Defence procurement in Canada has widely been seen as “broken” for decades, and successive governments have come to power promising to fix it. Most recently, the 2025 Liberal Party election platform committed to creating a defence procurement agency, something the party had also promised in 2019 but never implemented. This time, however, the Mark Carney government has backed up its words with action and on October 2 announced the establishment of the Defence Investment Agency (DIA) as a Special Operating Agency within Public Services and Procurement Canada (PSPC). Notably, the government also announced the appointment of a government outsider, Doug Guzman (formerly Deputy Chair of the Royal Bank of Canada) as its Chief Executive Officer. Budget 2025 has now put real resources behind the commitment However, the question remains: Will the DIA finally “fix” defence procurement in Canada?
Context
Previous reform efforts in more than a decade of successive iterations of the Defence Procurement Strategy (DPS) – which was launched in 2014 by the Harper government and continued under the Trudeau regime – have all foundered on the same “rock:” too many decision-makers, each with their own policy and political mandates, perspectives, opinions and – above all – veto authorities. The DPS mostly focused on better orchestrating and disciplining deliberations within and between the multiple departments and ministers involved, which may have smoothed out some of the rougher edges of the machinery of government but could not overcome the friction, inefficiencies and obscured accountabilities inherent in the fragmented business model.
Enter the DIA, with its mandate to consolidate procurement processes, target procurements to support strategic defence industrial sectors, and engage industry partners earlier in the acquisition process. It takes a different track from the DPS by bringing personnel and work that have until now been dispersed across different organizations (Department of National Defence [DND], PSPC, Innovation, Science and Economic Development Canada [ISEDC] and sometimes others) into more integrated team collaboration structures. This will undoubtedly improve communications among team members, and so it should deliver better results for the specific acquisition projects assigned to the agency. What is less clear, however, is whether the task of reconciling competing departmental policy objectives and viewpoints will be done – and tough decisions made – largely within the Agency or continue to be wrestled out between the parent departments and ministers. If the latter, the DIA is in for a rough ride.
Another Uniquely Canadian Solution
While it may have some success, there are inherent limits to what the DIA can achieve. Canadian governments of all stripes seem to have an almost pathological aversion to “not invented here” solutions—they appear to believe that nobody else can possibly have better ideas worth considering. By creating the DIA, and placing it within PSPC rather than aligning it with DND, the government is again eschewing a well-proven, widely used business model for defence procurement that has solid foundations in international best practices. As I have previously argued, most advanced countries integrate procurement into the end-to-end life-cycle management framework for the acquisition and operational support of military capabilities. Unlike Canada, they do not treat it as a stand-alone function to be managed largely at arms-length from the activities the procurements are intended to support.
The integrated approach better ensures that decisions are taken by clearly accountable individuals and based more on lifetime cost of ownership and operational benefits criteria than short-term “get it done on time and on budget” pressures. It also enables the establishment of a more comprehensive system-level performance management framework to support continuous improvement by looking at the totality of processes and ensuring that measurement criteria are purpose-designed to support a full life-cycle perspective. This is very difficult (and expensive) to do across different management systems when there are multiple participating departments or agencies involved.
A central feature of these acquisition and support organizations is that they invariably reside within a nation’s defence portfolio, and for good reason: it is essential that their work be intimately connected to the design and creation of military capabilities and the planning and conduct of operations. That is why Australia’s Capability Acquisition and Sustainment Group, the UK’s Defence Equipment and Support organization, and many other comparable organizations are part of their respective nations’ defence ministries. Further, the scope and scale of the responsibilities involved often lead to their being overseen by a dedicated minister such as (in the Canadian context) a Secretary of State or Associate Minister of National Defence for Defence Acquisitions and Support.
Back to the Future?
The Carney government has taken a very different approach and kept the procurement function separate from DND, placing the DIA within PSPC. This may be seen by some as a simple adaptation of the successful World War II model of the Department of Munitions and Supply, but that ignores important context. Prime Minister Mackenzie King’s cabinet during that period was very much a War Cabinet, with King serving as both his own foreign minister and, effectively, defence minister. The defence portfolio itself comprised four separate ministers other than King (Minister of National Defence [MND], Associate MND, MND for Air and MND for Naval Services) and no less than five additional ministers had major responsibilities directly supporting the war effort (Munitions & Supply, National War Services, Public Works, and later in the war Reconstruction, and Veterans Affairs). Others such as the Ministers of Agriculture and Fisheries also had major contributing roles.
The sheer magnitude of the national effort to help keep Britain in the fight and to field, deploy and support Canada’s very large naval, land and air forces made it a Whole of Government effort that, throughout the war, was the primary focus of King and his entire cabinet. Everything else was secondary. That is by no means the condition facing Canada today, so the Department of Munitions and Supply model – built for the circumstances of its time – is not a useful template for Canada in the 21st Century. A different solution is needed.
The DIA in Today’s Context
The primary focus of Prime Minister Carney is, and must be, rebuilding and reorienting the nation’s economy and its global relationships. Certainly, this includes a significant effort to rebuild and strengthen the capabilities of the Canadian Armed Forces, but that is one of a number of jobs that can, and should, be delegated (with appropriate strategic guidance and oversight) to a single minister with the responsibility and authority to achieve results.
The DIA does not do this, and instead essentially preserves the previous complex business model for defence procurement, with DND still defining what needs to be procured, the DIA within PSPC executing procurements, and personnel from those two as well as other departments brought together into teams to negotiate how – and in what direction – to proceed. Responsibilities and authorities remain muddled and divided among at least three individuals: the MND; the Minister of Transformation, Public Works and Procurement; and the Secretary of State for Defence Procurement.
Conclusion
Replacing one set of fragmented ministerial accountabilities with a different set does little to address the fundamental flaw that undermined the DPS and every reform effort that preceded it: whenever two or more people are in charge of something, then no one is in charge of it. Decision-making is always a protracted exercise in negotiation and nobody is accountable for results – good or bad.
As such, the DIA represents little more than a modest evolution from previous failed defence procurement reform efforts and we should not expect materially different outcomes from it. The sooner the government realizes this, the better. It can then begin to evolve its business model towards a more effective and durable “fix” based on the well-proven integrated defence capability acquisition and support concept that has been adopted by so many other countries.
The views expressed in this op-ed are the author’s/authors’ own and do not necessarily represent those of the Institute or its staff.
Colonel Charles Davies (Retired) served for 42 years in National Defence, including four years as the strategic planning director for DND’s Materiel Group and 3 years as senior director responsible for defence materiel acquisition and support policies, business processes and standards. He is also a former chair of NATO’s Life Cycle Management Group. He is a Senior Fellow of the CDA Institute and the author of True North Strong? A Canadian Citizen’s Guide to National Defence.
