🍁 civid v1

Overview

Bill C-40 would create a federal defence investment corporation and expand federal powers over defence and national-security production, procurement and investment. It would affect federal departments, defence and security suppliers and contractors, associated foreign governments, and employees of the existing Defence Investment Agency.

The bill is at second reading; its provisions are not yet law.

Part 1 — Defence investment corporation

• Establishes the Canadian Corporation for Defence Investment, which may also operate as the Defence Investment Agency. It would undertake defence production, procurement and investment for the Canadian Forces and Department of National Defence, and, when directed, for associated governments.
• Gives the responsible minister power to direct its activities. Its powers would include procurement and stockpiling, loans and advance payments. Guarantees, insurance and share acquisitions would require Finance Minister approval; other financial arrangements would require further authorization.
• Permits up to $1 billion in aggregate payments from the Consolidated Revenue Fund for specified activities, with certain repayments and proceeds deducted from the amount counted toward the limit. An appropriation Act could change the limit. The Finance Minister could also make loans to the corporation.
• Transfers the existing Defence Investment Agency’s property, obligations, contracts, employees and unspent appropriations to the corporation. It authorizes up to $30 million in transitional funding within 180 days of the relevant provision taking effect.
• Allows appointment of an Associate Minister of National Defence for Procurement and makes related changes to other laws.

Part 2 — Production and procurement law

• Renames the Defence Production Act the Defence and National Security Production and Procurement Act. It expands its scope to national-security supplies and projects and to defence and security services. Covered supplies could include data and intangible property; covered projects could include residential works on Defence-administered federal property.
• Gives the Public Works Minister exclusive authority, subject to specified exceptions and the corporation’s Act, to acquire covered supplies and services and construct covered projects for federal departments, boards and agencies. Some powers may be delegated.
• Expands stockpiling purposes to include national defence, national security—including economic security—and the defence or security of associated governments or other states. It also expands powers to require information from businesses, including defence-service providers.
• Authorizes loans, advance payments, guarantees and other financial arrangements for specified defence and security purposes. It permits up to a separate $1 billion in aggregate payments for specified ministerial activities, subject to deductions and adjustment by appropriation Act. Certain loans for capital works or equipment and for research, development or innovation are restricted, subject to regulations.
• Requires competition for covered contracts, but allows exceptions including urgent operational needs, national security, support for important Canadian economic sectors, interoperability, sensitive technology and single-capable suppliers. The minister could exclude a bidder on reasonable grounds of risk to defence, security or public safety without giving reasons.
• Allows regulations to authorize the minister to require a person to carry out stockpiling-related activities for defence, security or emergencies. Regulations could establish administrative penalties of up to $2 million per violation, with a right to request ministerial review.
• Restricts disclosure of information about individual businesses obtained under the Act, with specified exceptions, and updates the Access to Information Act accordingly.

Part 3 — Review and commencement

• Requires the responsible ministers to begin a review of the corporation Act and the production-law amendments within five years of the review provision coming into force. A report must be tabled in both Houses as soon as feasible after completion.
• Provides that, if Bill C-31 receives royal assent, its division titled “Defence Investment Agency Act and Defence Production Act” is repealed.
• Most provisions would come into force on dates set by order of the Governor in Council; the new corporation Act also provides for its provisions to take effect by order.