October 24, 2025
The Empire Club of Canada Presents
The Honourable David J. McGuinty, Canada’s Minister of Defence: The Economics of Action
Chairman: Saurabh Popat, President, Board of Directors, Empire Club of Canada
Moderator
The Honourable Lisa Raitt, P.C.
Distinguished Guest Speaker
The Honourable David J. McGuinty, Canada’s Minister of Defence
Head Table Guests
Chris Lane, Senior Vice President & Area Manager, Edmonton Buildings Group, Ellis Don
Robert Paltor, Senior Partner, McKinsey & Company
Welcome Address by Saurabh Popat, President, Board of Directors, Empire Club of Canada
Good afternoon, everyone. Thank you for joining us today. I’m Saurabh Popat, the chair of the board here at the Empire Club of Canada, and your host for today’s event.
To formally begin, I’d like to acknowledge that we are gathering on the Traditional and Treaty Lands of the Mississaugas of the Credit, and the homelands of the Anishinaabe, the Haudenosaunee, and the Wendat Peoples. I encourage you all to learn more about the Traditional Territory on which you work and live.
Now, today’s event would not be possible without the generous support of our sponsors. The Empire Club of Canada is a non-profit organization, and our sponsors generously support the club, and make these events possible and complimentary for our online viewers to attend. So, please join me in thanking our Lead Event Sponsors, Ellis Don, and McKinsey & Company. Thank you. Thank you to our VIP Reception Sponsors, the Ontario Road Builders Association, AWS, AtkinsRéalis, Bombardier, Colt Canada Corporation, MDA Space, Palmer Low, and WSP. Thank you. And thank you to our Supporting Sponsors, the Boeing Company, Lockheed Martin, and MIT Group. Thank you. We also deeply appreciate the ongoing support of our Lead Season Sponsors, Bruce Power, Hydro One, and National Bank Financial Markets, and our VIP Reception Season Sponsors, Ellis Don, McKinsey & Company, the Ontario Road Builders Association, and Waste Connections of Canada. And finally, thank you to our media—round of applause, absolutely, thank you—and thank you, finally, to our Media Partner, the Toronto Star, and our wonderful AV Partner, Bespoke Audiovisual.
If you have a question for our speakers, please scan the QR code found on your program, or through the Q&A function, if you’re online. For those of you online, if you require technical assistance, please use the chat feature.
Now, thank you all for being here to our event today, “The Economics of Action.” And we’re not talking about how the Jays are going to win tonight and take the World Series, but that can also be part of the action. And all seriousness, a conversation today that speaks directly to where Canada stands today, rebuilding the foundation of our national defence and re-energising the industries that make it possible.
I think, just a short time ago, all of us would have been surprised at how quickly the Government of Canada has committed to $9 billion to re-arm, rebuild, and reinvest an ambitious plan to meet our NATO target and strengthen our domestic capacity in technology, quantum, artificial intelligence and cryptography. We’ve enjoyed lively discussions on some of these capacities already this season, and look forward to continuing that today.
Because Canada can act with strength, confidence, and purpose, even in a world that feels increasingly unpredictable. Sir John A. Macdonald once said, “Let us be English, let us be French, but let us always be loyal, and above all, let us be Canadians.” That sense of unity and purpose, of building something greater together, feels especially relevant now, as we align our industrial might, our research strength, and our national will towards securing Canada’s place in the world. As many would say, a great offence is only as good as a great defence.
For more than a century, the Empire Club has hosted conversations like this one, where business, government, and civic leaders come together to discuss the choices that will define our country’s next chapter. We’re very proud to be joined today, and all season by a company that understands what this national ambition looks like in practice.
Ellis Don is a Canadian success story, a global leader in construction, engineering, and innovation. Their projects have shaped skylines, advanced technology, and built the critical infrastructure that keeps Canada strong and healthy. They are the ideal Lead Sponsor for today’s event, and we’re very grateful for their generosity as a VIP Reception Season Sponsor, as well. Please join me in welcoming Chris Lane, Senior Vice President and Area Manager for Ellis Don’s Edmonton Buildings Group who will introduce our keynote speaker. Chris.
Opening Remarks by Chris Lane, Senior Vice President & Area Manager, Edmonton Buildings Group, Ellis Don
Good afternoon ladies and gentlemen, distinguished guests, and members of the Empire Club of Canada. My name is Chris Lane, and I have the privilege of serving as Senior Vice President at Ellis Don. It’s a real honour to be here today to welcome the Honourable David McGuinty, Minister of National Defence. Elected to the House of Commons in 2004 under Prime Minister Paul Martin, Minister McGuinty has held several critical roles during several mandates. Minister McGuinty has served as the Chair of the National Security and Intelligence Committee of Parliamentarians, and served as Canada’s Minister of Public Safety and Emergency Preparedness, before taking on the role of Minister of National Defence.
When we talk about Canada’s defence sector, we’re really talking about the foundation of our sovereignty, and the strength that comes from being prepared. But readiness isn’t only about ships, aircraft, or equipment. In fact, our best weapons don’t glide through the water, soar through the skies, or rumble on tanks. It’s about how we inspire and support those awesome women and men, Canada’s sons and daughters. Readiness is also about partnerships, about collaboration between government, industry, and community, working together to make sure the women and men in uniform have what they need to serve.
Right now, with the world changing faster than ever, our inability to act, to plan, build, and respond quickly has never been more important. For more than 70 years, Ellis Don has been proud to play a small but steady role in that mission, building the infrastructure that keeps our forces ready. From training facilities and operation centres to the homes where service members and their families live, our teams work every day to deliver projects that matter to the country.
Lately, we’ve been focused on finding new ways to deliver that work faster, connecting design, financing, and construction into one seamless process. It’s about turning good ideas into real buildings, real communities, and real results in months, not years. That’s what readiness looks like in today’s world, not just defending Canada abroad, but strengthening the foundation of security here at home. The work our industry does quietly, collaboratively, and with purpose, is every bit as essential as Canada’s defence posture is the equipment and the technology that we invest in. And under Minister McGuinty’s leadership, we’ve seen the start of a real partnership, ensuring defence policy is modern, responsive, and aligned with Canada’s broader goals of resilience, innovation, and responsibility on the world stage. So, on behalf of Ellis Don and the Empire Club, it is my pleasure to ask you to join me in welcoming the Honourable David McGuinty, Canada’s Minister of National Defence.
