NyRAD

By: Stephanie Batstone, Managing Partner, NyRad

July 28, 2026

The transfer of Canada’s Industrial and Technological Benefits (ITB) Policy to the Defence Investment Agency (DIA) could be more than an administrative change. It has the potential to fundamentally reshape how industrial priorities are built into defence procurement.

For industry, the stakes are significant. ITB and Value Proposition requirements influence teaming, supplier selection, investment, pricing, contractual risk and long-term program execution. When those requirements arrive late or are applied inconsistently, bidders are forced to make major commitments without enough time or certainty. When they are integrated early and aligned strategically with procurement objectives, they can help build lasting Canadian industrial capability.

The real promise of the DIA is not that ITBs will become easier. It is that they could become clearer and more closely connected to the defence outcomes Canada is trying to achieve.

Better alignment between ITB/VP requirements and bid timelines

One immediate test will be whether ITB/VP requirements are integrated with technical and pricing requirements early enough for bidders to respond responsibly. As government prioritizes faster procurement, the time available to develop VP/ITB strategies is shifting dramatically: companies that once had months, or even years to prepare, are, in some cases, being asked to respond in weeks. In these cases, bidders may be expected to identify Canadian suppliers, negotiate scope and pricing, assess Canadian Content Value, evaluate eligibility, and make contractual commitments while also preparing multiple mandatory plans for the proposal.

This is not a recipe for strategic industrial planning. It encourages rushed commitments, uneven supplier engagement, conservative assumptions, and avoidable execution risk. A centralized DIA process could help by ensuring ITB/VP requirements are developed alongside technical requirements, pricing structures, evaluation criteria, and proposal timelines. Done well, this would give bidders a clearer view of what Canada is trying to achieve, and enough time to build credible commitments into their bid.

A stronger link between ITB execution and the Defence Industrial Strategy

The second opportunity is strategic alignment. Under ISED, ITB administration, as experienced by industry, was focused on compliance against a complex rule set. Compliance matters, but the Defence Industrial Strategy creates a broader policy frame: building Canadian industrial capacity, strengthening supply chains, supporting innovation, growing small and medium-sized businesses, developing skills, and improving Canada’s ability to deliver defence capability.

If DIA officials administer ITBs through that lens, the discussion with industry could shift from “does this meet the rule?” to “does this activity produce the kind of industrial outcome Canada is trying to achieve?” That does not mean weakening compliance. It means using compliance as a disciplined mechanism to support policy objectives, not as an end in itself.

For bidders and contractors, this could improve planning. A clearer connection between ITB crediting rules and defence industrial priorities would help companies decide which partnerships, investments, R&D activities, supplier development efforts, and workforce initiatives are most likely to create value for Canada and be accepted by the government as eligible ITB activities over the life of the obligation.

Meaningful escalation when rules and outcomes diverge

The third change may be the most practical: escalation. ISED is a broad department with responsibilities ranging from economic development and data gathering to space, tariff relief, and industry funding programs. That breadth made it difficult for senior decision-makers to be deeply engaged in the operational realities of each defence procurement or the ways ITB/VP interpretations shape industry behaviour.

A DIA executive team focused on defence procurement, investment, and industrial outcomes could create more meaningful escalation points. When industry believes a rule is being interpreted in a way that undermines the Defence Industrial Strategy, there should be a forum to discuss the issue at a strategic level. Dialogue like this is important not only for resolving disputes but also for maintaining trust between government and industry as Canada asks companies to make long-term commitments in support of national defence priorities.

What industry should watch for next

The DIA shift will not automatically simplify ITB management. The policy will remain technical, contractual, and long-term. But it could change the operating environment by leading to requirements being defined earlier, better alignment between bid evaluation and execution, clearer policy objectives, faster approvals, and more strategic escalation.

For industry, the question is therefore not simply who administers the ITB Policy. The question is whether centralized defence investment leadership will make ITB/VP planning more realistic at bid stage and more purposeful during execution. If it does, the transfer to the DIA could become an important step toward making Canada’s economic benefits policy a more effective tool for defence industrial growth.