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2020 Annual report

2020 Annual report

Context

  • The Industrial and Technological Benefits (ITB) PolicyFootnote 1 leverages major defence and Coast Guard procurements to create jobs, drive innovation and foster economic growth in Canada
  • ISED publishes two reports each year in an effort to be transparent about the results and status of the ITB Policy
1) ITB Annual Report
Highlights the economic and innovation impact of the ITB Policy
2) Report on Contractor Progress
Demonstrates contractors’ progress in meeting their ITB obligations

1. Economic impact

The ITB Policy is estimated to contribute close to 46,000 jobs and more than $5.0B to Canada’s GDP annually

Figure 1: GDP Economic Impact Annual AverageFootnote 3 2014-2018

GDP Economic Impact. Long description below.

Source: ISED economic modelling based on the ITB administrative database (IRB Policy (2014), ITB Policy (2014-2018)), 2020; Statistics Canada’s Input-Output multiplier (2016), 2020; ITB investments are based on Canadian content value credited according to the ITB Policy before credit multipliers are applied.

Text version of Figure 1
GDP Economic Impact Annual AverageFootnote 3 2014-2018 ($billions)
ITB Recipients $2.5
Canadian Suppliers to ITB Recipients $1.4
Consumer Spending by Assoicated Employees $1.1

Figure 2: Jobs Economic Impact Annual AverageFootnote 3 2014-2018

Job economic impact. Long description below.

Source: ISED economic modelling based on the ITB administrative database (IRB Policy (2014), ITB Policy (2014-2018)), 2020; Statistics Canada’s Input-Output multiplier (2016), 2020; ITB investments are based on Canadian content value credited according to the ITB Policy before credit multipliers are applied.

Text version of Figure 2
Jobs Economic Impact Annual AverageFootnote 3 2014-2018
ITB Recipients 20,900
Canadian Suppliers to ITB Recipients 13,800
Consumer Spending by Assoicated Employees 11,000

2. Obligation Progress Report

There are 101 active ITB projects resulting in ITB economic obligations of $36B

Figure 3: Current Economic ObligationsFootnote4

Current Economic Obligations. Long description below.

Source: ITB administrative database (IRB Policy (2014), ITB Policy (2014-2018)), 2020; ITB investments are based on Canadian content value credited according to the ITB Policy before credit multipliers are applied.

Text version of Figure 3
Current Economic ObligationsFootnote4 ($billions)
Completed $24.3
In Progress $6.6
Future Opportunities $5.3
  • More than 600 Canadian organizations are benefitting from active ITB projects
  • There is over $5.3B of future opportunities for Canadian companies to develop informed partnering strategies

3. Value Propositions

10 new projects were awarded in 2019, adding over $2.3B in ITB economic obligation

Awarded Contracts in 2019

Resulted in significant commitments in:

  • Defence Sector
  • Supplier Development
  • R&D

Included:

  • Export plans to attract global mandates
  • Export opportunities for SMBsFootnote 2

Introduced:

  • Key Industrial Capabilities (KICs)
  • Skills Development and Training
  • Gender and Diversity Plans

Figure 4: Value Proposition Commitments BreakdownFootnote 5 2019 Awarded ContractsFootnote 6

Value Proposition Commitments Breakdown, Long description below.

Source: ITB administrative database (IRB Policy (2014), ITB Policy (2014-2030)), 2020; ITB investments are based on Canadian content value credited according to the ITB Policy before credit multipliers are applied.

Text version of Figure 4
Value Proposition Commitments BreakdownFootnote 5 2019 Awarded ContractsFootnote 6
Defence Sector 42%
Supplier Development 27%
R&D 15%

4. Commitments by Industry

ITB commitments align closely with regional industrial strengths

Figure 5: Breakdown of ITB CommitmentsFootnote 7 by Industry Active ITB Projects

Breakdown of ITB Commitments by Industry. Long description below.

Source: ITB administrative database (IRB Policy (2014), ITB Policy (2014-2030)), 2020; ITB investments are based on Canadian content value credited according to the ITB Policy before credit multipliers are applied.

