Canada Introduces Bill C-40 to Transform Defence Investment Agency into Crown Corporation
On October 6, 2026, the Government of Canada introduced Bill C-40 to establish the Defence Investment Agency as a Crown corporation named the Canadian Corporation for Defence Investment. The legislation aims to accelerate defence procurement and strengthen domestic industry, building on recent contracts with companies including Colt Canada, Saab, Thyssenkrupp Marine Systems, BAE Systems Australia, Telesat, and General Dynamics Land Systems-Canada.
OTTAWA — The Government of Canada introduced Bill C-40: Strengthening Canada’s Defence Sector on October 6, 2026, in Ottawa, Ontario. The legislation proposes establishing the Defence Investment Agency (DIA) as a Crown corporation operating under the legal name "Canadian Corporation for Defence Investment." The DIA will operate within the National Defence portfolio.
The DIA was originally created in October 2025 as a Special Operating Agency within Public Services and Procurement Canada. Under the proposed legislation, its transition to a Crown corporation would grant it its own board of directors, greater independence, and expanded commercial authority to manage defence-related investments, procurement, and production activities. The agency is currently led by Chief Executive Officer Doug Guzman.
Once established, the DIA will report to a newly created position titled the Associate Minister of National Defence for Procurement. Responsibility for the Defence Production Act, however, will remain with the Minister of Public Services and Procurement rather than transferring to the new corporation. Key government officials involved in the broader defence and procurement landscape include David J. McGuinty, Minister of National Defence; Stephen Fuhr, Secretary of State (Defence Procurement); and Joël Lightbound, Minister of Government Transformation, Public Works and Procurement and Quebec Lieutenant.
Bill C-40 builds upon Canada’s first Defence Industrial Strategy (DIS), which the Prime Minister launched on February 17, 2026. The legislative change follows a series of major procurement agreements intended to strengthen domestic industrial capacity, supply chains, and Canadian sovereignty, particularly in the Arctic.
Recent defence contracts highlighted alongside the bill's introduction include:
- Colt Canada was awarded the contract for the Canadian Modular Assault Rifle, committing to at least 80 per cent Canadian content.
- Saab was selected as the preferred supplier for the Airborne Early Warning and Control (AEWC) capability, a project projected to support 3,000 jobs in the Canadian aerospace and defence sector.
- Thyssenkrupp Marine Systems (TKMS) of Germany was selected as the preferred supplier for up to 12 submarines under the Canadian Patrol Submarine Project (CPSP).
- Formal agreements were entered into with Australia and BAE Systems Australia for the Over the Horizon Radar (A-OTHR) program. This initiative is estimated to contribute close to $290 million annually to GDP and support approximately 2,270 jobs annually from 2026 to 2033.
- Telesat LEO ULC was awarded a contract for the Enhanced Satellite Communications Project – Polar (ESCP-P), which has the potential to create or maintain 2,600 jobs annually and contribute $335 million annually to GDP over seven years.
- General Dynamics Land Systems-Canada (GDLS-Canada) secured a partnership to build 190 additional Armoured Combat Support Vehicles (ACSVs). This expands the existing fleet from 360 to 550 vehicles and is expected to create or sustain more than 6,000 high-paying jobs annually over eight years, involving over 600 Canadian suppliers.
The transformation of the DIA into a Crown corporation is designed to reduce administrative burden and fragmentation while accelerating defence procurement decision-making.