Frequently Asked Questions — Strategic Plans from Contractors with Major Industrial and Regional Benefits Obligations

  1. Why are you creating Strategic Plans?
  2. How will a Strategic Plan work?
  3. What exactly should the Strategic Plan contain?
  4. Will a Strategic Plan represent a new contractual obligation for companies?
  5. What is the difference between this new Strategic Plan and the "Company Business Plan" that bidders submit as part of their IRB Proposals?
  6. How will proposed IRB activities be assessed to see if they are eligible for pooling?
  7. If approved, what will be the mechanics for pooling an IRB activity?
  8. How do we know that companies will even submit a Strategic Plan? What if a company refuses to submit one? Is there a deadline to submit and then to update?
  9. What happens if a pooled activity evolves such that it no longer meets the "strategic" criteria?
  10. What is the role of the Regional Development Agencies (RDAs) with respect to Strategic Plans?
  11. Currently, contractors work with the specific IRB Managers on individual procurements. How will this change for Strategic Plans?
  12. How will a pooled IRB activity be verified and by who?
  13. Will you place a cap on the amount of pooled IRB activities that can be applied to any one IRB obligation project?
  14. Why are you limiting the number of companies that will be able to attend regular meetings?
  15. Won't incentives towards higher value IRB activities have a negative impact on SMBs located in Canada's regions?
  16. The Strategic Plan would necessarily contain very sensitive company information regarding future plans and activities. How will Industry Canada ensure that this information is adequately protected as confidential?

 

  1. Why are you creating Strategic Plans?

    We want to encourage higher level, more strategic Industrial and Regional Benefits (IRB) planning by companies and more strategic relationships between contractors, Canadian recipients and the government. In short, we want to broaden the nature of engagement for companies with very large, multi-project IRB obligations.

    The previous approach encouraged IRB planning efforts on a project-by-project basis, which was sometimes limiting for companies that face a significant value of IRB obligations across multiple contracts. Some strategic, high-value IRB activities were not being pursued because they were too large for any single IRB project.

    The new approach regarding Strategic Plans is aimed at encouraging companies to strategically plan high-value IRB activities across corporate units. The approach also seeks to elevate discussion on IRB activities to executive levels within the Contractors and the government.

    http://www.ic.gc.ca/eic/site/042.nsf/eng/00034.html#q1
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  2. How will a Strategic Plan work?

    Companies with an IRB obligation 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 company's Strategic Plan.

    Other companies with, or planning for, IRB obligations will also have the option of submitting a Strategic Plan to Industry Canada. Regular meetings between senior officials of the company and Industry Canada will not be provided.

    Companies submitting a Strategic Plan may be permitted to "pool" high value, strategic IRB business activities-that is, apply the IRB credits they achieve on one activity to more than one project's IRB obligation.

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  3. What exactly should the Strategic Plan contain?

    Companies will be provided with a template guiding them in preparing their Strategic Plan.

    Generally speaking, the Strategic Plan should include:

    • A high-level outline of the company's corporate plans for Canada, over the medium - (3–5 years) and long-term (5 years+), along with an explanation of how these plans can contribute to the Canadian economy.
    • An overview of the company's current and anticipated IRB obligations and activities, as well as its IRB partnerships with major sub-contractors.
    • A description of any proposed IRB business activities where pooling will be requested.
    http://www.ic.gc.ca/eic/site/042.nsf/eng/00034.html#q3
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  4. Will a Strategic Plan represent a new contractual obligation for companies?

    No.

    The IRB Autority will require companies with an IRB obligation totaling over $1 billion to submit, update and meet regularly to discuss their Strategic Plan.

    However, companies, simply by virtue of submitting a Strategic Plan, will not be obligated to the government in any way to carry forth with the business activities described therein. A company's IRB Plans and Transactions, submitted as part of a specific procurement process and attached to a contract, will remain the vehicle through which IRB commitments are enforced and administered.

    http://www.ic.gc.ca/eic/site/042.nsf/eng/00034.html#q4
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  5. What is the difference between this new Strategic Plan and the "Company Business Plan" that bidders submit as part of their IRB Proposals?

