Industrial and Technological Benefits (ITB) Policy

The Industrial and Technological Benefits (ITB) Policy is a Government of Canada policy that requires companies awarded eligible defence and Canadian Coast Guard procurement contracts to undertake business activity in Canada equal to the value of the contracts they receive. Innovation, Science and Economic Development Canada (ISED) describes it as a way to leverage these procurements to support jobs, innovation and economic growth. See the ISED ITB home page.

The policy replaced the former Industrial and Regional Benefits (IRB) Policy and was launched in 2014, as outlined in the Government of Canada policy backgrounder. ISED administers it, and it is applied through procurement terms and conditions, including the ITB Model Terms and Conditions.

Which procurements the ITB Policy applies to

The policy applies primarily to eligible Department of National Defence and Canadian Coast Guard procurements. It can apply to competitive and non-competitive procurements, including government-to-government and Foreign Military Sales arrangements, according to the ITB Policy page.

The value threshold is $100 million. The policy applies to eligible defence and Coast Guard procurements above that amount where the procurement is not subject to international trade agreements, or where the national security exception is invoked. Defence procurements valued between $25 million and $100 million are reviewed for possible application of the policy. Both points are set out on the ITB projects and obligations page.

The Value Proposition at bid stage

Companies bidding on eligible contracts submit a Value Proposition. This is the bidder's proposed set of economic commitments to Canada, describing the investments it would undertake if awarded the contract. The proposal can be a scored and weighted bid factor in the evaluation. For the successful bidder, the Value Proposition becomes a contractual obligation.

Because it can be rated alongside technical and price factors, the Value Proposition is part of how a bid competes, not an administrative add-on. Bidders should read the solicitation closely to see how it is weighted.

How the 100 per cent obligation is met

Under the ITB Model Terms and Conditions, the winning contractor must achieve eligible transactions in Canada totalling not less than 100% of the contract price. The obligation can be fulfilled in two ways:

• Direct activities: work related to the procured equipment or services.
• Indirect activities: work in other business lines.

Contractors must document proposed transactions and provide required business plans for certain transactions. They must also comply with eligibility, reporting and verification requirements. ISED monitors projects through annual reporting and verification to assess whether contractors are meeting their obligations. Current and past results are published in the ITB annual reports.

What it means for a supplier bidding on Canadian public contracts

If you are a Canadian supplier, the ITB Policy creates opportunity beneath the prime contractor. Winning primes must place business activity in Canada, and that work can be direct or indirect. Suppliers with relevant capabilities can position themselves as Canadian partners for those commitments.

If you are bidding as a prime on a major defence or Coast Guard requirement, treat the Value Proposition as a core deliverable. Check whether the solicitation applies the policy, how the proposal is scored, and what documentation the terms and conditions require. After award, plan for reporting and verification from the start, since the commitment is contractual and monitored by ISED.