Crown corporation would give it the flexibility and specialized expertise to move faster, make strategic investments and deliver the capabilities our Armed Forces need. Just as importantly, it would allow us to use our defence investments to strengthen our sovereignty while building a robust Canadian defence industry, attracting investment and creating lasting economic opportunities and good jobs here at home.”
The Honourable Stephen Fuhr
Secretary of State (Defence Procurement)
“We look forward to continued collaboration with the Defence Investment Agency to further strengthen defence procurement. As a Crown corporation within the National Defence portfolio, the DIA will have the direct authorities and added flexibility to streamline procurement so that the Canadian Armed Forces and Canadian Coast Guard have more secure, reliable and quicker access to the capabilities they need to protect our sovereignty and keep Canadians safe.”
The Honourable David J. McGuinty
Minister of National Defence
“In a more dangerous and divided world, Canada is taking action and establishing a clear and compelling path forward. With the introduction of this legislation, we are making clear that large-scale, agile defence production and procurement is here to stay. Procurement and investment must live together, by connecting the capabilities our armed forces need with the investments that will deliver them and the industrial capacity that will sustain them. As a Crown corporation, the Defence Investment Agency will integrate these priorities, delivering critical capabilities to our armed forces more efficiently while strengthening Canadian industry, driving innovation and creating economic opportunity for years to come.”
The Honourable Joël Lightbound
Minister of Government Transformation, Public Works and Procurement and Quebec Lieutenant
“Establishing the Defence Investment Agency as a Crown corporation is an important step in building the organization Canada needs to meet today’s defence and security challenges. It will give the DIA the tools, flexibility, and expertise to move faster and make strategic investments that deliver capabilities for the Canadian Armed Forces and the Canadian Coast Guard. Our responsibility will be to turn Canada’s defence investments into results, strengthening our industrial base, building sovereign capacity, deepening partnerships with industry, and creating economic opportunities at home. I am proud of what the DIA team has accomplished since our launch, and I look forward to leading this transition and the organization’s next chapter.”
Doug Guzman
Chief Executive Officer, Defence Investment Agency
Quick facts
The DIA was initially established as a Special Operating Agency within Public Services and Procurement Canada, allowing the organization to begin operations while the Government of Canada developed its longer-term organizational model.
Establishing the DIA as a Crown corporation within the National Defence portfolio is intended reduce handoffs, consolidate procurement and commercial authorities and strengthen accountability for procurement delivery.
By consolidating responsibility and expertise within one organization, the DIA will reduce duplication, streamline decision-making, and accelerate procurement from validated requirement definition to contract award, while DND, the CAF and the CCG retain responsibility for defining capability requirements, operational priorities and acceptance criteria.
The DIA is a central delivery partner for Canada’s Defence Industrial Strategy and its Build–Partner–Buy approach to defence procurement.
The proposed Corporation will be accountable to the Government of Canada through a responsible Minister and subject to legislated governance, financial, audit, reporting and parliamentary oversight requirements.
Introduction of legislation to strengthen Canada’s Defence Sector
Bill C-40: Strengthening Canada’s Defence Sector proposes to establish the Defence Investment Agency (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 the National Defence and the Canadian Armed Forces (CAF). By bringing these functions together under a single organization with clear and centralized accountability, the DIA will be positioned to make decisions more quickly, reduce fragmentation, and provide greater continuity and predictability across defence acquisitions.
Legislative Changes
The draft legislation proposes to establish the Canadian Corporation for Defence Investment, the legal name for the DIA. 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 new model is intended to clarify responsibilities and reduce unnecessary hand-offs, while building on the expertise that already exists across the federal defence procurement system. The National Defence and the CAF will continue to define military capability requirements, operational priorities and acceptance criteria, and the DIA will focus on translating those requirements into procurement, production and investment activities.
Unlike Bill C31, the proposed legislation would change the DIA from a government agency into a Crown corporation. As a Crown corporation, the DIA would have more independence, its own board of directors, and greater authority to manage defence-related investments, procurement, and production activities. The Minister responsible for the DIA would still provide strategic direction and oversight, while the government would retain certain approval powers. The proposal also keeps responsibility for the Defence Production Act with the Minister of Public Services and Procurement, rather than transferring it to the DIA. Overall, the bill would give the DIA more operational flexibility while maintaining government accountability and oversight.
A Crown corporation is best positioned to help defend Canada’s sovereignty by acquiring critical capabilities, while helping build and sustain the domestic industrial capacity needed to support them. It can act more quickly and operate with greater commercial flexibility because it is not subject to the same layers of approvals. That flexibility allows it to negotiate and manage contracts using commercial practices that are more familiar to industry, improving access to suppliers, reducing administrative burden, and delivering better value for money, while remaining accountable to Parliament through an Associate Minister of National Defence for Procurement.
Evolving needs
Created in October 2025 as a Special Operating Agency within Public Services and Procurement Canada, the DIA was given the mandate to overhaul and streamline Canada’s defence procurement, while building domestic manufacturing and supply chains by levering procurement as investments.
On February 17th, 2026, the Prime Minister launched Canada’s first Defence Industrial Strategy (DIS), a long‑term plan to strengthen national security and economic growth by building a strong, sustainable domestic defence industry. The DIA plays a central role in the delivery of the DIS and its build-partner-buy framework.
