Ottawa is proposing to spin off Canada’s new defence procurement agency into a separate standalone Crown corporation as part of a push to streamline purchasing decisions.

The federal Liberals on Tuesday tabled long-awaited legislation establishing the corporate structure of the Defence Investment Agency, which has been operating as a special arm of the procurement department since it was created shortly after the 2025 election.

The body was created to help improve and speed up purchases as Canada races to increase defence spending to meet the NATO target of 5 per cent of GDP by 2035. Canada announced earlier this year that it had hit the first spending target of 2 per cent.

Under Bill C-40, the DIA will move out of the procurement department and become a full-fledged Crown corporation, overseen by a CEO and board of directors.

It delegates parliament oversight to a new cabinet position, to be titled the associate minister of national defence for procurement. Stephen Fuhr, the secretary of state for defence procurement, is widely seen as the frontrunner for the new role.

The government said the bill would improve integration with the Department of National Defence, though responsibility for the Defence Production Act and purchasing decisions will remain with the public services and procurement minister. Cabinet will ultimately have final say over any purchases.

The bill comes amid reports that DIA CEO Doug Guzman was preparing to leave the organization because of his frustration with the internal bureaucracy.

Guzman eventually announced that he was staying with the DIA and it’s unclear if he influenced the drafting of the bill to give the agency more autonomy.

While it will still operate as the DIA, Bill C-39 establishes a new official name for the body: the Canadian Corporation for Defence Investment.

More to come…