Ottawa moves to make the Defence Investment Agency a Crown corporation. What it signals for Canadian shops.

Bill C-40 would turn the agency that buys for the military into a permanent Crown corporation with a mandate to build domestic manufacturing. For CGP-registered Canadian shops, the direction of travel is clear.

On October 6, 2026, the federal government introduced Bill C-40, Strengthening Canada's Defence Sector. The bill would make the Defence Investment Agency (DIA) a Crown corporation, legally the Canadian Corporation for Defence Investment, reporting to the Associate Minister of National Defence for Procurement. The DIA was stood up in October 2025 as a special operating agency inside Public Services and Procurement Canada. The change moves it from an agency to an arm's-length corporation with its own board.

The detail that matters for a Canadian parts supplier is the mandate, not the org chart. The DIA was built to streamline defence procurement and to use procurement as investment, building domestic manufacturing and supply chains. That is the thrust of the Defence Industrial Strategy launched on February 17, 2026, which runs on a build-partner-buy framework.

The Canadian-content signal is already in the contracts

The strategy is not theoretical. Recent defence awards carry explicit Canadian-content and industrial-benefit commitments:

• Colt Canada committed to at least 80 per cent Canadian content on the Canadian Modular Assault Rifle program.
• General Dynamics Land Systems-Canada will build 190 more Armoured Combat Support Vehicles, taking the fleet from 360 to 550, drawing on more than 600 Canadian suppliers across over 100 communities, and is expected to sustain more than 6,000 jobs a year over eight years.
• The Over the Horizon Radar program is estimated to add close to $290 million a year to GDP and support about 2,270 jobs a year from 2026 to 2033.
• The Enhanced Satellite Communications Project-Polar, awarded to Telesat, is estimated to create or maintain 2,600 jobs a year and add $335 million a year to GDP over about seven years.

Large platform buys, like the Saab airborne early warning aircraft built on Bombardier's Global 6500 and up to 12 patrol submarines from Thyssenkrupp Marine Systems, flow work down through the Industrial and Technological Benefits (ITB) policy, which obligates primes to place value in Canada.

What this means if you source defence parts in Canada

Primes meet ITB and Canadian-content obligations by placing real work with Canadian machine shops, fabricators and finishers. The jobs sit with suppliers who can clear two bars at once: the capability (tolerances, materials, certifications) and the compliance (controlled-goods handling). A shop that handles controlled goods or technical data in Canada has to be registered under the Controlled Goods Program, and a prime cannot route controlled work to a shop that is not. AS9100 and, for sovereign supply chains, CGP registration are becoming table stakes, not differentiators.

If you are a buyer sourcing defence or controlled-goods parts, the practical read is that domestic capacity is being funded on purpose, and the supplier pool that can take the work is the one that is already certified and registered. If you are vetting shops, confirm CGP registration before you send a controlled drawing, not after. We only route controlled jobs to CGP-registered Canadian shops, which is part of how we handle controlled goods.

FAQ

Does this bill mean more work for Canadian machine shops?

It points that way. The Defence Investment Agency's mandate is to build domestic manufacturing by using procurement as investment, and recent awards already carry Canadian-content and Industrial and Technological Benefits commitments that primes meet by placing work with Canadian suppliers. The work still goes to shops that can meet the capability and compliance bar.

What certifications matter most for defence work?

AS9100 for aerospace-grade quality, the relevant process and material certifications for the part, and Controlled Goods Program registration for any job involving controlled goods or technical data. A prime cannot route controlled work to a shop that is not CGP-registered.

Last reviewed: October 2026. Figures are from the Government of Canada releases cited below; confirm current program details with the primary sources before relying on them.