Under the Defence Industrial Strategy, the Government has already delivered for Canadians through the following partnerships and procurements:
The Canadian Modular Assault Rifle contract award to Colt Canada to replace aging CAF rifles. Colt Canada committed to at least 80 per cent Canadian content, supporting domestic suppliers and jobs.
The selection of Saab as the preferred supplier for discussions on the Airborne Early Warning and Control (AEWC) capability. The capability would strengthen Canada’s contributions to the North American Aerospace Defence Command (NORAD) and improve operational reach in remote regions. The platform would be built on Bombardier’s Global 6500. This is projected to support 3,000 jobs in the Canadian aerospace and defence sector – from the skilled trades to engineering and compute – opening massive opportunities for Canadian workers
The selection of Thyssenkrupp Marine Systems (TKMS) of Germany as the preferred supplier for Canada’s next-generation submarine fleet under the Canadian Patrol Submarine Project (CPSP). The government is in negotiations with TKMS for the acquisition of up to 12 submarines, which will enhance our interoperable capabilities with NATO and deliver jobs and economic value to Canada through our Industrial and Technological Benefits (ITB) policy.
Entering into formal agreements with Australia and BAE Systems Australia to acquire an Over the Horizon Radar capability for the A-OTHR program to protect Canada’s Arctic. The A-OTHR project is estimated to contribute close to $290 million annually to Canada’s gross domestic product and support approximately 2,270 jobs annually in the Canadian economy during the 2026 to 2033 period.
A contract award to Telesat LEO ULC (Telesat) to deliver the military Enhanced Satellite Communications Project – Polar (ESCP-P). This will help defend Canadian sovereignty in the Arctic by delivering the first phase of next-generation military satellite communications capabilities for the Canadian Armed Forces (CAF). This project is leveraging Canadian industry expertise to create high-quality jobs across the country, while unlocking a multi-billion-dollar investment in Canada’s defence sector. ESCP has the potential to create or maintain 2,600 jobs annually across Canada and contribute $335 million annually to Canada’s gross domestic product (GDP) over approximately seven years.
A new strategic partnership with General Dynamics Land Systems-Canada (GDLS-Canada) to build and deliver 190 additional Armoured Combat Support Vehicles (ACSVs). This will expand Canada’s fleet from 360 to 550 vehicles, giving our troops the equipment they need to protect Canadians and support our allies. This partnership is expected to create or sustain more than 6,000 high-paying jobs across Canada every year over the next eight years. The work carried out at GDLS-Canada draws on more than 600 Canadian suppliers, in over 100 communities across the country. This partnership will strengthen our sovereign supply chain and generate lasting benefits to workers and communities across the country.
While the Special Operating Agency model has proven its value by providing greater flexibility within government and enabling a significant acceleration of defence procurement, a Crown corporation would provide the next level of agility needed to meet Canada’s current defence and security challenges.
In a rapidly evolving security and economic environment, meeting the moment requires institutions that can adapt to changing realities. The Crown corporation model provides the tools, authorities, and operational flexibility needed to deliver capabilities faster, strengthen Canada’s defence industrial base, and better support the National Defence and the Canadian Armed Forces.
Most importantly, a Crown corporation can bring together procurement and strategic investment more efficiently under a single mandate. This allows Canada not only to acquire critical capabilities, but also to help build and sustain the industrial capacity needed to support them.
Noah Note: We don't have the full legislation available as of writing, so we can't fully discuss what changes are being made in details. There was a lot of debate iver the summer to what the DIA needed to achieve its results, and that direction shifted from an agency, with an obrrpowering minister to a proper Crown Corporation where the power is primary vested in the organization, and the Minister moves to strategic direction and oversight.
That was something that did come up, as I know it, a lot. Who gets authorities? Who maintains primary direction and decision making authority? Bill C-31 put a lot into the future Defence Procurement minister, creating an enviornment, that several thought, was overly dependent and tied to a single individual over the DIA itself. This move shifts that back to the organization as a whole and CEO Doug Guzman, though the extent of which we have to see.
PSPC also maintains a win here, having kept the DPA in it's orbit over moving it to the DIA. Beyond that? It is currently up in the open to what this new legislation means. What authorities look like, how much reach the DIA has to influence Industry, Procuring on behalf of allies, whether DIA rules still override sections 41–42 of the Financial Administration Act and the PSPC Act, the $1B standing authority from the Consolidated Revenue Fund, etc are still in the open right now.
Is this a stripping of the DIA power and authorities compared to Bill C-31? I don't think so, not in the authorities. What changes is who maintains thay authorities, and how much independence the DIA as an organization has to operate on it's authority. Again, I am gonna wait to see the text of the legislation before going into things.
Finally they realized that the practical, executional, optical and cultural constraints of being tied to PSPC would make the concept of delivering with urgency a non starter. I made comments pertaining to this issue many times and wrote to my MP who is on the Defence and Security Committee. Congrats to all. You’ll still need to have sharp pencils for your TB submissions but you’ll be out of shouting distance from the PSPC naysayers who always complained aloud why DND/CAF ever needed such a budget because “you’ll never spend it”. Meaning, we’ll put up so many enquiries over the year that you’ll never get to spend your FY allocation (and sent back to general revenue to be either shown as surplus or used by other departments for their over budget projects that need quick influxes of revenue). Hopefully these days are over and that we hear when the DIA physically moves out of PSPC.
This is a big one. I hope that it makes its way through Parliament in an orderly manner and finds broad support.