New agency launched to speed Canadian military procurement, reconsider U.S. purchases

The Liberal government launched a new agency Thursday aimed at speeding military procurement.

The Defence Investment Agency is promising to “rebuild, rearm, and reinvest in the Canadian Armed Forces faster,” according to a statement from Prime Minister Mark Carney’s office.

“The goal or aim of this agency is to equip the Canadian Armed Forces with the tools and equipment they need at the speed of relevance, bringing Canadian industry into the tent to stimulate our own economy and to create good paying jobs for Canadians,” Stephen Fuhr, the secretary of state in charge of defence procurement, told reporters Thursday.

According to Carney’s office, the new “agency will align Canada more closely with partners such as the United Kingdom, Australia, and France, who already have dedicated procurement bodies, making joint defence purchases and partnerships easier and more efficient.”

Fuhr, a former Royal Canadian Air Force pilot, pointed out that Canada had 220 small- and medium-sized enterprises at a recent defence trade show in England.

“I want to make sure that our capacity and capability … to deliver outside our own borders is well-understood and leveraged where it can be,” Fuhr said.

He indicated Canada will still buy military equipment from the United States.

“But we’re not going to be spending 75 cents of our dollar south; we’ll be amortizing that money out in Canada where we can, and then spending it in other places where we have to,” Fuhr said.

He couldn’t “nail down a target” for how much the new agency plans to spend in the U.S.

President Donald Trump’s ongoing trade war and musings about turning Canada into the 51st state have rattled many in this country.

“There are some systems that we will just have to buy from the U.S.,” Fuhr said. “We’re not abandoning that relationship. It’s going to change and we’re going amortize or diversify ourselves in ways that meet the moment, and that’s not having all our eggs in one basket, whether it be the U.S. or anybody else.”

Defence analyst Ken Hansen said the new agency has the potential to speed military procurement in Canada.

“The prime minister is surging forward with this very aggressively,” said Hansen, a former naval commander.

“I’m just amazed at what an energizer bunny he seems to be.”

The largest advantage it offers “will be diversification for the sake of security of supply,” Hansen said.

“But also, the non-American partners seem to be much more interested in sharing technology instead of holding on to intellectual properties.”

The agency’s first purchase should be weapons that can defend against drones, he said, which have changed the modern face of warfare in Russia’s invasion of Ukraine.

“Absolutely the most pressing thing is tactical ground close-range air defence against drones,” Hansen said. “That is clearly in my mind, the biggest immediate need.”

Germany and Australia have demonstrated a “very sophisticated (light armoured vehicle) mounted gun system that shoots 30-millimetre rounds,” he said.

“They can saturate the air with exploding steel pellets to take out flying objects.”

The ammunition can be changed to take out bunkers or moving vehicles, Hansen said. “It’s incredibly effective and flexible tactical fire that seems to be the need.”

The new procurement agency will only deal with projects over $100 million.

It will be staffed with people from the purchasing branch of National Defence, Public Services and Procurement Canada, and the Coast Guard.

“This isn’t another layer of anything,” Fuhr said.

“We’re porting resources from three departments into this agency, right, so there’s no extra. This is a single point of accountability. So, on Day 1, fragmented oversight is now gone.”

Fuhr called the launch of the new agency “a step change” in the way Canada handles military procurement.

“It requires a major machinery of government change,” he said. “Everyone, even the opposition, over years of talking about this, everyone thinks it’s a good idea, but when you go to these departments to ask for their people, their authorities and their resources, often times they go, ‘Hey, just a second here, we kind of like it the way it was.’ That was kind of my experience.”

The prime minister announced the appointment Thursday of Doug Guzman, a former deputy chair at the Royal Bank of Canada, as the new agency’s chief executive officer.

“Mr. Guzman brings three decades of experience in investment and finance, including leadership roles at RBC and Goldman Sachs,” said the statement from Carney’s office.

“His expertise in capital allocation, project execution, and large financial projects will be instrumental in accelerating procurement and growing our defence industrial base.”

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