Industrial Regional Benefits (IRBs)

Industrial Regional Benefits (IRBs) were commitments that winning suppliers made to generate economic activity in Canada as part of major government contracts. If you're researching this term today, here's what you need to know: IRBs were replaced in 2014 by the Industrial and Technological Benefits (ITB) Policy, which shifted the focus from regional economic development to national industrial and technological advancement.

How It Works

The original IRB policy required companies awarded significant defence and security contracts to invest in Canadian businesses and create jobs. Win a contract, commit to spending that benefits the Canadian economy. Pretty straightforward.

When the government revised the policy in 2014 under the Defence Procurement Strategy, it became the ITB Policy. The new framework maintains the core principle but broadens the scope. According to Innovation, Science and Economic Development Canada (ISED), companies winning eligible defence and security contracts must now undertake business activities in Canada equal to 100 percent of the contract value. Dollar for dollar.

In practice, these commitments become part of what's called the Value Proposition—a weighted criterion that evaluators score during the bid evaluation process. Suppliers don't just promise compliance after they win; they outline their ITB plans as part of their competitive bid, which means the strength of those commitments can determine who actually gets the contract. ISED administers the policy and monitors whether companies follow through over the life of the contract, which can stretch for years or even decades on major defence platforms. The Supply Manual, Canada's authoritative procurement reference available at CanadaBuys, doesn't currently include specific coverage of IRBs or ITBs in its chapters or annexes, reflecting that these policies are managed outside the standard PSPC procurement framework.

Key Considerations

• The terminology shift matters. If you're reviewing older contracts or evaluation documents from before 2014, you'll see IRB references. Anything after 2014 should reference ITB. Don't confuse the two when analyzing historical procurement patterns.

• Not every contract triggers ITB requirements. The policy applies specifically to defence and security procurements that meet certain thresholds. Routine PSPC contracts for office supplies or IT services won't include these obligations.

• Compliance is measured over time. Companies don't fulfill their 100 percent obligation on day one. ISED tracks activities throughout the contract period, which can span years or even decades for major defence platforms.

• The Value Proposition changes the competitive dynamic. A supplier with a lower price but a weak ITB plan might lose to a competitor offering stronger Canadian industrial benefits. It's a weighted evaluation criterion, not just a compliance checkbox.

Related Terms

Defence Procurement Strategy, Value Proposition, Canadian Content Policy, Bid Evaluation, Weighted Criteria

Sources

• Supply Manual - Canada Buys

• Industrial and Technological Benefits Policy - ISED

• Industrial and Technological Benefits Overview - Innovation, Science and Economic Development Canada

If you're analyzing a procurement from DND or working with defence contractors, understanding whether ITB applies—and how suppliers structured their Value Propositions—gives you essential context for how the contract was awarded and what economic commitments the government secured.