National Defence

The committee met to study the 2025-26 supplementary estimates (B) for the Department of National Defence, the Communications Security Establishment and the Canadian Coast Guard. Appearing were Minister of National Defence David McGuinty, Deputy Minister Stefanie Beck, Vice Chief of the Defence Staff Stephen Kelsey, Chief Financial Officer Jonathan Moor, Assistant Deputy Minister Heather Sheehy, Deputy Commissioner Marc Mes, and CSE Chief Caroline Xavier.

Minister McGuinty stated the $1.1 billion in additional funding, offset by transfers to other departments, supports rebuilding the military after decades of underfunding, including $476 million re-profiled for the future fighter capability project, $215 million for River-class destroyers, $59 million for domestic ammunition production, and $4.8 million for Arctic over-the-horizon radar. He emphasized the need for state-of-the-art capabilities for Arctic defence and NATO commitments, and noted the government's first defence industrial strategy will prioritize Canadian economic benefits.

Deputy Minister Beck explained that the funding helps meet contractual obligations on major projects and gives industry confidence for long-lead items, and that the department is reviewing internal decision-making alongside the new Defence Investment Agency to improve project delivery. She confirmed the north warning system is properly maintained and fully operational despite its age, and that discussions with Transport Canada about transferring personnel are ongoing but represent a tiny fraction of the overall budget.

Vice Chief Kelsey stated the 20% pay raise applies only to privates, with 13% for ranks up to lieutenant-colonel and 8% for higher ranks, and acknowledged the Canadian Forces housing differential needs continual review to ensure it does not inadvertently reduce take-home pay. He reported the force is expanding for the first time in a decade, but the army cannot currently generate a single reserve battalion meeting NATO warfighting standards, and the timeline for achieving division-scale readiness depends on sequenced investments in infrastructure, housing and instructors.

Chief Financial Officer Moor confirmed there was no additional housing funding in supplementary estimates (B), as significant funding was provided in the main estimates, and noted the $476 million and $215 million are additional payments to meet contractual or memorandum obligations, not total yearly expenditures for those programs.

Assistant Deputy Minister Sheehy explained that re-profiling between fiscal years is normal for large projects like the River-class destroyers, where funding will cover spare parts, ammunition, tools and training for new ships.

Deputy Commissioner Mes reported that the Coast Guard's integration into National Defence has been seamless operationally, and that the $12.6 million for emergency towing on the west coast extends a program that has been used 120 times since 2018 for disabled vessels, search and rescue and environmental response. He noted that under Bill C-12, the Coast Guard will be able to share information collected for safety with defence and security partners for enhanced domain awareness.

CSE Chief Xavier stated the $70 million in additional funding for CSE is primarily for cryptographic modernization to replace aging infrastructure and stay ahead of post-quantum computing threats, and that the agency works with Five Eyes partners to ensure sovereign solutions. She said the cyber-threat environment is amplified by artificial intelligence, but the $1.6 billion budget allows CSE to address this through foreign intelligence and pre-notifications to industry, while noting that private sector investment in cybersecurity is also essential.

The committee adopted a motion to postpone clause-by-clause consideration of Bill C-11 until January 2026, granting members an additional week to submit amendments, citing the inability to hear from former Supreme Court Justice Morris Fish due to technical difficulties and the unavailability of bilingual transcripts from previous meetings. A subsequent motion requesting the Department of National Defence table the full memorandum of understanding with Ontario concerning Bill C-11, in accordance with the Access to Information Act, by January 15, 2026, resulted in a tie vote, with the chair casting the deciding vote against the motion.