Driving job creation and innovation in Canada through defence spending
Canada positioned to lead globally in five emerging technology areas while building on its strengths
April 23, 2018, Ottawa
Canada has a strong and innovative defence industry with over 650 companies that employ more than 60,000 Canadians.
One way the Government of Canada supports this industry is the Industrial and Technological Benefits (ITB) Policy, which requires that for every dollar it spends on big defence purchases, the winning contractor must put a dollar back into Canada’s economy. In the past 30 years, the ITB Policy has generated investments of $30 billion in Canada’s economy, and generates around 40,000 jobs annually.
Through Canada’s defence policy, Strong Secure, Engaged, defence purchases are being used to unlock billions of dollars in economic benefits and create middle-class jobs. To maximize these opportunities, the Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development, today announced that the government will use the ITB Policy to motivate defence contractors to invest in Key Industrial Capabilities (KIC). These are five areas of Canadian industrial strength in emerging technologies, which have the potential to grow quickly, and 11 established industrial capabilities where Canada is globally competitive or where domestic capacity is essential to national security:
- Advanced materials
- Artificial intelligence
- Cyber resilience
- Remotely piloted systems and autonomous technologies
- Space systems
Leading competencies and critical industrial services
- Aerospace systems and components
- Defence systems integration
- Electro-optical and infrared systems
- Ground vehicle solutions
- In-service support
- Marine ship-borne mission and platform systems
- Shipbuilding, design and engineering services
- Sonar and acoustic systems
- Training and simulation
Key Industrial Capabilities align with the government’s Innovation and Skills Plan by supporting the development of skills and fostering innovation in Canada’s defence sector.
“Our defence industry asked for a list of Key Industrial Capabilities, and we delivered. As a result of promoting investment in areas with potential for rapid growth, our armed forces will be better equipped, we will have a stronger economy and we will create thousands of middle-class jobs.”
– The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development
“Canada’s defence industry welcomes Key Industrial Capabilities as an important policy tool to strengthen our government-industry partnership. KICs will incentivize strategic investments in existing and emerging defence and security capability where Canada has leading-edge and globally competitive technologies. The capabilities identified today demonstrate the world-class, innovation-led nature of the defence and security industry here in Canada.”
– Christyn Cianfarani, President and CEO, Canadian Association of Defence and Security Industries
“By defining its Key Industrial Capabilities, the government has provided another significant instrument for leveraging public procurements to increase investment in areas of Canadian industrial strength and opportunity. The strong aerospace presence in the KICs identified by the government today illustrates the strength of our industry, as well as its potential to continue building its competitive advantage in the years ahead. We are very pleased that the government has identified its KICs, and congratulate Minister Bains on the successful launch of this important procurement tool.”
– Jim Quick, President and CEO, Aerospace Industries Association of Canada
The list of Key Industrial Capabilities will evolve over time to reflect technological advances and changing defence requirements and will be reviewed and updated on a regular basis.
Adoption of these Key Industrial Capabilities was first recommended in the 2013 report, Canada First: Leveraging Defence Procurement Through Key Industrial Capabilities (also known as “The Jenkins Report”).
The defence industry is both innovative, with an R&D intensity 4.5 times the Canadian manufacturing average, and export-oriented, with 60 percent of its sales in 2016 taking place in the global market.
From 1986 to 2016, the overall portfolio of ITB obligations included 137 contracts valued at $41.5 billion, with $28.3 billion in business activities already completed, $9.4 billion of activities in progress and $3.8 billion in unidentified future work opportunities.
Follow the department on Twitter: @ISED_CA
Karl W. Sasseville
Office of the Minister of Innovation, Science and Economic Development
Innovation, Science and Economic Development Canada
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