Canada's Defence Modernization Push: ITB Policy Drives Economic Contribution
Canada's federal government is investing heavily in modernizing the Canadian Armed Forces and reducing reliance on the U.S. for defence capabilities. A key policy driving this initiative is the Industrial and Technological Benefits (ITB) Policy, which requires defence companies to contribute economically to Canada. Companies must submit a value proposition detailing their proposed economic contribution as part of their bid.
The ITB Policy, a fundamental element of defence and security procurement, has five primary objectives: supporting long-term growth of the defence sector, supporting contractors and suppliers, boosting innovation, increasing export potential, and identifying skills development opportunities. After contract award, companies must fulfil their ITB Policy commitments and achieve an economic contribution to Canada equal to the value of the awarded contract.
Compliance with the ITB Policy is regularly monitored. Companies are required to submit annual reports detailing their achievements towards ITB Policy and value proposition commitments. Despite its significance, information about specific companies applying for major defence contracts under the ITB Policy, their compliance, and resulting benefits for Canada is currently scarce.
Understanding the ITB Policy is crucial for companies interested in doing business in the Canadian defence and security sector. The policy applies to defence and Canadian Coast Guard procurements over $100 million, requiring companies to engage in business activity in Canada equal to the value of the awarded contract. General criteria for evaluating a value proposition include work in the Canadian defence industry, Canadian supplier development, research and development in Canada, exports from Canada, and Canadian skills and training development.
