ºÃÉ«tv

The leaked caucus briefing document claims that the bill put forward by Kwan would "decimate" Canada's defence industry and "dismantle" defence sector trade with the U.S. — and even invite retaliation.

The document, obtained by ºÃÉ«tvand Kwan herself, was circulated weeks ago and arms Liberal MPs with blunt talking points that call the legislation "misguided" and claim it would add red tape that would delay defence exports and "compromise our sovereignty."

The document suggests the legislation would hamper Canada's role in NATO, jeopardize the military's operational efficiency and even delay aid to Ukraine.

Kwan said she can easily rebut those claims when she lobbies MPs from other parties to support her bill — a mammoth task, given the current makeup of Parliament.

With just seven seats in the House of Commons following their dismal spring election results, the vastly outnumbered New Democrats would need sweeping cross-party support to advance the bill.

Kwan argues that her legislation is needed to strengthen arms oversight and keep ºÃÉ«tv-made military hardware out of the hands of governments which would use those weapons against civilian populations.

Her private member's bill C-233, which she's calling the "No More Loopholes Act," would add new oversight requirements to exports of parts and components, end permit-free access to the United States for military goods and require companies to obtain end-use certificates from foreign governments.

Kwan contends the U.S. permitting exemption is a major flaw in the system that has allowed military goods shipped to the U.S. to be subsequently sold to countries that could use them in armed conflicts. She pointed to Saudi Arabia, Sudan and Israel as examples.

"If the government thinks that ending Canada's complicity with our arms exports in violation of the Arms Trade Treaty, raining down destruction on civilians in genocide, in war crimes, in crimes against humanity — if they think closing the loophole on that is misguided, I would say it's really a condemnation of the government's view of Canada's integrity," she said.

But both the Liberals and Conservatives argue Kwan's bill could kick up yet another fight with Canada's largest trading partner and undermine the domestic defence sector.

The Liberal caucus briefing document warns the bulk of Canada's defence exports are sent south of the border "in the form of parts" and the restrictions Kwan proposes would "almost certainly disrupt trade and strain diplomatic relationships."

"By framing Canada’s privileged access to the U.S. defence market as a 'loophole,' the bill invites reciprocal action," the document says. "Such retaliation could dismantle trade, strip ºÃÉ«tv firms of near-equal treatment with American counterparts and force the relocation of business lines outside Canada — including by U.S. contractors who dominate our production and export capabilities."

During House of Commons debate on Kwan's bill in recent weeks, Conservatives branded it a job killer.

"Essentially, what the member is trying to do is chase the defence industry right out of Canada and into the hands of Donald Trump," Conservative defence critic James Bezan said on Nov. 19.

Conservative foreign affairs critic Michael Chong warned the legislation could result in a "ban on F-35 parts manufactured in Canada being exported to the United States," further inflaming trade tensions.

The Liberal government maintains that Canada's compliance with the Arms Trade Treaty ensures its export controls are transparent and that the loophole Kwan is talking about is a carefully calculated trade policy.

Ottawa is looking to build up the defence industrial base as it rushes to meet NATO spending commitments, bolster the economy, diversify Canada's trading partners and expand into the European defence marketplace.

When asked whether the Liberal government is considering making any changes to Canada's export regime for military equipment, Foreign Affairs Minister Anita Anand insisted Canada has some of the "most stringent" export controls in the world.

"When we ratified the arms treaty, we actually went above and beyond the requirements in that treaty, and we have countries from all over the world looking to emulate Canada’s regime," she told ºÃÉ«tvon Nov. 26.

"Our plan right now is to maintain that stringent regime in place. It is very important for the purposes of our domestic objectives and internationally for us to have the arms control regime that we have."

Debate on the bill is expected to resume in the new year, likely in February.

This report by ºÃÉ«tvwas first published Dec. 5, 2025.