Industrial and technological benefits
Canada Economic Development for Quebec Regions (CED) is responsible for implementing in Quebec the Industrial and Technological Benefits (ITB) Policy, administered by Innovation, Science and Economic Development Canada. This policy stems from the Defence procurement strategy (DPS). It applies to most major Crown projects for procuring equipment and services for the Canadian Armed Forces and the Canadian Coast Guard (valued at $100 million or more).
The ITB Policy ensures that Government of Canada procurements generate high value-added business for Canadian industry. Thus, companies that enter into defence procurement contracts are required to undertake business activities in Canada with a value equal to that of the contract (i.e. 100% of the value of the contract). Therefore, the extent of those benefits is considered when assessing the bids received further to a call for proposals launched by the Government of Canada.
In the context of the DPS, bidders will have to use the Value Proposition Guide to submit a value proposition that:
- Promotes the long-term growth and viability of Canada’s defence sector
- Develops Canadian procurement sources to promote the growth of prime contractors and suppliers in Canada, including small and medium-sized enterprises (SMEs) in all of the country’s regions
- Improve innovation through technological research and development in Canada
- Increase the export potential of companies established in Canada
To that end, CED promotes the capabilities of Quebec businesses to large companies that are interested in bidding on or have been awarded a contract for a major Crown project.
Calendar of Events
May 31 and June 1, 2017
June 19 to 25, 2017
Le Bourget, France
July 5 to 7, 2017
August 10 and 11, 2017
September 5 to 7, 2017
September 12 to 15, 2017
London (United Kingdom)
October 9 to 11, 2017
October 23, 2017
October 24, 2017
October 25, 2017
Intervention strategy 2021
Profile of the situation
- Quebec’s expertise: Quebec has a great deal of expertise in aerospace, shipbuilding, land transportation equipment manufacturing and in the development and production of built-in components and systems. These are all fields that are likely to receive Industrial and Technological Benefits (ITBs) that flow from the Government of Canada’s defence and Coast Guard procurements. For example, Quebec houses over half of Canada’s aerospace industrial capacity, in addition to having the country’s largest shipbuilding yard as well as a number of medium-sized shipyards; it is also home to leaders in telecommunications, optics-photonics, computer systems integration and simulators. In addition to its industrial capacity, Quebec has assets in R&D infrastructure and networks that support the development of leading-edge technologies. A number of companies are already integrated into the global value chains of foreign prime contractors that have obligations in terms of ITBs.
- Defence and security market: Despite the relatively small size of its market, Canada is among those countries in which defence spending is projected to grow in the next several years as a result of programs to modernize equipment for the Canadian Armed Forces and Coast Guard. The Department of National Defence’s Defence Acquisition Guide lists projects from now through 2021 valued at more than $30B (aviation: over $8B; communications and surveillance: between $2.8B and $7.5B; shipbuilding: between $6B and $7.8B; and land-based equipment: between $3.5B and $7.9B). There is a real potential for Quebec companies to obtain major contracts related to these projects. Furthermore, a number of foreign prime contractors have shown an interest in supporting clean technologies and renewable energy projects.
- Assets: Attractive tax measures and operating costs make Quebec a prime location for businesses that want to expand their footprint. It also has significant innovation capacity and infrastructure (presence of consortiums promoting exchanges between industrial, academic and scientific communities). In addition to aerospace, Quebec has well-established high-tech sectors such as information technology, nano-technology and composite materials, optics photonics, environmental technologies and engineering consulting. Quebec is in a strategic geographic position between Europe and the Americas, which facilitates access to numerous markets. A pool of highly specialized and skilled employees supports Quebec industry.
- Challenges: For a number of Quebec companies operating in sectors of interest, production is primarily geared towards the civil/commercial sector. There is a limited number of integrators and tier 1 and 2 businesses, which makes it more difficult to develop local value chains. Capacity for integration is limited. There is a strong trend towards in-shoring in the United States. Factors such as increased international competition and sectoral labour shortages also affect industry.
Priorities for action 2021
- Enterprises supported by CED are innovative and growing.
ITBs are a means of supporting the innovation agenda by encouraging business expansion, innovation and exports.
- Organizing awareness and training events for ITBs in Quebec (inter alia, the Biannual Symposium on Defence and Security).
- Collaborating in the development of a defence-security portal for SMEs interested in this market.
- Encouraging and promoting the participation of collaborative research consortiums in technological sectors relating to defense and security.
- Developing analyses related to the defence market and ITBs in order to map Quebec’s industrial and research capabilities.
- Supporting high growth firms that could establish partnerships with foreign prime contractors.
- Promote the capabilities of Quebec businesses in the development of clean energy and facilitate networking with foreign prime contractors.
Business opportunities in the defence market
You are an enterprise or research and development facility operating in the following industries:
- Tansportation equipment
- Information technology
- Advanced equipment
With its wide network of federal, provincial and industrial partners, CED can help you identify business opportunities and develop your markets in the defence industry by:
- Informing you about major Crown projects and business opportunities
- Organizing regional tours, industry days, trade missions or targeted meetings with bidding companies
- Taking part in international trade shows in the aerospace, marine and defence sectors to promote Quebec’s capabilities and attract contractors
- Demonstrating industrial capabilities in preparing calls for tenders and value propositions stemming from the ITB Policy
Examples of business opportunities
- Supply of parts or components, from design to assembly and final installation (where applicable)
- Technology transfer or investment by a bidding company that has been awarded a contract to which the ITB Policy applies
- Integration into a contractor’s global supply chain, which can include research, design and production activities
- Creation of a consortium composed of a prime contractor, a Quebec business and a qualified research facility
CED has a directory of Quebec companies with the potential to break into the defence market. It is used to address requests from large bidding companies when they are seeking potential suppliers for meeting their ITB obligations. Apply for registration by email to DEC.RIT-ITB.CED@canada.ca.
- ITB Policy: Frequently Asked Questions - Innovation, Science and Economic Development Canada
- Defence procurement strategy - Public Works and Government Services Canada (PWGSC)
- Defence Acquisition Guide 2016 - National Defence and the Canadian Armed Forces
- Industrial and Technological Benefits - Innovation, Science and Economic Development Canada
- Build in Canada Innovation Program - PWGSC
- Controlled Goods Program - PWGSC
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