Text version of Figure 5
Breakdown of ITB CommitmentsFootnote 7 by Industry Active ITB Projects
  Canada Western Canada Ontario Quebec Atlantic Canada
Space 2% 2% 3% 2% 1%
Information Technology/ Land 23% 16% 31% 23% 5%
Marine 19% 35% 10% 5% 59%
Aerospace 53% 45% 51% 69% 31%
Other 3% 2% 5% 1% 4%
Total 100% 100% 100% 100% 100%

5. Scaling Up SMBs

More than 400 SMBsFootnote 2 are leveraging over $3.4B of ITB commitments as a result of active contracts

  • Over 360 Canadian SMBs are scaling up through supplier development
  • Over 220 Canadian SMBs are supplying goods and services directly related to the procurements
  • Over 25 Canadian SMBs are innovative as a result of ITB investments with a focus on collaborative practices

Figure 6: ITB SMB Innovation Activity BreakdownFootnote8 Active ITB Projects

Scaling Up SMBs. Long description below.

Source: ITB administrative database (IRB Policy (2014), ITB Policy (2014-2030)), 2020; ITB investments are based on Canadian content value credited according to the ITB Policy before credit multipliers are applied

Text version of Figure 6
ITB SMB Innovation Activity BreakdownFootnote8 Active ITB Projects
R&D Investment from prime contractors and tier 1 suppliersFootnote 9 84%
R&D NetworksFootnote 9 8%
Technology Transfer 8%

6. Academic R&D and Skills

Over 40 academic and research organizations are benefitting from innovation and skills commitmentsFootnote 10

Figure 7: Academic R&D and Skills Active ITB Projects

Academic R&D and Skills</b>. Long description below.

Source: ITB administrative database (IRB Policy (2014), ITB Policy (2014-2030)), 2020; ITB investments are based on Canadian content value credited according to the ITB Policy before credit multipliers are applied.

Text version of Figure 7
Academic R&D and Skills Active ITB Projects
R&D Skills Development Both R&D and Skills Development
CCRMFootnote 11 British Columbia Institute of Technology Carleton University
CIMVHRFootnote 11 Camosun College Dalhousie University
CRCFootnote 11 Canadore College McMaster University
DRDCFootnote 11 Cape Breton University NRCFootnote 11
IMTARCFootnote 11 Centennial College NSCCFootnote 11
McGill Conestoga College Queen's University
University of British Columbia Confederation College Simon Fraser University
University of New Brunswick CWAFootnote 11 University Of Alberta
Universite de Sherbrooke IWK Health Centre Foundation University of Manitoba
Western University Memorial University Of Newfoundland  University of Ottawa
York University Polytechnique Montréal University of Toronto
Saskatchewan Indian Institute of Technology University of Victoria
University of Calgary University of Waterloo
University of Northern British Columbia
UOITFootnote 11
University of Regina
University of Saskatchewan

7. Key Findings

In conclusion, the ITB Policy is creating jobs, driving innovation and fostering economic growth in Canada

  • Jobs: 46,000 jobsFootnote 3
  • Future Opportunities: $5.3B
  • Supplier Development: +400 SMBsFootnote 2
  • Innovation and Skills: +40 research organizationsFootnote 10
  • Exports: attracting global mandates + opportunities for SMBs
  • New Features:
    • Key Industrial Capabilities (KICs)
    • Skills Development and Training
    • Gender and Diversity Plans

8. Annex: Economic Impact Methodology Principles

  • Methodology concepts are informed by subject matter experts from the Organization for Economic Co-Operation and Development and Statistics Canada.
  • Foundation data is based on ITB credits and commitments over the period of 2014-2030 as specified on each slide.
    • Annual average economic impact analysis is based on the ITB credits over the period of 2014-2018, with adjustments reflecting the intangible investments and ITB Policy credit multipliers to evaluate the job and GDP impacts.
  • Economic model is based on Statistics Canada Input-Output (I/O) multipliers.
    • Each ITB activity has been linked to the latest (2016) and most relevant economic impact multiplier.
      • All values have been adjusted for inflation based on the Consumer Price Index (CPI) as well as the Bank of Canada's target CPI of 2% and are expressed in 2016 dollars.
    • I/O multipliers have been adjusted to reflect the ITB 100% Canadian content requirement wherever applicable.
    • Job and GDP impact is reported on an annual average basis.
    • Job impacts are measured in terms of full-time equivalent (FTE) employment.
      • Jobs cannot be additive as they are maintained for an extended period after creation.
    • Total economic impact includes the activity that occurs within ITB recipients, Canadian value chain, as well as consumer spending by associated employees across the Canadian economy.
    • All project analysis are based on credits and commitments to date.
    • Economic impact estimates are reported at the national level and cannot be broken down at the regional level.
    • All totals are in Canadian dollars. Foreign currency amounts were converted to Canadian dollars using the Bank of Canada’s annual average exchange rate for 2019.
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