The Honourable David McGuinty, Canada’s Minister of National Defence
Well, thank you very much, Chris. Bonjour, [Indiscernible]. Richard, good to see you again. I want to begin by saying it’s a real pleasure to be back in Toronto, and of course, at the Empire Club here today. Mostly, I’m very happy to be in Toronto, because I get to see my beautiful baby girl daughter, Fiona, who’s over here at one of the tables. Fiona, where are you? Over there. Great. I won’t go any further in embarrassing her, except to say that she’s a rising star at Stikeman Elliott, if you’re looking for a good lawyer. She does competition and trade, and she’s got business cards.
I also want to say this. I want to begin by thanking serving and former members of the Canadian Armed Forces. One of the things I have learnt is just how extraordinary the women and men of the Canadian Armed Forces are. The talent, the education, the dedication, and the values. [Applause] Thank you so much. Thank you.
For more than a century, this stage has hosted some of Canada’s most important conversations about who we are as a country, where we’re going, and how we’re going to build the future. And that’s exactly what I want to talk about today: how we build a stronger Canada, and a safer world. Because it’s a rough-and-tumble place. It’s been about six months since our new government was elected, and I was appointed Minister of National Defence. In the last few months, we’ve announced historic new defence spending, a pay increase for the men and women of the Canadian Armed Forces—long overdue—new infrastructure on our bases, and new defence partnerships with our allies.
Just last week, I was in Brussels for the third time, meeting with NATO defence ministers, where we discussed the changing threat landscape, and the need to strengthen our alliance, especially when it comes to supporting Ukraine. I’ve just come off a call with the Coalition of the Willing, where 30 leaders reaffirmed their commitment to Ukraine—I apologize for holding you up today, but it was an important place to be. Earlier this week, Canada hosted Germany and Norway’s Ministers of Defence to discuss joint partnerships and procurement opportunities. And over these last six months, I’ve learned a few things. Most importantly, I’ve learned this: none of our partner countries have anything on Canada. We are, I can tell you, we know what Canada has to do to skate, to compete, and we’re going to do this. We’re living through an era of breathtaking change. As I often say to my four kids, when they listen, we’re never going to see the pace of change this slow again. Threats are not only moving faster, but they’re becoming more complex and interconnected, and we have to be ready.
Our geography was once a buffer from international threats, not anymore. It is not the security perimeter it once was. We see it in Europe, where Russia continues its brutal, illegal invasion of Ukraine, threatening NATO allies with airspace incursions, and testing the resolve of democracies everywhere. Thousands of soldiers are dying every day on both sides. We see it in the Indo-Pacific, where China is playing an increasingly active role, and has made it clear its intent to unify with Taiwan. We see the effects of climate change opening new frontiers in the Arctic, attracting competitors who would test our sovereignty, and giving rise to a new truism. Natural security challenges now intersect with more traditional concepts of national security challenges, and these are not going away.
At moments like this, nations face a choice. Do we turn inward, and hope these storms pass, or do we stand shoulder to shoulder with our allies and partners, confident in our democratic values, and defending them together? For Canada, the choice is clear. We are far stronger together. To deter threats, together. To reassure each other as allies, together. And that is exactly why we’re working to rebuild, rearm, and reinvest in our nation. Because a secure and sovereign Canada requires a secure and sovereign economy. That is why this government is making historic investments in defence.
As we just heard, in June, Prime Minister Carney announced an infusion of $9.3 billion in additional funding for defence and security. Investments that enable us to reach our NATO 2% of GDP pledge this year, five full years ahead of schedule. By the end of this fiscal year, Canada will spend $63 billion on defence. And that’s just the start. We’ll be dedicating 5% of GDP to defence by 2035. Because defending Canada, our values, and our interests requires immediate action, as well as longer-term ambition. And it’s not only about bigger budgets, or building new bases, either; it’s about turning this ambition into advantage. It’s time for us to build a defence ecosystem that drives innovation, strengthens our economy, and creates good jobs right across the country. In fact, every defence dollar we spend in Canada is designed to do three things at once. Reinforce our sovereignty, advance our security, and fuel homegrown innovation. That’s the economics of action.
First, we’re massively rebuilding the foundations of the Canadian Armed Forces, and we’re doing it quickly. Our people, our infrastructure, and our readiness. We’re strengthening the Canadian Armed Forces from the ground up, recruiting and retaining more members with improved compensation. Better support to families, through on-base housing initiatives, healthcare, childcare, and seamless moves. We’re repairing and sustaining our fleets and bases, investing in digital systems, and modernizing critical defence infrastructure from coast-to-coast-to-coast. And we’ve just brought the Coast Guard into the defence family, another 6,200 players. All this designed with the goal of keeping Canadians safe, and supporting our allies. That’s rebuilding in action.
Second, we’re rearming, equipping Canada for the threats of tomorrow. Wars in Ukraine and the Middle East have shown how fast technology is transforming the battlefield, from drones and precision systems to artificial intelligence and advanced cyber operations. Adversaries are targeting supply chains, stealing intellectual property, and using civilian platforms to advance military aims. They’re moving at the speed of innovation, and so must we. That’s why we’re strengthening supply chain resilience, working with allies to secure and stockpile critical minerals, and investing in clean, secure energy systems for the forces. It’s why we’re partnering with Australia to develop next generation, over-the-horizon radar, moving ahead with new river-class destroyers, and preparing to acquire new fleets of fighter jets and submarines—I leave Tuesday for South Korea, to meet with Hanwha, to see what they have on offer.
We’re delivering advanced new capabilities to our people in uniform, including modern armoured vehicles, next-generation aircraft, and a slate of new digital technologies. And we’re not just buying equipment. We’re building capacity, right here in Canada, to produce and to sustain it. Behind every new capability, there is a story of partnership with Canadian workers, engineers, materials, researchers, suppliers, investors, and allies and partners. Because sovereignty today isn’t only about who commands our forces and carries out their orders. It’s about who builds and maintains the systems that keep us safe. That’s where it’s at.
