This flow chart shows 2 streams of defence procurement values and whether the Industrial and Technological Benefits Policy applies.

Please see the Link opens a PDF file in a new browser windowfull report to read our complete findings, analysis, recommendations and the audited organizations’ responses.

We found that Innovation, Science and Economic Development Canada lacked some elements to ensure sound administration of the policy, such as clear rules and guidance on how to apply the policy and good tracking of contract obligations, economic benefits, and job creation.

Innovation, Science and Economic Development Canada—responsible for administering the Industrial and Technological Benefits Policy—was unable to demonstrate that the policy met its objectives, which included supporting the long‑term viability and growth of the defence industry. Delays in procurement process negotiations and additional costs stemming from contractors managing their industrial and technological benefits obligations conflicted with the goal of the Defence Procurement Strategy to deliver the right equipment to the Canadian Armed Forces in a timely manner.

Note: Procurements for the Canadian Coast Guard also follow this decision tree, but this audit did not include Industrial and Technological Benefits Policy contracts involving the Canadian Coast Guard.

If the procurement is subject to trade agreements but a national security exception has not been invoked, the policy does not apply.

The Industrial and Technological Benefits Policy applies to defence procurements over $100 million with some exceptions and may be applied to defence procurements between $20 million and $100 million. Industrial and technological benefits form part of the bidding process that determines who is awarded major defence contracts. While the policy states that an equal amount of an awarded contract’s value is to be invested back into the Canadian economy by a contractor, we found 10 procurements out of 60 over $100 million where either the policy was not applied or the investment in the economy was less than 100% of the awarded contract’s value.