Ottawa to expand defence buying powers when national, economic security at stake

The progressive regime is signalling its plans to apply the fresh created Defence investment funds Agency (DIA) broad powers to ditch the routine process for the procurement of military equipment, and new authority that will extend into other areas of the economy.

The details are contained in a ways and means motion tabled before the House of Commons last week. The motion is a precursor to the tabling of the actual legislation, which will come at some point in the future.

Some of the changes involve tweaking existing laws such as the Defence Production Act, which has governed military procurement for decades, but according to the ways and mean motion summary the new legislation will expand the agency’s reach.

"Various amendments are made to expand the scope of the Defence Production Act to include purposes of national security, in addition to national defence/defence of Canada, in some provisions also including economic security,” said the motion.

If the federal government wants to suspend the normal procurement process there are currently four exceptions under existing legislation that allow that.

When passed, the new legislation will allow 14 exceptions, giving the government greater flexibility to bypass a system that has long been criticized as too cumbersome.

Included on the list of allowable exceptions are provisions to suspend the rules if the project "is warranted in order to support a sector of the Canadian economy that is important to national defence or to national security, including economic security."

Such a provision could conceivably help speed along or justify the purchase of Gripen fighters and GlobalEye surveillance planes from Swedish defence giant Saab, which has promised to bring thousands of manufacturing jobs to Canada.

The rules could also be suspended if "the contract is for the purpose of research, development or innovation in relation to defence supplies or defence services."

That could potentially be a boost for Canadian defence tech startups, which have long complained it's easier to sell their products and services to U.S. And allied countries than it is at home.

Wendy Gilmour, a Canadian and the former assistant secretary general for defence investment at NATO, said the expansion of sole-source justification was something everyone was expecting.

"The best thing is the establishment of one accountable minister for the delivery of defence materiel," Gilmour said.

There will also be a new definition of what constitutes a defence project, which will impact "residential communities, including non-military residential communities, on federal real property."

That could be significant as the Canadian military scales up base housing and builds new training centres and bases.

Along that line, the proposed legislation will move Defence Construction Canada, which is mandated to meet the infrastructure and environmental needs of the Department of National Defence and the Canadian Armed Forces, under the purview of the DIA.

Prime Minister Mark Carney’s government proposed to establish the DIA as a stand-alone entity in its recent spring economic statement, giving it a full-fledged minister independent of Public Services and Procurement Canada and "with expanded authorities" to move projects along more swiftly. 

The fiscal plan set aside $103.8 million over five years to make that happen. Federal officials were asked at the time of the statement what sort of new powers would be given to the DIA, but they declined to comment and pointed to the upcoming introduction of the legislation.

Gilmour said changing legislation is one thing, but getting the system moving is another.

There will have to be changes in policy, practice and most important, culture — a culture that has for decades "not been comfortable with risk," Gilmour said.

Senior reporter, defence and security

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