Third, we’re reinvesting. Reinvesting in Canadian industry, innovation, and talent. For far too long, underinvestment has eroded our industry’s ability to meet the needs of the Canadian Armed Forces, and our other security partners. The world has changed, and Canada needs to build our capacity to ensure our national and economic security. Our government will shortly launch this country’s first-ever defence industrial strategy, a roadmap for harnessing innovation and turning ambition into advantage, where we will lay out our needs, our sovereign capabilities, and sectors where we have clear comparative advantage.
To do that, we need to know where we are now. In 2022, the Canadian defence industry generated over $14 billion in revenues, contributed $9.6 billion in GDP, and supported 81,200 full-time jobs, and over 200,000 part-time jobs. So, we’re not starting from zero. In some areas, we are leading the way, absolutely leading the way. Aerospace and marine systems, quantum computing, AI and software, Canada is on the cutting edge. When it comes to defence spending, Canada now spends—wait for it—over 70 cents of every dollar on military equipment in the United States. In fact, Canada buys 8% of all military equipment manufactured in the United States.
When it comes to defence and security, the Canada-United States relationship remains strong. That’s clear. Look to our intelligence cooperation, our joint training, our collaborative research. Look to NORAD, the only binational command in the world, one which has kept us safe for decades. I know there was news this morning on the trade negotiations, and I would just say that our government remains committed to working with the United States, to find an agreement for workers and businesses in both our countries. We will manage the relationship. I have confidence in Prime Minister Carney.
But that does not mean that we can’t start building more in this country, and buying more from this country. I know that one of the fundamental challenges facing Canadian industry is a lack of clear and predictable demand signals from government. How can you invest in a product if you don’t know what your primary buyer is thinking? We need to provide better clarity, better lead times, and consistent communications, so that industry and innovators know what the Canadian Armed Forces needs.
Which brings me to procurement, buying stuff—which, at its current pace, predates some of the lives of my staff. The procurement process for far too long has been too slow and complex. It doesn’t serve the CAF or industry. So, how are we addressing this? By creating the new Defence Investment Agency, which will streamline the process and accelerate procuring what we need as a country. As I see it, Canadian industry has a generational opportunity, a lucrative opportunity, to position our country as a global leader in all of these emerging technologies. That means finding ways to simplify our own procurement, processes, shorten timelines, so that Canadian innovators, especially small and medium-sized companies, can turn great ideas into the tools and the tech we need right now.
It’s a generational shift in our own thinking in Ottawa, the first I’ve seen in my 21-and-a-half years in the House, one that will help our Canadian industry plan, invest, and compete with full confidence. We’ll be placing a premium on dual-use technologies that serve both civilian and defence needs, which will help companies diversify, scale, and compete globally. This especially holds true for the North, where military infrastructure can serve many dual functions for communities. And we’re backing entrepreneurs, researchers, and investors, who are building Canada’s future right here at home. From Southern Ontario’s start-up ecosystem in places like Toronto and Waterloo, to innovation hubs in Halifax, Ottawa, Winnipeg, Vancouver, and beyond. Because when Canadian companies succeed here, our defence sector grows stronger, more competitive, and more innovative. This creates good jobs in our communities. It attracts top talent from here and abroad—not inconsequential, given some things happening around the world—and it generates lasting value for the country. It gets big things done.
In our globally connected, highly competitive, increasingly dangerous world, partnerships matter more than ever. It’s at times like these, I often rely on the wisdom of my dearly departed saintly mother, who used to say to her ten children at the dinner table, “You have a choice to make. If you pull apart, you’ll feel like you’re five. But if you pull together, you’ll feel like you’re twenty.” We must be ready to detect, deter, and defend against threats in every domain. They are coming at us. By investing in the Canadian Armed Forces, in people, in infrastructure, and innovation, we’re strengthening the capabilities we need to protect our sovereignty, and contribute to global stability.
We’re gratified to see that the Canadian people seem to be fully supportive. A bolstering defence vital to our future in North America, and the world. After all, we have domestic, continental, and international responsibilities. So, let’s keep pushing forward, government, industry, academia, investors, innovators, to make Canada not just a place where great ideas begin, but where they become scalable solutions to protect everything we hold dear. Because if we want a safer world, ladies and gentlemen, we need a stronger Canada. And with your support, your partnership, your ingenuity, your risk-taking, your passion, and your belief in what we can achieve together, that’s exactly what we’re building. Thank you very much. Merci beaucoup.
Saurabh Popat
Thank you so much, Minister McGuinty, for those illuminating remarks about the future of our defence and our economy together. You’ve outlined the scale and urgency of Canada’s defence renewal, and what it will take to turn investment into capability, innovation, and national strength. I believe I can say on behalf of everybody, we’re in very good hands for today’s conversation.
Now, I’d like to introduce moderator for today, the Honourable Lisa Raitt, who’s here to join us, and do the honours of having a great conversation that matters with Minister McGuinty. Lisa is Vice Chair of Global Investment Banking at CIBC Capital Markets, where she works with clients across the energy, infrastructure, and industrial sectors. She’s known for her insight, her candour, and her deep understanding of how business and government work together. Before joining CIBC, Lisa served as President and CEO of the Toronto Port Authority, and spent more than a decade in public life as a member of Parliament. She held three senior Cabinet portfolios, including Natural Resources, Labour, and Transport, and went on to serve as Deputy Leader of the Official Opposition of the Conservative Party, and the Conservative Party of Canada. So, today’s chat brings a special dynamic from different sides of the house to sharing a stage, and it promises to be a memorable and wide-ranging conversation. Please join me, in welcoming our moderator, the Honourable Lisa Raitt.
The Honourable Lisa Raitt, P.C.
Minister, you said be gentle, just as we sat down.
The Hon. David McGuinty
Lisa. We go way back. All good.
The Hon. Lisa Raitt, P.C.
Minister, do you remember how we first met?
The Hon. David McGuinty
No.
The Hon. Lisa Raitt, P.C.
We first met on the floor of the House of Commons, you asking me questions.
The Hon. David McGuinty
Okay.
The Hon. Lisa Raitt, P.C.
So, I decided to ask Chat GPT the kinds of questions that you asked me.
The Hon. David McGuinty
Oh, boy.
The Hon. Lisa Raitt, P.C.
Shall we go through them now?
The Hon. David McGuinty
Thanks very much, folks, I’ve got to go.
The Hon. Lisa Raitt, P.C.
How many times do you think you asked for my resignation?
The Hon. David McGuinty
A few times, I can’t remember.
The Hon. Lisa Raitt, P.C.
