Technological Benefit (ITB) Requirement

A Technological Benefit (ITB) Requirement is the obligation that comes from Canada's Industrial and Technological Benefits (ITB) Policy. Under the policy, a company awarded an eligible defence or Canadian Coast Guard contract must undertake business activity in Canada equal to the value of the contract it has won. The Government of Canada describes this on its ITB policy page as a contractual requirement, not a goodwill commitment.

Federal guidance sets the size of the obligation at at least 100 percent of the contract value. It applies to foreign and domestic firms alike. The official label is the ITB Policy, and the contract terms, the bidder's Value Proposition and the related mandatory criteria together make up the requirement a supplier has to meet.

What the requirement obliges a contractor to do

The contractor must deliver Canadian industrial and technological activity over the life of the contract. The ITB Policy lets the contractor choose activities based on market conditions and opportunities, provided they meet ITB eligibility rules. Activities can relate directly to the procured equipment or services, or they can sit in other business lines. Examples include purchases from unrelated Canadian suppliers, contributions to research and development projects, and funding to expand facilities.

The policy replaced the earlier Industrial and Regional Benefits Policy. The Government of Canada says it was launched in 2014, with a stronger emphasis on innovation, technology and global competitiveness.

When the requirement applies to a procurement

The requirement is not attached to every federal contract. According to the CanadaBuys ITB guidance, the policy applies to defence and Canadian Coast Guard procurements over $100 million that are not subject to trade agreements, or where the national security exception is invoked. Procurements in the mid-range below that threshold are reviewed to decide whether it should apply. The ISED page cites a lower bound of $25 million, while the Defence Procurement Strategy cites $20 million.

The policy can also be applied to other procurements as warranted, whether the approach is competitive, sole-source or government-to-government.

How the Value Proposition is scored

Bidders on covered contracts submit an economic proposal called a Value Proposition. It is weighted and rated alongside the technical and cost components of the bid. The Department of National Defence evaluates the technical submission, Public Services and Procurement Canada evaluates the financial submission, and the ITB authority evaluates the Value Proposition. The bid with the highest combined score wins, as the ITB overview explains.

Value Proposition requirements are developed through market analysis and industry engagement, so they differ from one procurement to the next. The Defence Procurement Strategy links them to the growth of Canada's defence sector, including small and medium-sized businesses, participation in global supply chains, research and development investment, and export potential.

How obligations are verified and enforced

Once a contract is awarded, the ITB terms and conditions become part of it. The ITB model terms and conditions show the structure of these clauses, though the public version is a sample and not a legal document. Each proposed transaction is assessed against criteria including causality, timing, incrementality, eligible donor and level of technology. Credits are based on Canadian Content Value.

Failing to meet the obligations by the end of the contract can carry legal and financial consequences under the contract. Contractors report on their progress, and Canada publishes contractor progress each year. The 2025 ITB annual report estimates the policy contributes more than $5 billion to GDP and over 40,400 jobs annually.

What it means for a supplier bidding on Canadian public contracts

If you bid as a prime contractor on a major defence or Coast Guard solicitation, plan for the Value Proposition from the start, because it is scored and then becomes binding. If you are a Canadian firm that is not the prime, you can position yourself as a source of ITB-eligible work, investment or partnership. The ITB toolkit and the guidelines for third parties explain how outside companies take part. The ITB overview notes that authority for the policy has moved to the Defence Investment Agency, so direct enquiries there.