2024 Reports 8 to 12 of the Auditor General of Canada to the Parliament of CanadaGovernment poorly tracking impacts of industrial and technological benefits
Ottawa, 2 December 2024—A report from Auditor General Karen Hogan tabled today in the House of Commons found that the benefits of the Industrial and Technological Benefits Policy were poorly tracked, while the costs of and the impacts on defence procurements were unknown. From 2014 to 2023, 99 procurements with a total value of at least $39 billion were awarded and included industrial and technological benefits obligations totalling more than $36 billion.
The audit found that Innovation, Science and Economic Development Canada, which is responsible for administering the policy, could not demonstrate that the policy met its objectives, which include supporting the long-term viability and growth of the defence industry. The department did not establish clear rules and guidance for applying the policy, lacked effective ways to measure the policy’s economic benefits and the creation of jobs, and did not track the potential impacts of the policy on defence procurements.
With some exceptions, the policy must be applied to procurements of over $100 million. Additionally, the policy states that an equal amount of the awarded contract’s value is to be invested back into the Canadian economy by a contractor. However, the audit found that in 10 out of 60 procurements over $100 million, the policy either was not applied or did not include the full obligation.
The audit also found that delays in procurement process negotiations and additional costs stemming from contractors managing their industrial and technological benefits obligations conflicted with the goal of the Defence Procurement Strategy to deliver the right equipment to the Canadian Armed Forces in a timely manner.
“Given the extent of the obligations for contractors under the Industrial and Technological Benefits Policy, it is important that Innovation, Science and Economic Development Canada has effective ways to show whether the policy contributes to jobs, innovation, and economic growth,” said Ms. Hogan.
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The 2024 Reports of the Auditor General of Canada, Report 10—Industrial and Technological Benefits, is available on the Office of the Auditor General of Canada website.
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