Industrial and Technological Benefits
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:
|Work in the Canadian Defence Industry||Support the long-term growth and sustainability of Canada’s defence industry|
|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|
|Research and Development||Enhance innovation through R&D in Canada|
|Exports||Increase the export potential and international competitiveness of Canadian-based firms|
|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.
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.
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