Canada is moving to give its Defence Investment Agency greater independence and commercial flexibility as Ottawa seeks to accelerate military procurement, strengthen domestic industrial capacity and reinforce Canadian sovereignty.

Introduced on October 6, Bill C-40, Strengthening Canada’s Defence Sector, would establish the Defence Investment Agency (DIA) as a Crown corporation within the National Defence portfolio. The change is intended to give the agency greater authority, specialized expertise and operational flexibility to move defence projects from requirement to delivery more quickly.

The legislation builds on the creation of the DIA in October 2025, when the federal government established the agency to overhaul and streamline defence procurement. Its expanded mandate would connect military requirements more closely with procurement, defence production and investment while using growing defence expenditures to strengthen Canadian supply chains and sovereign capabilities.

“Canada is making a generational investment in our defence and security, and we need institutions built to match the scale and urgency of that ambition. Establishing the Defence Investment Agency as a Crown corporation would give it the flexibility and specialized expertise to move faster, make strategic investments and deliver the capabilities our Armed Forces need. Just as importantly, it would allow us to use our defence investments to strengthen our sovereignty while building a robust Canadian defence industry, attracting investment and creating lasting economic opportunities and good jobs here at home,” said the Honourable Stephen Fuhr, Secretary of State (Defence Procurement).

Under Bill C-40, the new Crown corporation would formally be created as the Canadian Corporation for Defence Investment while continuing to operate under the Defence Investment Agency name. It would have its own Board of Directors, greater independence and expanded authority to negotiate and manage contracts.

The DIA would be empowered to undertake defence production, procurement and investment activities based on operational priorities, capability requirements and acceptance criteria established by National Defence and the Canadian Armed Forces. Government oversight would remain in place, with the agency accountable to Parliament and the federal government.

The legislation would also amend the National Defence Act to create an Associate Minister of National Defence for Procurement. The new position would be responsible to Parliament for the DIA, consolidate procurement and commercial authorities, and strengthen accountability for procurement delivery across the National Defence portfolio.

“We look forward to continued collaboration with the Defence Investment Agency to further strengthen defence procurement. As a Crown corporation within the National Defence portfolio, the DIA will have the direct authorities and added flexibility to streamline procurement so that the Canadian Armed Forces and Canadian Coast Guard have more secure, reliable and quicker access to the capabilities they need to protect our sovereignty and keep Canadians safe,” said the Honourable David J. McGuinty, Minister of National Defence.

Beyond speeding acquisitions, the proposed structure places Canadian industrial development at the centre of the DIA’s mandate. Defence investment would be used to strengthen domestic production, secure critical supply chains, encourage innovation and build sovereign capacity while attracting additional investment to Canada’s defence sector.

“In a more dangerous and divided world, Canada is taking action and establishing a clear and compelling path forward. With the introduction of this legislation, we are making clear that large-scale, agile defence production and procurement is here to stay. Procurement and investment must live together, by connecting the capabilities our armed forces need with the investments that will deliver them and the industrial capacity that will sustain them. As a Crown corporation, the Defence Investment Agency will integrate these priorities, delivering critical capabilities to our armed forces more efficiently while strengthening Canadian industry, driving innovation and creating economic opportunity for years to come,” said the Honourable Joël Lightbound, Minister of Government Transformation, Public Works and Procurement and Quebec Lieutenant.

The DIA would also continue working with allies and security partners on joint procurement programs, including initiatives connected to Canada’s participation in Security Action for Europe (SAFE) and Readiness 2030. The government expects greater international collaboration to improve interoperability, give Canadian suppliers increased access to allied markets and supply chains, and create opportunities to capitalize on economies of scale.

For DIA Chief Executive Officer Doug Guzman, the proposed transition represents the next stage in building an organization capable of translating Canada’s increased defence spending into military and industrial results.

“Establishing the Defence Investment Agency as a Crown corporation is an important step in building the organization Canada needs to meet today’s defence and security challenges. It will give the DIA the tools, flexibility, and expertise to move faster and make strategic investments that deliver capabilities for the Canadian Armed Forces and the Canadian Coast Guard. Our responsibility will be to turn Canada’s defence investments into results, strengthening our industrial base, building sovereign capacity, deepening partnerships with industry, and creating economic opportunities at home. I am proud of what the DIA team has accomplished since our launch, and I look forward to leading this transition and the organization’s next chapter.”

If passed, Bill C-40 would mark a significant structural change in Canada’s approach to defence procurement, bringing procurement, investment and industrial capacity more closely together as Ottawa works to equip the Canadian Armed Forces while expanding the country’s domestic defence capabilities.