Prime Minister Mark Carney addresses troops at the Adazi Military base in Latvia in August. The goverment says it will spend an additional $81.8-billion over the next five years on defence.Christinne Muschi/The Canadian Press
Jeffrey F. Collins is an assistant professor of political science at the University of Prince Edward Island. He is author of the 2024 book Canada’s Defence Procurement Woes.
In Tuesday’s budget, the government said it would spend an additional $81.8-billion over the next five years on defence. More than half of this sum will go to repairing existing capabilities, expanding new fleets of equipment and bolstering digital infrastructure.
More likely than not it will be Prime Minister Mark Carney’s new stand-alone Defence Investment Agency, or DIA, that will be responsible for turning the bigger items – projects costing more than $100-million – into tangible outcomes. This could turn out to be a problem.
Tasked with consolidating procurement processes across departments, aligning new projects with certain “strategic defence sectors” and facilitating early Canadian Armed Forces engagement with industry, the agency represents the largest defence bureaucratic shakeup in six decades.
To say the government’s expectations are high is an understatement. The Prime Minister posits the agency as “supercharging innovation” in aerospace, shipbuilding and advanced manufacturing.
House of Commons to hold first confidence vote tied to budget
It’s possible the DIA can achieve its trifecta of goals. But getting the agency to ensure its directive bears fruit and does not represent more headaches for the military, industry and taxpayers alike requires sorting out a tangly web of competing processes and departmental mandates.
At the top of that list is the National Shipbuilding Strategy, or NSS. In place since 2010 and led by Public Services and Procurement Canada, or PSPC, the NSS is the mechanism for co-ordinating and overseeing naval and coast guard shipbuilding projects across the country.
The NSS is tackling some the largest and most complex public (military or civilian) procurement projects in Canadian history, including the fifteen warship River-class destroyers. Final costs for the destroyers are not yet known but the first three ships are expected to come in at over $22-billion. That’s almost as much as the entire F-35 jet fighter project.
The challenge is sorting out whether the NSS’s now well-established and operating governance structures will be duplicated or absorbed into the DIA. Clarification is needed sooner rather than later as the agency is entrusted with acquiring a dozen new submarines. Likewise, the government is expected to produce a defence industrial strategy, “in the coming months” according to the budget.
Secretary of State Stephen Fuhr after a news conference regarding the Defence Investment Agency in the House of Commons on Oct. 2.Sean Kilpatrick/The Canadian Press
The aim of the defence industrial strategy is, at this stage, to rebuild domestic production capacity, grow the defence industrial base and strengthen Canada’s defence supply chains in areas such as critical commodities, aerospace and AI. The problem? The strategy lays with a separate department, the Department of National Defence, and not the DIA.
This dilemma is seen again with the agency reporting to PSPC and not National Defence and the CAF – that is, the very people who use, maintain and sustain the equipment being sought.
At first glance, the intended approach leaves in place the multi-departmental model it seeks to replace and puts Canada offside from the very allies the government cited as its model – Australia, France and Britain. No explanation has been provided as to why this is the case.
This same concern applies to the Industrial and Technological Benefits policy, which currently still lies with another department, Innovation, Science and Economic Development Canada. Existing in various guises since the 1980s, this policy requires successful contractors to undertake business activities in Canada equivalent to the value of the contract.
The budget, in contrast, stipulates that the DIA will engage in very similar behaviour – approving projects that support strategic defence sectors, grow the economy, and support innovation in aerospace, shipbuilding and advanced manufacturing.
These may seem like mundane issues but tackling them gets to the heart of what is being sought in the DIA reforms. If the result is simply a papering over of a process that is at the heart of so many delays, waste and mistrust then the country is no further ahead.