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ARTICLE · 29 OCTOBER 2026

Supply And Command: Canada Moves To Overhaul Defence And National Security Procurement

McMillan LLP
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Canada's Bill C-40 proposes a fundamental restructuring of defence and national security procurement, converting the Defence Investment Agency into a Crown corporation with expanded powers and introducing new competitive bidding rules. The legislation grants unprecedented authority to finance infrastructure projects and exclude suppliers on security grounds, potentially reshaping how contractors, lenders and investors participate in Canada's defence sector.

CanadaGovernment, Public Sector
Timothy Cullen
Timothy Cullen
Catherine Doyle
Catherine Doyle
Brett Stewart
Brett Stewart
Emma Butson
Emma Butson
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Bill C-40, An Act respecting production, procurement, and investment in relation to national defence and national security (“Bill C-40”)1 received first reading in Parliament on October 6, 2026.

For defence contractors, infrastructure developers, lenders and investors, the bill is a significant development: it proposes a fundamental restructuring of how Canada procures and finances defence and national security equipment, services and infrastructure. The changes could affect how companies compete for contracts, structure projects and access capital.

Bill C-40 has two operative parts:

  • Part 1 converts the Defence Investment Agency (“DIA”), currently a special operating agency within Public Works and Government Services, into a new Crown corporation, legally named the Canadian Corporation for Defence Investment (“CCDI”). Although newly incorporated as the CCDI, the entity will continue to operate publicly under the name Defence Investment Agency. It will operate at arm’s length

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The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

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