Okay….
The Hon. David McGuinty
I would never have done such a thing, Lisa.
The Hon. Lisa Raitt, P.C.
Yeah, you did. You told the Toronto Star, too, but that’s okay. But the fun part is, who’s asking the questions now?
The Hon. David McGuinty
Yeah, clearly you are. Payback.
The Hon. Lisa Raitt, P.C.
Not at all. That was a really good speech. I appreciate you laying it out. We’re going to go in a little bit more depth, I think, because I think you’ve got a big room here today, who are well-versed in the topic that you were talking about. But before we get into all of it, I did want to ask you, you know, in the introduction, it was mentioned some of the important roles that you had in Parliament. And you had one in particular, I think, that was really important when you chaired the National Security Committee. How have all your roles, you were also the critic in Environment, that’s where we first met, how have those roles prepared you for the job that you’re doing today?
The Hon. David McGuinty
That’s an excellent question, Lisa. I was very fortunate to be able to be the founding chair of Canada’s first National Security and Intelligence Committee. So, it’s the only committee since the Second World War where parliamentarians from the House and the Senate come together, and they’re cleared to a very high level and have access, almost unfettered access, to classified information. So, through that experience, Lisa, I was able to, you know, with a team of incredible members and senators from all sides to pursue some of the most foundational reviews in the country on security and intelligence. So, it prepared me well, in a sense of understanding the complexity, the international nature of the threat landscape…
The Hon. Lisa Raitt, P.C.
Yeah.
The Hon. David McGuinty
…the speed, the technology. So, all these things helped enormously.
The Hon. Lisa Raitt, P.C.
Yeah, when you sat down, when you first came in, the first thing you said to me about your job was how important your work was with the men and women of the forces. So, what should Canadians know that you have now learned about our soldiers, about our veterans, about our military families? What’s the one thing that not surprised you, but really grabbed you, and said, “Oh, the average Canadian should know this.”
The Hon. David McGuinty
Oh, my gosh, you know, I do town halls all the time. I just did a town hall in Belgium, Brussels, at NATO, at the Shape headquarters, with about 70 or 80 Canadian members of the forces. I think what struck me the most, Lisa, is it’s just the unbelievableness of the people who serve in the Canadian Armed Forces. I mean, their passion, their stick-with-it-ness. If you’ve been a member of the Forces for 10 or 20 years, you’ve had to live through some difficult times, right? They’ve had to manage through scarcity and hold it all together, and yet still remain there for us. It’s just the people. They’re unbelievable.
You know, I had a helicopter ride recently in Quebec City, while touring Valcartier, and the young woman who was the pilot, I was sitting behind her. I couldn’t understand all these gears and dials in front of her. I was marvelling at that. We came down after the ride. And I said, “So, what’s your background? What’s your story?” And she said, “Well, you know, I did my undergraduate degree.” And I said, “Where did you go to school?” She said, “Well, I did my undergraduate degree in physics at Queen’s.”
The Hon. Lisa Raitt, P.C.
Wow.
The Hon. David McGuinty
I said, “Okay, so what was your plan?” “My plan was to become a fighter pilot, sir, but I couldn’t make that, so I decided to become a helicopter pilot.” And all I’m thinking in my head is, “How do I keep her? How do I keep her? How do I keep her? How do we keep her in the system, that kind of talent, that dedication?” So, I think across the system. Maybe the second point I would make, Lisa, is I think the Canadian people don’t really know the Canadian Armed Forces.
The Hon. Lisa Raitt, P.C.
Yeah.
The Hon. David McGuinty
I think it’s been hidden. I think it’s been sort of put away, and we call folks out, maybe they help us with sandbagging when there’s a flood, or maybe they’re airlifting people out of fires, of harm, or they’re dropping aid in Gaza. We don’t really know what they do. So, I think what I’m trying to do, as well, by doing these kinds of things as well, is to showcase who they are, what they’re doing, why we’re investing in the Forces, and why we need them.
The Hon. Lisa Raitt, P.C.
Yeah, absolutely. I liked how you framed up where you’re going: rebuilding, rearming, and reinvesting. But there’s a lot of folks in the room who are expecting and waiting for the defense industrial strategy to be published. So, do you have a batting order when you’re going to be doing that? Can you give us an idea, after Budget, before Budget?
The Hon. David McGuinty
After Budget, before Christmas.
The Hon. Lisa Raitt, P.C.
After Budget, before Christmas.
The Hon. David McGuinty
That’s the plan.
The Hon. Lisa Raitt, P.C.
So, with the folks in the room who are representing all walks of the defense supply chain, how are they going to get involved, especially the small and medium-sized enterprises?
The Hon. David McGuinty
Stay tuned. One of the first things I want to share with—forgive me, other things I can share with you is we’ve spoken to over 1,000 different actors in this space in developing the DIS. We’ve looked at, at least a dozen countries, allies, or otherwise, in terms of what they’ve been doing with their DIS, and how successful they have been. Forgive me, I’m not dissing you. It’s the defense industrial strategy. That’s supposed to be a joke.
The Hon. Lisa Raitt, P.C.
It was a good one.
The Hon. David McGuinty
Tough audience.
The Hon. Lisa Raitt, P.C.
No, they’re all waiting to hear exactly how they can partake.
The Hon. David McGuinty
Okay.
The Hon. Lisa Raitt, P.C.
That’s what it is. Every word you say is absolutely, it’s going to be analyzed.
The Hon. David McGuinty
I’m skating. I’m skating. We’re on it. We’re on it. We’re moving very quickly. And this is not just a defense lead. I’m working with Ministers Jolie and Hodgson, with Fuhr, our Secretary of State Fuhr, in procurement. All these things are interconnected, pulling it together. And there are others in the audience who know that we’re also building new research capabilities in a top-secret type setting, because we don’t have that capacity across the country like we need to. We intend to compete, and compete strongly, with the Americans.
The Hon. Lisa Raitt, P.C.
Yeah. When was your first election, by the way?
The Hon. David McGuinty
2004.
The Hon. Lisa Raitt, P.C.
So, you’ve been around for a long time. So, you know that we have a reputation of not being able to procure or build stuff very quickly.
The Hon. David McGuinty
Yeah.
The Hon. Lisa Raitt, P.C.
Do you think you’ve cracked the code on it?
