The Canadian House of Commons voted Wednesday to defeat Bill C-233, the No More Loopholes Act, at second reading, killing legislation that would have required Canadian military exports destined for the United States to undergo the same permit review and human-rights risk assessments applied to all other export destinations.

Tabled in September 2025 by NDP MP Jenny Kwan of Vancouver East, Bill C-233 sought to amend the Export and Import Permits Act to close a longstanding exemption under which roughly half of Canada’s defence exports, those shipped to the United States under a bilateral defence production agreement, flow without individual permits, case-by-case risk review, or public reporting. The bill would also have required the minister to obtain end-use certificates where there is a substantial risk that exported arms could facilitate war crimes, and would have mandated annual parliamentary reporting on military exports and compliance with the Arms Trade Treaty, which Canada ratified in 2019.

Advocates for the bill argued its passage was particularly urgent given the current geopolitical climate. Under the Trump administration, the United States has launched military strikes against Iran and expanded its military operations across multiple countries, with Canadian-made components documented in F-35 fighter jets and weapons systems that have been transferred to Israel, which continues its assault on Gaza and its military campaign in Lebanon, where credible allegations of violations of international humanitarian law have mounted.

A November 2025 report by the Arms Embargo Now coalition titled, Exposing the U.S. Loophole: How Canadian F-35 Parts and Explosives Reach Israel, documented hundreds of shipments of Canadian-made military components flowing to Israel via U.S. intermediaries. The report traced 360 shipments of aircraft parts from Canadian manufacturers to Lockheed Martin’s F-35 assembly facility in Fort Worth, Texas, between September 2023 and August 2025, and documented 34 subsequent shipments of military aircraft components from American Lockheed facilities to the Israeli Ministry of Defense, the Israeli Air Force, and Israeli weapons manufacturers in the period immediately following. It also documented 150 shipments of Canadian explosives and flammable materials from General Dynamics facilities in Valleyfield and Repentigny, Quebec, to U.S. Army ammunition plants that manufacture 2,000-pound MK-84 bombs and 155mm artillery shells for export to Israel. The Valleyfield plant is the sole North American supplier of M31A2 triple-base propellant, a material used to fire the artillery shells Israel has deployed in Gaza. The report further identified 433 shipments of Polish-manufactured TNT routed through Port Saguenay, Quebec, before being trucked to U.S. ammunition plants producing the MK-84 and I-2000 Penetrator bombs Israel has dropped on Gaza. The report concluded that the current regulatory exemption for U.S.-bound arms allows the transfer of materials worth over a billion dollars annually without permits, human rights assessments, or parliamentary oversight.

Among those voting against the bill was Public Safety Minister Gary Anandasangaree, a former human rights lawyer who built much of his pre-political career advocating for accountability in cases of mass atrocity, including on behalf of Tamil Canadians affected by Sri Lanka’s civil war. Prime Minister Mark Carney and Foreign Affairs Minister Anita Anand also voted no. Anand, speaking in the House before the vote, called the bill “irresponsible,” arguing it “would decimate Canada’s defence industry” and “weaken Canada’s role in NATO.” The Arms Embargo Now report directly named Anand, noting that she had publicly assured Canadians that the government would “not allow Canadian-made weapons to fuel this conflict in any way,” a claim the report characterized as contradicted by the documented shipments.

In a February 2026 Globe and Mail article, Canadian former foreign affairs minister Lloyd Axworthy and former justice minister Allan Rock directly rebutted the arguments the government deployed against the bill. On jobs, they wrote that Bill C-233 does not restrict manufacturing, sales, or innovation, and that factories would continue to operate with jobs intact under the proposed regime. On NATO, they noted that nearly every NATO member is a party to the Arms Trade Treaty and that many allies apply oversight to all exports including those to the United States, making Canada’s blanket exemption the outlier rather than the norm. On Ukraine, they clarified that military assistance to Ukraine flows through a separate, expedited process within the Department of National Defence and is entirely unaffected by the bill. Axworthy and Rock also flagged the Trump administration’s conduct as a reason to act with particular urgency, noting that American forces had violated international law and that military goods should not be shipped to the United States without assurance they would not be used unlawfully.

Fifteen Liberal MPs broke with their caucus to support Bill C-233, among them former environment minister Steven Guilbeault, floor-crosser and Nunavut MP Lori Idlout, former House Speaker MP Greg Fergus, and Scarborough Centre MP Salma Zahid, who challenged her government’s talking points from the House floor on Monday. “Jobs are not at risk here,” Zahid told the House. “What is at stake is our moral authority and Canada’s global brand as a principled exporter.” Green Party leader Elizabeth May and all six New Democratic MPs also voted in favour. Every Conservative and Bloc Quebecois MP who voted cast a nay.

Because the bill was defeated at second reading, it will not proceed to committee study. Kwan argued the government had shut down a process, committee review and amendment, that could have addressed concerns from both the defence sector and human rights advocates. “What we have seen instead are attempts to dismiss the bill with arguments that simply do not stand up to scrutiny,” she said.

The Arms Embargo Now report reached the same conclusion as Axworthy and Rock, arguing that the exemption amounts to a deliberate strategy of regulatory negligence that allows Canada to distance itself from the end use of its military exports while remaining, in the coalition’s words, “an active participant” in the ongoing conflict in Gaza. Both the report and the former ministers noted that without a permitting process, Canada has no mechanism to ensure that components shipped to the United States are not later incorporated into weapons sold to high-risk end-users, and that Canada’s exemption is inconsistent with both the spirit and the letter of the Arms Trade Treaty.