THE INDUSTRIAL AND TECHNOLOGICAL BENEFITS POLICY. AeroMontreal 2017
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1 THE INDUSTRIAL AND TECHNOLOGICAL BENEFITS POLICY AerMntreal
2 WHAT IS THE INDUSTRIAL AND TECHNOLOGICAL BENEFITS (ITB) POLICY? Cmpanies awarded defence prcurement cntracts are required t undertake business activity in Canada equal t the value f the cntract This includes a cmmitment t undertake wrk in Canada that: Invlves minimum values f Canadian wrk directly n a prcurement and; Includes wrk with small and medium-sized businesses frm acrss Canada WHEN DOES IT APPLY? All eligible defence and Canadian Cast Guard prcurements ver $100 millin and fr which the Natinal Security Exceptin applies All eligible defence prcurements with cntract values between $ millin will be reviewed fr the applicatin f the ITB Plicy 2
3 WHAT IS THE INDUSTRIAL AND WHAT TECHNOLOGICAL IS THE VALUE BENEFITS PROPOSITION? (ITB) POLICY? The Value Prpsitin is: A bidder s ecnmic prpsal t Canada The rated and weighted element f cntractr selectin alng with technical and cst elements Designed thrugh market analysis, industry engagement and third party cnsultatin A VP prpsal cntains: Plans Cmmitments Identified business activities (transactin sheets) OBJECTIVES OF THE ITB POLICY AND VP Supprt the lng-term sustainability and grwth f Canada s defence sectr Supprt the grwth f prime cntractrs and suppliers in Canada, including small and medium-sized enterprises in all regins f the cuntry Enhance innvatin thrugh R&D in Canada Increase the exprt ptential f Canadian-based firms 3
4 HOW DOES THE ITB POLICY BENEFIT CANADA? Leverages high value investments Weighted factr in winner selectin Criteria tailred t each prject Streamlined Plicy features and prcesses Clear bjectives Defence sectr grwth Supplier develpment, including SMEs Research and technlgical develpment Exprts frm Canada ITB PORTFOLIO at a glance Cntracts $41 B in Obligatins Results have included defence sectr grwth and majr spill- ver benefits t the brader ecnmy $9.3 B Activities in Prgress $3.8 B Future wrk pprtunities 4
5 THE VALUE PROPOSITION IS WORKING Supprting Canada s military fleets, with $1.3B in 2015 (ver half f ITB activities) Canada is attracting earlier cmmitments t R&D investment -- $120M n recent cntracts Defence cmpanies have banked 18 investments ttalling $3.7B fr use n future prjects Cmmitments f $1.9B in exprt sales, expanding pprtunities fr Canadian firms t be embedded in glbal supply chains Accuntability and transparency are encuraging effective participatin by Canadian firms and early achievement by cntractrs ITB PORTFOLIO the last year New Cntracts $3.6 B in Obligatins $3.0 B Activities in Prgress $0.6 B Future wrk pprtunities 5
6 FIXED WING SEARCH AND RESCUE VALUE PROPOSITION The FWSAR Value Prpsitin sught t leverage Canada s strng defence and cmmercial aerspace industrial capability related t the prcurement: Acquisitin Cntract: Mtivate cmmercial and defence aerspace-related activities fcussed n Supplier Develpment, Research and Develpment, and prviding access t Intellectual Prperty ISS f aircraft: Partner with a Canadian ISS Integratr; enable glbal ISS pprtunities thrugh access rights t Intellectual Prperty 6
7 FWSAR ECONOMIC OUTCOMES The Canadian aerspace and defence industries will have greater access t glbal supply chain pprtunities. Fr example: Pratt & Whitney t develp a new engine variant that will be used n FWSAR & ther internatinal rders CAE will design and develp a turn-key training slutin, including manufacture f all simulatin prducts Significant pprtunity fr CAE t develp new prducts/services fr internatinal markets, bth cmmercial and defence Airbus and Prvincial Aerspace have created a jint venture in Canada t manage ISS prgram AirPr will perfrm prgram management activity; engineering services; airwrthiness authrity; and, bslescence management 7
8 FIGHTER REPLACEMENT Maximize Canadian Invlvement Maximize pprtunities fr Canadian aerspace and defence industry, including in-service supprt Innvatin & R&D Drive leading-edge, cllabrative R&D with Canadian industry and academic institutins Supplier Develpment Help build glbally cmpetitive and innvative Canadian supply chain participants, including SMEs Glbal Value Chain/Exprts Strategic wrk packages in glbal value chains, including pssible prduct mandates Open and transparent cmpetitin t replace fleet f CF-18 fighter aircraft + Explring ptential acquisitin f 18 interim Super Hrnets Significant Opprtunity T create high-value jbs and supprt Canadian innvatin acrss the cuntry 8
9 OTHER OPPORTUNITIES Aircraft acquisitin prgrams Existing Obligatins Majr OEM s, and their key suppliers, have apprximately $1.2B in cmmitments, in small businesses t be realized ver the next 20 years. These OEM s include Being, Lckheed Martin, and General Dynamics Jint Unmanned Surveillance and Target Acquisitin (JUSTAS) Industry feedback sught in Request fr Infrmatin in Awaiting results f Defence Plicy Review Ryal Canadian Navy Unmanned Aerial System Lng term strategy t prcure unmanned systems fr Canadian Navy frigates. Industry engagement sessin held March seeking feedback n ptential ptins 9
10 OTHER OPPORTUNITIES Space related pprtunities Opprtunity Current bligatins valued at apprximately $400M, with ptential future prjects t grw t $4B. Current bligrs include MDA, Being and General Dynamics Enhanced Satellite Cmmunicatin Prject (ESCP) Wrking with DND and PSPC n ptential prcurement ptins t be reviewed 10
11 OTHER OPPORTUNITIES Maintenance, Repair and Training Systems Recent annuncements Engine maintenance fr T56 with StandardAer and F404 with Magellan, which included research and develpment cmmitments seeking prcess imprvements Existing bligatins Legacy cmmitments exist n prjects, such as Operatinal Training Service Prvider (OTSP), as well as maintenance prjects n existing DND fleets, including CP140 upgrades; CF-18; Medium-t-Heavy Lift Helicpter; and C130-J Future Aircrew Training (Fact) Aircrew training services prject fr DND t replace NATO Flying Training in Canada (NFTC) and Cntracted Flying Training and Supprt Services (CFTS) cntracts. Industry Engagement Request in 2016 t seek input n ptins, csts estimates and Canadian capabilities 11
12 ITB POLICY TIPS FOR ASPIRING BUSINESSES Be patient! It can take years t build relatinships Determine what area(s) yu want t fcus n air, land, r marine Knw wh the tp bidders and cntractrs are in the sectr yu are fcusing n Investigate whether yur cmpany needs specific credentials r certificatins (i.e. cntrlled gds) Register yur cmpany nline with yur target vendrs fr upcming tenders Determine the Canadian Cntent Value f yur prduct r service. This will be yur cmpetitive advantage! Visit BuyandSell.gc.ca regularly t stay in the knw abut upcming tenders and industry engagements and g t the ITB Website t understand the plicy and prcess Talk t yur Reginal Develpment Agency (RDA) representative and engage with Glbal Affairs Canada s Trade Cmmissiner Service 12
13 NEXT STEPS: MOVING FORWARD WITH A MORE TARGETED, STRATEGIC APPROACH ALIGN WITH GOVERNMENT PRIORITIES KEY INDUSTRIAL CAPABILITIES INDUSTRY ENGAGEMENT TO GAIN INPUT ON POLICY IMPROVEMENT 13
14 QUESTIONS? 14
15
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