The Hon. David McGuinty
I think so. I think the first thing we did was decide to hire somebody very capable off Bay Street to run our procurement agency. And we did, and he’s starting in mid-November. We’ve taken procurement outside of PSPC, and outside of defense, and we’ve created a special operating agency, where there will be expertise. We will professionalize procurement. These folks will have the responsibility to go and acquire the things that we need now. That’s $100 million or more. Everything below $100 million will continue to be procured by folks in the forces.
So, one of the first things I insisted on doing upon arrival after visiting about 10 bases was go back and say, why are our commanders on bases not able to buy more than $50 or $100,000 worth of goods? This makes no sense. So, we actually completely reformed their authorities for purchasing, to give them more autonomy. These are capable people, capable teams. So, we think that’s also going to unleash quite a torrent of procurement, and not have to run it up 14 levels.
The Hon. Lisa Raitt, P.C.
Yeah.
The Hon. David McGuinty
So, I think that this new design will help accelerate very quickly. And there’s some big, big, big, obviously, procurements coming up, fighter jets, and submarines, and lots of others.
The Hon. Lisa Raitt, P.C.
So, when you talk about those big pieces of procurement, do you think we’re procuring now because of how things have changed in the world? And we’ve gone from a Canada where we were OK with not having these big pieces of material. And now it’s an absolute game changing necessity to have it, in order to have steak at the table.
The Hon. David McGuinty
I think, because you’re an experienced former elected official, Lisa, it was interesting in the last campaign. It was my eighth campaign. And I like to go to the doors, and talk to people. And it was sort of knock, knock, knock, “Hi, can I enlist you in a cause?” And people would say, what’s your cause? And the answer was Canada. OK, great. And then after two weeks, it was knock, knock, knock, “Hi, can I—” before I could ask the question, can I enlist you in a cause, people would stop me and say, “Don’t ask me to get enlisted in your cause. I’m already there.”
The Hon. Lisa Raitt, P.C.
Yeah.
The Hon. David McGuinty
I think a lot of people in Canada, many Canadians, millions of Canadians said, hang on a second here, we’re 41-and-a-half million strong. We’re sovereign. We need to be secure. We need to rethink all of this. So, I think that’s what we’re trying to give lift to, and to give direction to. And I think that’s where the Canadian support is coming from.
The Hon. Lisa Raitt, P.C.
Yeah. And it’s going to be tough, because when you sit in the room here, and we talk about the amount of money that’s being spent, it’s great news for everybody in the room. But other folks on the outside may be saying, well, what about this? Why aren’t you spending more on this, on health care, on pensions, whatever? So, what’s the response? How can we help make sure that procurement continues on, and doesn’t become a political football?
The Hon. David McGuinty
Well, because governing is about making decisions, hard decisions, and allocating scarce resources at a difficult moment. The prime minister calls this a hinge moment. He’s right. We’ve got to decide. What do we want to be when we grow up? We’re 41and-a-half-million strong. Let’s be 41-and-a-half million strong. I think the answer to that is let’s grow the economy. Let’s grow a bigger pie. If there’s a bigger pie, then there’s more there are more resources available for other priorities.
So, we don’t intend to have any effect on the cherished rights and programs that we’ve acquired for ourselves. But what we are going to do is move quickly. And I think this is the I think the most refreshing and wonderful thing of working with Prime Minister Carney is he’s highly transactional. And, and, and he measures things, which is kind of nerve wracking.
The Hon. Lisa Raitt, P.C.
And he makes you wear ties, I hear.
The Hon. David McGuinty
And you need black shoes and ties…
The Hon. Lisa Raitt, P.C.
Yeah.
The Hon. David McGuinty
…okay? No, the point is, I think we’re moving in a systematic fashion to give rise to a couple of big core economic sectors, defense being one of them.
The Hon. Lisa Raitt, P.C.
I have I have an iPad in front of me, because we’re accepting questions from the floor. I hope you know how you are allowed to do that. But we do have….
The Hon. David McGuinty
No, I wasn’t aware of it. That’s OK. Go right ahead.
The Hon. Lisa Raitt, P.C.
Oh. There’s no there’s none here yet. So….
The Hon. David McGuinty
Okay. Okay. Okay.
The Hon. Lisa Raitt, P.C.
But we do have a question on tape on video from a student from University of Toronto. So, can we roll the video?
QUESTION & ANSWER
[VIDEO:]
Hi, my name is [Indiscernible]. I’m at the University of Toronto double majoring in political science, technology, and social legal studies. Minister McGuinty, investing in this goal required to reach Canada’s 2% target demands confidence in the payoff and ability to manage the risks, especially in a digital world that is increasingly politically sensitive and borderless. Reaching this target requires a citizen-first approach. So, how is the federal government investing in Canadian social and human capital to ensure the Canadian talent is both foundation to, and the forefront of this transformation?
[END OF VIDEO]
The Hon. Lisa Raitt, P.C.
So, basically for the, for the room, the 2% commitment. But as we roll out the 2% commitment, how are we going to make sure that from a point of view of people, a point of view of persons involved in terms of HR, how are you going to make sure that it’s, it’s balanced?
The Hon. David McGuinty
I’m trying to, I’m grappling with the question. How will we use the 2% to make sure that we invest in people, or….
The Hon. Lisa Raitt, P.C.
Yeah. I think, in your 2%, just making sure that you’re covering off more than just about purchasing stuff, that there’s people who are gonna be involved, and there’s HR….
The Hon. David McGuinty
Oh, my gosh. That’s an incredibly good question. Look, you know, years ago, I did a review on diversity inclusion in our security and intelligence community. We looked at the SNI community across the country, and I was inspired to undertake the review because the FBI director told me in a separate meeting, they had they had determined years ago that the more diverse and inclusive the FBI was, the higher performing it was. So, I wanted to assess what the story was with Canada. So, I think I’ve determined after six months, the better our forces are supported, treated, helped be practical. I met a young woman who was a helicopter pilot, and I think she was in Borden, and she was constantly being called to go around the country to fix helicopters. Yet she had a couple of kids at home.
The Hon. Lisa Raitt, P.C.
Yeah.
The Hon. David McGuinty
Her husband was a stay-at-home dad. And one of the kids got sick. And unfortunately, in our system, the CAF medical system only applies to members of the CAF, not to their families. So, she was constantly worried, she told me. When she was fixing helicopters, her mind was, what’s going on with my four-year-old? Those kinds of considerations are crucial for us to address, so that our forces are as high performing as they can be.
