The House of Commons National Defence Committee met to study defence procurement reform, with a focus on the newly created Defence Investment Agency. Appearing were Secretary of State for Defence Procurement Stephen Fuhr, along with Paula Folkes, Associate Assistant Deputy Minister at Public Services and Procurement Canada, and Arianne Reza, Deputy Minister of Public Works and Government Services.
Secretary Fuhr testified that the Defence Investment Agency, established as a special operating agency within Public Services and Procurement Canada, consolidates procurement functions from multiple departments into a single point of accountability to speed up acquisitions. He said the agency reflects recommendations from the committee’s 2024 report and will align with a forthcoming defence industrial strategy to support Canadian industry. He emphasized that the agency will reduce duplication, simplify processes for small and medium-sized enterprises, and allow for faster decision-making by centralizing expertise, and he noted that the government is committed to increasing defence spending to 2% of GDP by the end of the fiscal year.
Paula Folkes explained that the agency will prioritize purchasing equipment already in use by allies, which can save over a year by avoiding the need for detailed, 1,000-page statements of work from client departments. She said the agency will work more closely with industry and capital markets to finance investments in Canadian supply chains and develop export strategies, representing a new long-term investment approach that will attract private sector participation.
Arianne Reza clarified that the agency will be implemented in two phases, initially residing within PSPC while drawing personnel from PSPC, DND and ISED. She said the agency will offer a “concierge service” through regional offices to help small and medium-sized enterprises register, compete and forecast contracting opportunities, and will work to match their skills with large defence suppliers’ supply chain needs.
On the F-35 program, Secretary Fuhr repeatedly stated that the program is under review but that nothing has been stopped or delayed, and that no decision has been made on changing the current plan. He disagreed with suggestions that the review is redundant or that costs have risen due to delays, saying the program continues as designed and that the review will take the time needed to make the right decision. He also noted that the F-35 was chosen in a competition but was not the only compliant bidder.
Regarding the new agency’s CEO, Doug Guzman, Secretary Fuhr said his compensation package follows Treasury Board tables set in 2000 and is comparable to past appointments, and that Guzman took a significant pay cut to serve. He stated that Guzman reports to him as the elected official responsible, and that Guzman’s expertise in delivering large capital projects complements his own military background. He committed to providing the committee with information on whether Guzman has filed conflict-of-interest disclosures.
On submarines, Secretary Fuhr said the government has downselected to two bidders for a potential 12-submarine purchase, with a public timeline for a contract award in 2028 and delivery by 2035, which he hopes to accelerate. He emphasized that Canadian companies like Marmen and CAE will be integrated into in-service support and manufacturing without modifying the submarine design, to avoid delays.
On international engagement, Secretary Fuhr said he promotes Canadian shipbuilding capacity, particularly for icebreakers, to allied nations whose vessels are aging, and that Canada is diversifying its defence spending among multiple allies rather than relying solely on the United States.
On the cancelled Armatec contract to refurbish light armoured vehicles for Ukraine, Secretary Fuhr said he did not know the details, as it falls under the military assistance coordination centre within DND, not his mandate.
The committee did not debate any motions or procedural matters during this meeting.
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