Industrial and Technological Benefits

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What is the Industrial and Technological Benefits Policy?

Canada’s Industrial and Technological Benefits (ITB) Policy, including the Value Proposition, leverages defence and Canadian Coast Guard procurements to contribute to jobs, innovation and economic growth across the country. The ITB Policy contractually requires companies awarded defence procurement contracts to undertake business activity in Canada equal to the value of the contracts they have won.

The ITB Policy applies on all defence and Canadian Coast Guard procurements over $100 million that are not subject to trade agreements or for which the national security exception is invoked. Defence procurements valued between $20-100 million are reviewed for the possible application of the Policy.

In close coordination with our partner departments under the Defence Procurement Strategy (DPS), Innovation, Science and Economic Development (ISED) is responsible for administering the ITB Policy at every step of the procurement process. The ITB Model Terms and Conditions provide more insight on what is required of contractors under the ITB Policy.

What is the Value Proposition?

Under the ITB Policy, contractors that bid on major defence contracts must submit an economic proposal to Canada, called a Value Proposition. The Value Proposition is a weighted and rated element of the bid selection process and is scored alongside technical and cost requirements.

ISED determines the economic benefit requirements for each Value Proposition on a procurement-by-procurement basis. These requirements are evidence-based and developed through market analysis and industry engagement. Typically, ISED motivates investments across five Value Proposition pillars:

icon_1 Work in the Canadian Defence Industry Support the long-term growth and sustainability of Canada’s defence industry
icon_2 Canadian Supplier Development Support the growth of prime contractors and suppliers in Canada, including small and medium business (SMBs) in all regions of the country
icon_3 Research and Development Enhance innovation through R&D in Canada
icon_4 Exports Increase the export potential and international competitiveness of Canadian-based firms
icon_5 Skills Development and Training Fill skills and training gaps within the Canadian economy to support a more innovative Canada

The inclusion of a Value Proposition under the ITB Policy enables Canada to target investments in strategic industrial areas in order to drive positive, long-lasting economic outcomes. The Value Proposition Guide provides additional information on this important tool.

What are Canada’s Key Industrial Capabilities?

In April of 2018, the Government of Canada released a list of Key Industrial Capabilities (KICs) designed to help target priority investments in areas of emerging technology with potential for rapid growth, established industrial capabilities in Canada, and where domestic capacity is essential to national security. On procurements where there is a market-driven opportunity, ISED will motivate investments into KICs through the Value Proposition requirements.

The Government of Canada developed the current list of KICs following extensive analysis and consultations with over 300 industry and academic stakeholders. KICs support the development of a globally-competitive defence and security sector, but also overlap with commercial and dual-use technologies, and align with Canada’s defence policy, Strong Secure, Engaged (PDF, 13.49 MB, 113 pages) and the Innovation and Skills Plan.

The Department of National Defence’s Defence Capability Blueprint includes details on which KICs will apply to upcoming procurements. Companies can search through the Blueprint to see which procurements involve KICs that align with their business activities.

Get Involved

Find out how your company or organization can benefit from Canada’s ITB Policy here.

ITB Explainer Video

An explanation of how the Industrial and Technological Benefits Policy works and how it helps Canadian businesses grow.

Transcript—ITB Explainer Video

Meaghan Curran, Industrial and Technological Benefits Officer: Are you a Canadian company? Have you heard of the Industrial and Technological Benefits—or ITB—Policy?

What is it?

And how can you benefit from it?

Here's what you need to know.

[Animated graphic of jet engines with ITB – Industrial Technology Benefits moving across screen]

You might be aware that Canada is buying new equipment and services for our armed forces and Canadian Coast Guard.

The ITB Policy is part of a judged bidding process that helps to determine who wins major defence contracts.

[Animated graphics: proposal leaving an office building and moving through to an image of Parliament buildings. A magnifying glass scolls over parts of the proposal to reveal gears, a bag of money and the letters VP. Five proposals drop down from the top of the screen and grow to different heights to resemble a bar graph. The tallest proposal then gets a ribbon that reads "contract."]

Companies who bid on a defence contract submit a proposal to the Government of Canada. This proposal includes a technical submission, which is evaluated by the Department of National Defence, a financial submission, evaluated by Public Services and Procurement Canada, and a Value Proposition, evaluated here at Innovation, Science and Economic Development. The proposal with the highest combined score wins the contract.

[Animated graphics: ITB Policy with image of buildings, dollar sign, equal sign and a proposal, with the image of a bag of money going onto a map of Canada]

The ITB Policy then requires the winning company to invest an amount equal to the contract value back into our economy.

So how do they do this?

[Animated graphics: map of Canada, buildings appearing on map]

They form partnerships and give work to firms in Canada like yours.

They invest in new technologies and research.

And they do this work with Canadian companies both inside and outside the defence industry.

This helps to grow our economy and makes us more innovative.

[Animated graphics: buildings appearing on map of Canada, airplane flowing through]

Now, how can your company get involved?

[Animated graphic: person at desk with RDA sign on front, with list of RDAs (WD - Western Economic Diversification Canada, FedDev - Federal Economic Development Agency for Southern Ontario, ACOA - Atlantic Canada Opportunities Agency]

Talk to your Regional Development Agency representative.

Visit BuyandSell.gc.ca to keep track of upcoming projects and industry meetings.

[Animated graphic of computer showing buyandsell.gc.ca website]

Get to know and get in contact with potential bidders and contractors.

[Animated graphic showing buildings with lines being drawn from business to business]

Find out whether your company needs specific certifications.

[Animated graphic of checklist being checked off]

[Graphic key over host shoulder: Canada.ca/itb]

For more information about the ITB Policy, visit our website or take a look at our other videos.

[Innovation for a Better Canada]

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