The Hon. Lisa Raitt, P.C.
Yeah.
The Hon. David McGuinty
And so, I think as we invest in housing, in water, in sanitation, in barracks, and we do it creatively—Lisa, here’s an example: about three months, two months ago, I found out there was a building for sale in Esquimalt, BC, 37 unit apartment, brand new building for sale. And so someone came to me and said, well, we think we would like to buy that building. And I go, “OK, so what’s the problem? Where’s the holdup?” “Well, sir, we’ve never bought a building with apartments in it directly by D&D or CAF.” I’m like, “Well, is there anything that precludes you?” “No.” “Great. Go bid.” So, they went and bid, and between the time they bid and the time they acquired the building was five weeks. That’s the kind of speed we want to move on now. When I went to Treasury Board, and said I want to give folks a pay increase, that’s also a big part of taking care of our people.
The Hon. Lisa Raitt, P.C.
It is.
The Hon. David McGuinty
Treasury Board said, “Oh, that’s great. We think we can get that done in 18 to 24 months.” I said, “Thank you. That’s great. You have 100 days.” And they got it done in 101 days. So, we’re moving now to make sure—right? Let’s go. Let’s go. Because the better we take care of our women and men in the Canadian Armed Forces, especially as we recruit and retain, there are folks here tonight who might be—today, forgive me—who might be thinking, I have a daughter, or a son, or a cousin, or a partner who might want to join the Forces. So, we have to make sure that it’s a welcoming place, that it’s a trusting place, which, if I can for a second, also take a second to talk about culture inside the Armed Forces. We have a bill on the floor of the House right now which is going to address most of, almost all of the last legislative steps that we said that we committed to address through the Arbor Report on getting this better. For men, and particularly women in our forces, we need to expunge a kind of culture which makes it difficult, or impossible, or risky for women in particular to serve. We’re done with that. Time to move on. We need women and men who will serve together.
The Hon. Lisa Raitt, P.C.
Yeah, that makes a lot of sense.
The Hon. David McGuinty
Good.
The Hon. Lisa Raitt, P.C.
You mentioned the U.S. relationship in your speech, that the government remains committed to a deal, despite what we heard on Truth Social last night, and followed up with this morning. Can you give us, from a defense point of view, an assessment of the relationship between Canada and the United States? You mentioned it a little bit in your speech, but maybe spend a moment or two.
The Hon. David McGuinty
Okay, so during my time at Security and Intelligence, and then as Minister of Public Safety and the border, when the President was elected, and now, here’s how I describe it. We built a home together for several centuries, and the home is on both sides of the border, and the foundation straddles both sides of the border. Think of the home with a foundation with 40 rows of cinder blocks—not a poured foundation, but cinder blocks. I would say the first 30 rows of those cinder blocks are intelligence, security, and defence. And from my experience, I haven’t seen a single heaving, or shifting, or cracking, or leaking, or displacement of any of those cinder blocks. We cooperate, especially, with groups like NORAD or Integrated Air Missile Defense, something that we have to wrestle to the ground, we are tight, very tight here and abroad. So look, there will be continuing negotiations on the economic side. It’s about—look, the only advice I ever got on my wedding day from my mother was whatever happens during your marriage, son, make sure you keep talking to, to your wife, to your partner, keep talking.
The Hon. Lisa Raitt, P.C.
Yeah.
The Hon. David McGuinty
And I think, with a Canada-U.S. relationship, it’s important to keep talking.
The Hon. Lisa Raitt, P.C.
Have you met the Secretary of War?
The Hon. David McGuinty
I have, several times.
The Hon. Lisa Raitt, P.C.
Do you feel that you want to change your title?
The Hon. David McGuinty
No, I’m just fine, thank you. I appreciate that.
The Hon. Lisa Raitt, P.C.
Okay. I think that’s fair. We’ll stay with the U.S. for a second, and maybe you can explain to me what the Golden Dome is, and Canada’s role, or the wish of the United States. And I want to remind you that in the room, we have Commander Hadfield, who knows an awful lot about space, so be careful.
The Hon. David McGuinty
Commander, over to you.
The Hon. Lisa Raitt, P.C.
I think he’s over there.
The Hon. David McGuinty
Listen, where are you, Commander? He’s right there. Listen, what we’re really—there he is. A few months ago, the Prime Minister informed me that he was interested in hearing more about a discussion with the United States on integrated air and missile defense, IAMD. We call it Continental Shield here. We’re talking about a Continental Shield.
The Hon. Lisa Raitt, P.C.
Yeah.
The Hon. David McGuinty
And what we’re doing, Lisa, is we’re looking at, I mentioned in the speech this question of over-the-horizon radar systems, which are really quite remarkable. We’ll be able to see once they’re installed—the first phase is about $6.5 billion; the next phase will be even more. And it’s a joint American-Canadian initiative. We’ll be able to know now what’s coming at us, at what speed, and from where. We know that if there’s a threat, in terms of ballistic missile or hypersonic missile, it’s likely going to come over the Arctic, or over Alaska…
The Hon. Lisa Raitt, P.C.
Right.
The Hon. David McGuinty
…the American Arctic. So, we are now in active conversations with the United States to find out what we can do, how we will do this together. We are negotiating our way forward. And it’s, basically, building on our $38 billion we’ve put in to modernize NORAD. Remember, we have NORAD. You know, sometimes we forget these things. It’s an incredible relationship, and we’ve been counting on it for decades. It’s kept us safe. We scramble airplanes in either jurisdiction from both sides. When we need help, we rely on each other.
So, we’re looking at all of this now, this question of Continental Shield, and how we will connect. And eventually, we’re looking at connecting our system in plain English, so that our aircraft, our fighter jets, can connect to our satellites, which can connect to our Coast Guard vessels, which can connect to our submarines, which can connect to our on-land installations, and will create a continental defense system. This is what other folks in the world are looking at. The Baltic states are looking at something similar, through the Baltics. Recently, Taiwan announced they’re looking at something inspired by what happened, what’s going on in Israel. So, we have to get this right, and that’s exactly what we’re trying to do.
The Hon. Lisa Raitt, P.C.
