Ottawa moves to turn the Defence Investment Agency into a Crown corporation to speed military buying

The federal government plans to turn its year-old Defence Investment Agency into a Crown corporation, a move meant to speed up military purchases by giving the agency and its chief executive far more independence from the usual machinery of government. Two federal sources told CBC News about the plan, and three sources told The Globe and Mail that legislation from Procurement Minister Joël Lightbound includes measures to make the agency a Crown corporation, with two of them saying the bill would be tabled in the House of Commons on Tuesday.

Lightbound put a bill titled “An Act respecting production, procurement and investment in relation to national defence and national security” on the Commons notice paper on Friday, The Canadian Press reported. Three sources told the Globe the bill would also set out the duties of a new minister of defence procurement, a cabinet post the government said in April it planned to create. The Prime Minister’s Office told the Globe it would not comment on legislation not yet tabled. The agency has scheduled a background technical briefing for accredited Parliamentary Press Gallery members at 11:30 a.m. ET Tuesday on “new legislation aimed at supporting defence production, procurement and investment,” according to a media advisory, and CBC said Defence Minister David McGuinty and Secretary of State for Defence Procurement Stephen Fuhr were scheduled to take questions the same day.

Prime Minister Mark Carney launched the agency on Oct. 2, 2025, promising to consolidate a procurement system his office described as “fragmented across several departments” and slow, and to tie military purchases more closely to Canadian industry, according to the Prime Minister’s Office. He named Doug Guzman, a former deputy chair of the Royal Bank of Canada, as chief executive. The agency handles purchases worth $100 million or more, the Globe reported, and has so far operated as a special agency within Public Services and Procurement Canada.

As a Crown corporation, the agency could have its own board, chief executive, corporate plan and workforce, CBC reported, though details have not been released. Its sources said it would likely report to an associate minister of defence for public accountability. Philippe Lagassé, a Carleton University defence procurement expert, told CBC the change “could reduce the bureaucratic processes involved with multiple departments and central agencies, notably the federal Treasury Board,” and could make the agency the contracting agent for the Department of National Defence and the Canadian Armed Forces, much as Defence Construction Canada operates today.

The trade-off is oversight. “That also means that fewer ministers would have their say over major projects involving large amounts of taxpayer money,” Lagassé told CBC, adding that ministers would still answer for the corporation in Parliament but “would not be as directly accountable.” He told the Globe the model “basically keeps politicians at a greater distance.” Lagassé also flagged possible tension between meeting the military’s technical requirements and any mandate to grow Canada’s defence industrial base.

The plan goes beyond legislation already before Parliament. CBC noted that a bill giving the agency broader powers to bypass the decades-old procurement system was introduced in the spring and has yet to pass. That proposal would raise the number of exceptions allowing Ottawa to set aside normal procurement rules from four to as many as 14, including purchases deemed in the national interest, and made economic security a pillar of the agency’s mandate. Bill C-31, the Budget 2025 Implementation Act, No. 2, would also create a Defence Investment Agency Act and amend the Defence Production Act, including letting the designated minister spend up to $1 billion on stockpiling, financial assistance and defence procurement, according to an analysis by the law firm BLG. How those powers would carry over to a Crown corporation is unclear.

The overhaul comes as Ottawa pursues the largest increase in defence spending in more than 70 years and works toward NATO’s target of devoting five per cent of GDP to defence. Guzman, whom the Globe described as a close personal friend of Carney’s, played a key role in the government’s July decision to buy up to 12 submarines from Germany’s TKMS. In a Sept. 13 e-mail to staff, he said he intended to stay on as CEO despite reports he was frustrated and ready to leave.

Dozens of federal Crown corporations already operate at arm’s length from government while answering to Parliament through a designated minister; Via Rail reports through the transport minister and Export Development Canada through the international trade minister, the Globe noted. Many defence experts see operational independence as the biggest advantage of the change, CBC reported, though Lagassé said questions about accountability and transparency will have to be addressed.

Sources: CBC News; The Globe and Mail; The Canadian Press via Canada’s National Observer; Prime Minister’s Office (Oct. 2, 2025); Defence Investment Agency media advisory; BLG analysis of Bill C-31.