    The Company Business Plan is submitted by a bidder as part of their IRB Proposal and as such, it is evaluated as part of the formal bid evaluation process. The Company Business Plan should outline the business operations of a bidder and its major subcontractors and describe the role that each will play on a particular procurement project. The Company Business Plan should also address corporate functions such as planning, marketing, R&D, etc.

    The new Strategic Plan is quite different. It is not submitted as part of a bid procurement process, it is not evaluated or scored, and it will not have an impact on a company's success or failure in a specific bid process. The company information in a Strategic Plan should be focused more broadly, capturing the company's long term, strategic plans for Canada in a detailed and comprehensive way.

    http://www.ic.gc.ca/eic/site/042.nsf/eng/00034.html#q5
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  6. How will proposed IRB activities be assessed to see if they are eligible for pooling?

    Proposed IRB activities must meet all of the IRB eligibility criteria outlined in the contract's IRB Terms and Conditions-causality, timing, incrementality, eligible party and Canadian Content Value.

    In addition to meeting these, any IRB activities proposed for pooling will also be assessed against a broader set of quality criteria in order to be eligible, including: 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, SMBs or technology advancement.

    Additionally, companies must identify up-front the specific IRB obligations and amounts to which the pooled IRB activity would apply.

    http://www.ic.gc.ca/eic/site/042.nsf/eng/00034.html#q6
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  7. If approved, what will be the mechanics for pooling an IRB activity?

    First, new contractual language related to pooling will be inserted into the IRB Terms and Conditions of existing and future contracts.

    At the point when an IRB activity has been approved for pooling, the company will be asked to prepare separate transaction sheets for each project to which the IRB credits will be applied. These transaction sheets will be added to the contractor's existing IRB contract(s). Pooled IRB activities cannot be placed directly into a company's IRB proposal in a competitive procurement.

    Pooled IRB activities will be subject to all the usual IRB Terms and Conditions. In addition, all IRB activities, including those accepted for pooling, are subject to annual reporting and verification before IRB credits are awarded.

    http://www.ic.gc.ca/eic/site/042.nsf/eng/00034.html#q7
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  8. How do we know that companies will even submit a Strategic Plan? What if a company refuses to submit one? Is there a deadline to submit and then to update?

    Companies with large, multi-project IRB obligations have indicated to Industry Canada that they welcome the opportunity to engage with us through the submission of Strategic Plans.

    Companies with more than $1 billion in IRB obligations will be asked to submit a Strategic Plan, update it annually and discuss it with Industry Canada on a regular basis.

    The timing of submitting a Strategic Plan is at the company's discretion and there is no formal penalty for non-submission. However, a Strategic Plan must be submitted, reviewed and assessed before an IRB pooling activity will be considered or approved.

    http://www.ic.gc.ca/eic/site/042.nsf/eng/00034.html#q8
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  9. What happens if a pooled activity evolves such that it no longer meets the "strategic" criteria?

    It will be the responsibility of the company to demonstrate annually that a pooled activity continues to meet the quality criteria. In cases where a company does not demonstrate the continuing strategic nature of a pooled activity, pooling will be discontinued for that transaction.

    http://www.ic.gc.ca/eic/site/042.nsf/eng/00034.html#q9
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  10. What is the role of the Regional Development Agencies (RDAs) with respect to Strategic Plans?

    The RDAs are key members of the government IRB team. They assist the IRB Authority in determining IRB strategies for individual projects and evaluating IRB bid proposals. They play a key "matchmaking" role between contractors and Canadian companies in their regions. In addition, they bring industrial knowledge and experience to assist in the implementation of the IRB Policy.