Yeah, you mentioned the Arctic, and of course, that is very much of a focus in terms of our sovereignty, for sure, and the United States. I didn’t realize this, and I may be incorrect, but I think it’s Alaska where most of the F-35s in the United States are actually positioned, in terms of defense. So, when you speak with the United States about the Arctic, what’s our common agreement on that? What do we both have interests in?
The Hon. David McGuinty
Okay, I think the first thing is the new expectations. I think this is not new. The United States believes that Canada has a special responsibility, with respect to the Arctic. The United States is moving more fulsomely into the Indo-Pacific theatre, moving more of their resources, their assets, their concerns, to contend with that region. They’re asking Canada to pick up more of the slack in the Arctic.
The Hon. Lisa Raitt, P.C.
Right.
The Hon. David McGuinty
That doesn’t mean that we won’t be cooperating. I can’t tell you where the F-35s are, that’s classified, but the—maybe the commander can. Look, they’re there, we’re there, we have NORAD forward operating locations in the Arctic. We’re building our own new northern operating systems, and we’re looking at other development in the Arctic. We have to, and that includes electrification, that includes exploitation of critical minerals, that includes post-secondary, that includes housing, and infrastructure. I was up in Inuvik with the Prime Minister recently. They’re bursting at the seams, and they need basic infrastructure, electricity, and water, and water treatment. So, the Arctic is now for us, it’s important for us to live sovereignty there. And we’ve been doing that. But now, with the presence of foreign actors who are conducting science missions, to examine what’s going on in the Arctic, we are aware, and we’re starting to beef up.
The Hon. Lisa Raitt, P.C.
Yeah. Minister, one of the things that we didn’t talk about, but Anne McClellan I was speaking with this morning, and I know you know Anne well, but she wanted to ask you, and I’m doing it for her on her behalf right now, is what about the reservists? How do we ensure that the people who are not part of the complement of the Canadian Forces now, but our reservists, very important pieces, how do they fit into the whole picture?
The Hon. David McGuinty
They fit right into the picture. And they also got major salary and remuneration increases. They are playing key roles. We are expanding our recruitment, 15,000, roughly, strong, split roughly half-and-half into the regular Forces and into the Reserves. We’ve also got 61,500 cadets.
The Hon. Lisa Raitt, P.C.
Yeah.
The Hon. David McGuinty
That’s an important movement. By the way, it’s entirely free, so let your neighbours and your families know it’s a great place for kids to learn lots…
The Hon. Lisa Raitt, P.C.
Yeah.
The Hon. David McGuinty
…from an early age. Many of those kids, not all, but many of those kids at the age of 17, 18 say, “I love it so much, I’d like to go on and continue in the career.” So, we’re treating this as one big family, and investing where we have to, and that includes, like, you know, let’s get basic here, we’re investing in uniforms, female uniforms.
The Hon. Lisa Raitt, P.C.
Yeah. That’s true. I know.
The Hon. David McGuinty
Imagine, kit, weapons, rifles, ammunition, trucks, generator systems. We haven’t updated our generator systems, folks, in three or four decades. You want to run a field hospital, you need generators that are actually interoperable. We’re revisiting all of this from top to bottom, and making the investments and the acquisitions that we need to make to prepare, and give our Forces what they need.
The Hon. Lisa Raitt, P.C.
And how do we make sure that all of those purchases, all of that investment that we’re buying from the marketplace, are Canadian in nature?
The Hon. David McGuinty
Well, as much as we can, this is something that DIS will have more to say about…
The Hon. Lisa Raitt, P.C.
Okay.
The Hon. David McGuinty
…in due course. The Prime Minister’s talked about new approaches to Canadian natural resources, acquiring, using Canadian natural resources, like steel, for example, like aluminum. We’ll have a lot more to say about that.
The Hon. Lisa Raitt, P.C.
Okay, good. We’ll note it’s somewhere between the Budget and Christmas.
The Hon. David McGuinty
Somewhere between the Budget and Christmas,
The Hon. Lisa Raitt, P.C.
Are you going to do it before the House rises?
The Hon. David McGuinty
Somewhere between the Budget and Christmas.
The Hon. Lisa Raitt, P.C.
I’m trying, I’m trying. Can we talk about NATO, for a second? Just NATO writ large, because I know that you are very well briefed and up to date. What would you say is the temperament slash, I guess, how the kids say it? What’s the vibe in NATO right now?
The Hon. David McGuinty
It’s mixed, depending on who you speak with. Obviously, our European colleagues are, I mean, they are very, very consumed with what’s happening in Ukraine. They’re very worried about what’s happening in Ukraine. We’re seeing conduct which is vicious and new. We haven’t even talked about the fact, for example, that the estimates now are that 19,000 Ukrainian children have been abducted.
The Hon. Lisa Raitt, P.C.
Oh, my goodness.
The Hon. David McGuinty
Right? So, in some parts of Ukraine, those under Russian control, families are told, “Why don’t you send your child to summer camp for a week? We’ll take care of the kids for a week,” and the kids don’t come home. And now you can find websites where children who are abducted are, their photos are there, so you can get onto a website and select a blond-haired blue-eyed daughter, or a dark-haired brown-eyed son. So, this is what we’re contending with there. There’s a lot of other surreptitious activity going on. So, folks are really worried, but they’re coming together in a way. And you know what? And I think the United States and President Trump deserve some credit here. Because he came forward and said, “You know, we’ve been carrying the lion’s share of NATO for some time. Maybe it’s time for you members to step up.” And they have, and we have.
But the difference, Lisa, is that we’re not European—but maybe, the most European non-European European country—but we have other responsibilities in the North Atlantic and in the Arctic, which some of our colleagues don’t have. The Scandinavian countries do. We’re working with them on that. I think they’re hopeful because it’s come together in a way that it hasn’t in a while. I’ve just come off this coalition of the willing call. Ukraine needs a lot of support, more support, more financial support, more weapons.
So, we’re working our way through it while we examine, for example, in this case, more onerous, more powerful economic sanctions to bring Russia to heel. So, you know, we’re dealing with shadow fleets of oil vessels that are circumscribing the law, and selling oil all over the world. We need to contend with that. How do we stop that? How do we minimize that? What do we do with stranded Russian assets? Billions, hundreds of billions of dollars, mostly in Belgium. How do we get access to that money, and find the way to put it in the hands of Ukrainians? So, they’re very, very—we’re very tight, we’re very tight. But let’s be honest. For a number of countries, smaller countries in particular, they’re having difficulty in terms of the percentage targets.
