The Liberal government said as a Crown corporation, the agency will have more independence from government, get its own board of directors and be able to make decisions more quickly.

Bill C-40 will create an entity called the "Canadian Corporation for Defence Investment," which will report to a new junior cabinet minister role: the associate minister of national defence for procurement.

Secretary of State for Defence Procurement Stephen Fuhr said the new structure will grant the office greater authority and "operational flexibility."

"Defence procurement involves complex contracts and negotiations with some of the world's largest companies. The agency needs the talent, authorities, commercial expertise to negotiate confidently make timely decisions and to manage those relationships over decades," Fuhr said at a Tuesday news conference on Parliament Hill.

He also said this structure will help the office bring "commercial discipline" to its work in defence procurement, production and investment.

Prime Minister Mark Carney created the Defence Investment Agency, known in Ottawa as the DIA, last October to streamline defence procurement. He appointed his friend and former Royal Bank of Canada executive Doug Guzman to head it as CEO.

The agency broadly follows Carney's vision of making the government run more like a Fortune-500 company, and was created alongside other offices designed to drastically speed up the pace of the bureaucracy, such as the Major Projects Office.

The move to make the DIA a Crown corporation uses the same playbook the Carney government has used with other new initiatives, such as the new sovereign wealth fund called the Canada Strong Fund, and Build Canada Homes, a Crown corp. spun up to increase the supply of affordable housing in Canada.

But Parliamentary Budget Officer Annette Ryan warned at the House of Commons national defence committee on Monday that the new office will also introduce new problems with transparency of how public funds are spent.

She said she it will be hard to sort out whether the office is spending on behalf of National Defence or other departments.

"The ability to follow the money of what’s being done by DIA, on behalf of which ministers, in which fiscal years, and with which results, will be some of these new problems that we'll have to find new solutions for.”

That comes as the federal government looks to unleash a massive amount of spending to meet its steep NATO commitment of shelling out the equivalent of five per cent of GDP on defence by 2035. 

In a note released Tuesday, the PBO projects by 2035, Ottawa will have to spend to the tune of $163.6 billion to meet its NATO core spending pledge of 3.5 per cent of GDP.

The new legislation introduced on Tuesday grants the DIA broad abilities to bankroll defence projects, allowing the corporation to make loans or payments of up to a billion dollars out of the consolidated revenue fund, subject to ministerial approval. 

It also sets out a long list of criteria for circumstances allowing non-competitive procurements. 

For instance, the minister who ends up in charge of overseeing it can opt to sole-source a project to support a specific sector of the domestic economy. 

Equipment could also be sole-sourced under the legislation simply if it is interoperable with other things used by the Canadian military — or by any "associated government." That's a flexible list of allied countries, which could be expanded to include any country seen as being "vital to the defence of Canada."

Sole-sourcing can lead to politically fraught territory. The Opposition Conservatives are already raising alarm over the government's decision earlier this year to bypass a competitive process for new airborne early warning and control planes for the Royal Canadian Air Force.

With a majority government, however, the Carney government has a lot of room to manoeuvre in Parliament.

The new plan for the office comes as a sudden about-face from the government's previous plans. Before the summer, the Liberals announced a different strategy to make the new office into something else: a departmental agency under the control of a dedicated minister.

At the time, Fuhr defended that model over making it a Crown corporation, saying an agency would give the government more control over its spending.

"There's just a little bit more control by the government on the spending. Crowns have boards. It's just a different structure,” he told reporters on Parliament Hill in April. 

“Whether it's this government or any future government, an agency's just a better way to do it where the government has a bit more control over the agency.”

That vision was laid out in the spring economic update, put forward in Parliament in Bill C-31, legislation that is still making its way through the House. The new Bill C-40 will supersede those parts of C-31.

The new bill says the federal cabinet will decide where the new office is ultimately headquartered. Currently, it is largely run out of Ottawa, although Guzman frequently works from Toronto.

The office is currently designated as a special operating agency, but it remains a fixed part of the normal bureaucracy under Public Services and Procurement.

It has already overseen major procurement projects for the Canadian Armed Forces since the Carney government took office, including the competition to replace the Navy's aging submarine fleet, and a major contract awarded to Telesat LEO for military satellite communications services.

It's envisioned to play a central role in the government's Defence Industrial Strategy, released in February this year. The first-of-its-kind strategy is aimed at giving long-term guidance outlining how Ottawa wants to foster the domestic defence industry's growth.

This report by The Canadian Press was first published Oct. 6, 2026.

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