    In light of this relationship, we will invite the RDAs to participate in the review and assessment of Strategic Plans and requests for pooling. We will also encourage contractors submitting Strategic Plans to engage effectively with RDAs to take advantage of their knowledge and experience.

    http://www.ic.gc.ca/eic/site/042.nsf/eng/00034.html#q10
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  11. Currently, contractors work with the specific IRB Managers on individual procurements. How will this change for Strategic Plans?

    Contractors should continue to work closely with the IRB Managers for their respective projects and IRB obligations.

    The IRB Directorate will identify a single point of contact for companies regarding the submission of their Strategic Plans and the associated dialogue. This contact person will also coordinate within the IRB group as a whole for the subsequent activities, such as review by appropriate IRB officials, organization of meetings between senior officials and coordination of pooling activities between projects.

    http://www.ic.gc.ca/eic/site/042.nsf/eng/00034.html#q11
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  12. How will a pooled IRB activity be verified and by who?

    A pooled IRB activity will be subject to the same verification processes as all other IRB activities. When a contractor submits its annual IRB Report for a particular project, the IRB Manager undertakes a verification process.

    In the case of pooled IRB activities, the individual IRB Managers will collaborate and determine together what verification activities should take place each year. In this way, the company will be subject to one coordinated verification process each year for a pooled transaction. r

    http://www.ic.gc.ca/eic/site/042.nsf/eng/00034.html#q12
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  13. Will you place a cap on the amount of pooled IRB activities that can be applied to any one IRB obligation project?

    At this time, there is no cap.

    Pooling is new to the IRB Policy and we want to implement the approach in an effective manner.  A cap may unduly limit a company's ability to bring forward large, strategic business activities, the development of which is the goal of Strategic Plans and pooling. These larger activities have the potential to bring significant economic benefits to many segments of the Canadian economy, including regions and SMBs.

    We will encourage contractors with pooling requests to engage with IRB Managers and, in particular, with the RDAs to maximize the regional and SMB connections in their Strategic Plans. As we test our new approach over time, and have a better understanding of its impact on Canadian industry, we are certainly open to reconsidering the application of a cap.

    http://www.ic.gc.ca/eic/site/042.nsf/eng/00034.html#q13
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  14. Why are you limiting the number of companies that will be able to attend regular meetings?

    Industry Canada recognizes that Canada's fair and open procurement process means that the ability to submit a Strategic Plan, and request pooling, must be available to all stakeholders.

    However, regular meetings between Industry Canada and companies with IRB obligations under $1 billion will not be provided.

    It is simply not feasible for Industry Canada to initiate and organize a large number of new senior level meetings each year. Of course, companies who wish to meet with any IC official will continue to be able to request a meeting.

    http://www.ic.gc.ca/eic/site/042.nsf/eng/00034.html#q14
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  15. Won't incentives towards higher value IRB activities have a negative impact on SMBs located in Canada's regions?

    The creation of Strategic Plans is aimed at encouraging IRB engagement and planning at higher levels within defence companies and the government. More strategic IRB planning does not in any way exclude SMBs and/or those located in Canada's regions. In fact, it is often those two elements of Canadian industry which represent the best IRB success stories and which can potentially benefit the most. In addition, we will encourage contractors submitting a Strategic Plan to engage with RDAs to take advantage of their knowledge and experience and maximize regional and small business connections.

    http://www.ic.gc.ca/eic/site/042.nsf/eng/00034.html#q15
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  16. The Strategic Plan would necessarily contain very sensitive company information regarding future plans and activities. How will Industry Canada ensure that this information is adequately protected as confidential?

    Industry Canada recognizes the commercial confidentiality of the information it receives from companies and will ensure that Strategic Plans are handled appropriately.

    All IRB officials have secret clearance and are fully aware of their responsibilities regarding protected and confidential documents. Further, Industry Canada has a rigorous system in place for the receipt, storage and transmission of sensitive documents.

    http://www.ic.gc.ca/eic/site/042.nsf/eng/00034.html#q16
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