New Approach — Strategic Plans from Contractors with Major Industrial and Regional Benefits Obligations

Previous Approach

Contractors identify and meet their Industrial and Regional Benefits (IRB) obligations on a project by project basis and may not integrate IRB planning with broader, long-term corporate strategic priorities. Contractors' IRB activities are identified either in the original IRB Proposal submitted during the bidding process, or after contract award over the life of the contract.

Why change?

The previous approach encourages IRB planning efforts on a project-by-project basis and does not encourage a broader corporate strategy on the part of Contractor. All the IRB credits achieved on one IRB activity can be applied to only one IRB obligation, which may be restrictive for contractors with large IRB obligations across multiple projects. Some strategic, high value IRB business activities may not be pursued because they are too large for any single project.

The new approach is aimed at providing a broader range of options for those Contractors that have large, multi-project IRB obligations over $1 billion. One such option is to permit "pooling" of IRB obligations, allowing high-value IRB activities to be placed on more than one IRB obligation. Additionally, this approach would elevate the level of IRB discussions to more senior and strategic levels in the company and the government. By providing the option to pool existing IRB obligations and facilitating executive-level meetings, the Strategic Plan will encourage the development of more strategic, sustainable, high value IRB activities.

New Approach

Contractors with IRB obligations totaling over $1 billion will be required to submit a Strategic Plan to Industry Canada. Senior officials in both the company and Industry Canada will meet at regular intervals to update, review and discuss the contractor's Strategic Plan.

To ensure fairness, other contractors planning for large, multi-project IRB obligations will also have the option of submitting a Strategic Plan to Industry Canada, even though their total obligation may fall below $1 billion. However, meetings between senior officials of the company and Industry Canada will not be provided.

The Strategic Plan should describe the company's broad corporate plans for Canada, over the medium-term (3–5 years) and long-term (5+ years) and how these plans might translate into strategic IRB activities, above and beyond the IRB proposals submitted for individual projects. The Strategic Plan should also provide an overview of the company's current and anticipated IRB obligations and activities, as well as its IRB partnerships with major sub-contractors.

Contractors submitting a Strategic Plan may be permitted to "pool" high value, strategic IRB business activities — that is, apply the IRB credits achieved to more than one project's IRB obligation. Pooled IRB activities must meet all of the regular IRB eligibility criteria related to causality, timing, incrementality, eligible party and Canadian Content Value. In addition, pooled IRB activities will be assessed against a broader set of quality criteria, such as: high value (i.e., over $100 million), long term impact, R&D support, first purchase of innovative Canadian technologies, uniqueness in Canada, market leadership, world product mandate, global value chain, consortia, small & medium-sized business (SMBs) or technology advancement.

Contracts for individual projects will continue to be the primary instrument of IRB administration. New language regarding the Strategic Plans and pooling will be inserted into new and existing contracts.