The Hon. Lisa Raitt, P.C.
Sure.
The Hon. David McGuinty
But they’re reorienting. And then you have Baltic states are already spending five, six, seven percent of GDP. So, it’s a mixed bag. But I think what I’ve seen from Canada’s perspective—and I’ve been very lucky to be able to do this, and go to NATO meetings, and for the first time say, hey, we’re here. We’ve got 2%. We’ve got something to tell. I think people are very happy Canada’s sort of back, taking on more of a leadership role. And we just renewed our presence in Latvia, Lisa, for another three years.
The Hon. Lisa Raitt, P.C.
Great.
The Hon. David McGuinty
Two-and-a-half thousand members of the Canadian Armed Forces in a forward-operating location there. So, that’s a big commitment to the region.
The Hon. Lisa Raitt, P.C.
Yeah, it is. We’re out of time, but I have one last question for you.
The Hon. David McGuinty
Oh. Sure.
The Hon. Lisa Raitt, P.C.
The most important question of the day. What’s your prediction for the World Series?
The Hon. David McGuinty
Toronto in five.
The Hon. Lisa Raitt, P.C.
Toronto in five. I like that. Do you have a bet with the Secretary of War?
The Hon. David McGuinty
No, no. After this morning’s curveball, we’ve got a bit of a, it’s all [Indiscernible].
The Hon. Lisa Raitt, P.C.
Yeah, indeed, indeed. Minister, thank you so much for your time.
The Hon. David McGuinty
Thank you, Lisa.
The Hon. Lisa Raitt, P.C.
You are super busy, and we are grateful for your service.
Saurabh Popat
Thank you to both Minister McGuinty and Lisa. You’ve helped us look beyond the policy headlines to the real economic and industrial shifts that will define Canada’s strength in the years ahead. Conversations like this highlight how strategy, technology, and collaboration come together to drive national progress. And that’s why the Empire Club here continues to convene these voices at the intersection of business, government, and innovation.
We’re also deeply grateful to our Presenting Sponsor, as well as our VIP Reception Sponsors, McKinsey & Company, for their partnership in making today’s event possible. McKinsey’s global leadership in digital and data transformation is helping industries modernize their capabilities, strengthen resilience, and position Canada to compete on the world stage. Their insights and impact make them an ideal partner for a conversation about how Canada builds the economy of action. To share a few words of appreciation, on behalf of McKinsey, please join me in welcoming Robert Paltor, senior partner at McKinsey & Company.
Note of Appreciation by Robert Paltor, Senior Partner, McKinsey & Company
Thank you for the warm introduction, and thank you to the Empire Club of Canada for convening this discussion. Lisa Raitt, thank you for moderating that session so thoughtfully, and caringly, and insightfully. And Minister McGuinty, thank you for your leadership on this fundamentally crucial file for our country and our future. Minister McGuinty, you’ve reminded us that a stronger Canada begins with a stronger Canadian Armed Forces, and with the partners who equip them to succeed. It’s always a little daunting to try to bring closure to a conversation that touched on so many implications for Canada’s future, particularly when, as global events remind us daily, so much is at stake.
What this conversation has demonstrated so effectively is exactly what we all must be relentlessly focused on, which is the big picture for our country. As a nation, we cannot afford to be focused on or defined by anything less. This goes far beyond putting the right equipment in the hands of the brave women and men who serve. It means strengthening every link in our chain. Because we cannot insist on Made in Canada outcomes unless it is actually possible to make what we need in Canada. We won’t deliver on industrial policy that lifts the domestic defence base without a procurement strategy and a system that is clear, accountable, and performance driven. We won’t have capability or innovation without the nurturing and attracting of talent to design, build, operate, and maintain what it is we create. And most importantly, we will not have a sovereign and secure Canada unless we give our Armed Forces the very best tools to do their jobs on land, sea, air, in space, and in cyber.
I think the goal for our country should be to produce the best equipment as quickly as possible, without over-regulation or bureaucracy distracting from that critical goal. At McKinsey, we are relentlessly focused on helping Canadian leaders turn investments like these into results. We work with our clients on building capabilities, accelerating delivery, and ensuring dollars become deterrents, prosperity, and jobs. Once again, let me take a moment to recognize the Empire Club of Canada for convening us, Lisa Raitt for her stewardship, and Minister McGuinty for his candour and leadership on a file that truly matters to every single Canadian. On behalf of all of us at McKinsey & Company, it has been a great honour and pleasure to sponsor today’s event.
And finally, to the past and current members of the Canadian Armed Forces, and especially to anyone of them who are in the room with us today, thank you for your extraordinary service in keeping Canadians safe at home and abroad. Thank you to everyone, and enjoy your weekend. Go Jays Go!
Concluding Remarks by Saurabh Popat
Just one moment, before we dismiss for this evening, or this afternoon. I just want to thank you again to our panellists, sponsors, and of course to all of you for joining us here today. I’d also like to take a moment to recognize the students and young leaders joining us today. Their presence is made possible through our charitable arm—yes, thank you for joining us, thank you—their presence is made possible through the charitable arm, the Empire Club Foundation, and the generosity of our donors. This support enables us to invite future leaders to take part in today’s dialogue, and empower them to turn knowledge into leadership that shines in communities, boardrooms, and national conversations shaping Canada’s future. To stay connected, please subscribe to our newsletter by scanning the QR code on your tables.
Before we close, I hope that you will join us on November 6th, as we host the Honourable Doug Downey, Attorney General of Ontario. He will reflect on one of the most ambitious periods of modernization in the province’s justice system. And please join us on November 20th for “Protecting Ontario with Historic Investments in Transportation and Infrastructure,” with the Honourable Prabmeet Sarkaria, Ontario’s Minister of Transportation. These events outline record investments in transit, roads, highways, and bridges that keep the people moving, and growing the economy. Tickets for both events are now on sale.
As a club of record, all Empire Club events are available to watch and listen on our website, and the recording of today’s event will be available shortly. Thank you all for being a part of this important conversation. Before we close, I’d like to invite our VIP and head table guests to the VIP reception in this studio, just across the lobby. This meeting is now adjourned, and Go Jays Go. Thank you.
