‘Canada cannot afford to be passive,’ says Joly
‘The ITB will now be directly tied to our defence industrial strategy,’ says Industry Minister Mélanie Joly. / MEANS & WAYS PHOTO
Canada is overhauling how it does business with its defence industry, with sweeping changes to the Industrial and Technological Benefits policy, a new framework for selecting strategic corporate partners and a dedicated government service to help companies navigate procurement and contribute to economic growth, says Industry Minister Mélanie Joly.
“Canada cannot afford to be passive in a world that is changing so quickly,” Joly said in a luncheon keynote speech at CANSEC, a defence, security and emerging technology conference in Ottawa, May 27.
“The ITB will now be directly tied to our defence industrial strategy. That means that decisions are based on what actually builds Canadian industrial capacity, not old regulatory habits.”
The reforms include stronger multipliers to incentivize domestic investment. Companies that expand production or invest in R&D in Canada will be eligible for a five-times multiplier on their ITB obligations. Small and medium-sized enterprises get a dedicated two-times multiplier when used in supply chains — an acknowledgment that SMEs are often squeezed out of large procurement processes. Indigenous skills and training programs will carry a 10-times multiplier, which Joly described as “the biggest multiplier we will have.”
The government is also committing to a 90-day service standard for ITB decisions, addressing long-standing complaints about unpredictable timelines. “I know 90 days is still a lot,” Joly said. “We'll lower that as well.”
Nelio Di Cola, CGI Director Consulting Services, Defence and Public Safety, said the ITB changes are a good example of how Canada can give domestic industry an edge. “Whether it's through additional credits or it's through additional economic benefits, we want to foster and grow the Canadian ecosystem. We have to enable it, and we have to give those Canadian companies a bit more of an edge when it comes to the competition, because the competition is fierce,” he told Means & Ways.
Beyond the ITB, Joly unveiled a strategic partnership framework designed to establish a select group of Canadian firms as preferred long-term collaborators for the federal government on defence priorities. The model is built on “a continuous two-way dialogue at the highest levels of trust, with government bringing forward operational needs and industry bringing forward expertise, innovation and solutions.”
To qualify, companies must be Canadian-owned, contribute to sovereign capabilities, have a proven track record on complex projects, and demonstrate integrity aligned with Canadian values.
“When a company is identified as a strategic partner, it sends a clear signal. This is a firm we will work closely with to deliver on Canada's most important defence and security priorities,” Joly said. “We will choose our strategic partners wisely, and decisions won't be taken lightly, and expectations will be great.”
The third plank of the announcement is a new Defence Concierge Service, to be housed within Innovation, Science and Economic Development Canada. The service is aimed primarily at smaller firms that struggle to connect with the right programs, procurement officers and export pathways. Joly described it as “a more coordinated white glove experience for high-potential firms.”
Practically, she said, it means connecting companies to regional development agencies across the country, as well as to the Trade Commissioner Service for global market expansion. “This is about making government work better for Canadian companies, so that the system is not something that you have to work around, but fundamentally something that actually works for you.”
The announcements are part of a broader defence industrial strategy the government says represents the most significant industrial policy since the Second World War, carrying a $500-billion budget and a goal of creating 125,000 jobs nationally.
Sonya Shorey, President and CEO of Invest Ottawa, said the national capital region alone is targeting $3 billion in new public and private investment, with goals of 18,000 net new jobs and $9 billion in economic impact. She pointed to homegrown companies in drone technology, AI, semiconductor fabrication and autonomous systems as proof of concept.
For Joly, the reforms are ultimately about redefining what procurement is for. “Procurement cannot simply be about purchasing equipment,” she said. “It must be about building our country.”
