Over the last ten years, I’ve been involved in more than forty million dollars’ worth of Industrial and Technological Benefits (ITB) transactions into Canadian SMBs, relieving hundreds of millions of ITB obligations for international defence prime contractors. I’ve seen the system work. I’ve also seen it almost work.
I started in defence in 2010, and in those days there was more political jockeying around programs getting started and cancelled than funding being spent. The climate now has changed significantly, but SMBs should be wary of the idea that it is suddenly easy. Canadian defence is rife with risk aversion, and newcomers need to generate legitimacy in their prospects’ eyes through multiple touch points and added value.
For companies operating successfully in the commercial world, with steady clients and great products, they may feel they understand the environment and products they sell, and rightfully so. The tidal wave of defence funding announcements sets the stage for a perception that this understanding carries into their new dual-use vertical, with many “tourists” — defence and ITB consultants who have entered the industry in the last year without any track record — promising them easy success, bigger contracts, more money, and a self-funded step into the world of bigger business.
My first real exposure came in 2016, when my own company received its first ITB Investment Framework (IF) investment from Boeing, and later through additional ITB investments with Boeing, Babcock, Thales, and others. Those investments helped us build products, hire people, develop our own IP, and prove that a small Canadian company could do meaningful defence and aerospace R&D work.
But there was also frustration, even when we were able to land an ITB. A prime would invest, we’d build something useful, they’d get their offset and a nice press release, but the product wouldn’t always enter their supply chain. It was a win for meaningful R&D, but not for the commercialization of sovereign Canadian capabilities.
That experience changed how I think about ITBs.
The old pitch was, “Here is a Canadian company, with promising technology, please invest.” Sometimes that works, especially if the technology is truly exceptional. But for most Canadian SMBs, the stronger path is different. Do the work first. Understand where you actually fit in a prime’s supply chain. Find the capability gap. Show how you can help them deliver, reduce risk, meet obligations, support Canada, and eventually export. The ITB investment should not be the beginning of the story. It should accelerate a commercial relationship that already makes sense.
The most successful and predictable ITBs have come when a client finds a real need inside a prime’s supply chain. They are directly supporting the prime’s obligation, filling a gap, and helping the prime deliver. Sometimes that gap is technology. Sometimes it is simply strong SMB Canadian content value. Once that happens, the support needed to build these programs comes much easier. If there is a cart and a horse, the ITB is the cart. It generally does not break out ahead.
COTA was one of my first clients at Dewis Ventures, and is still a valuable client today. When I first met Dorian and Kyle, they were capable, ambitious, and pushing into a market that is not easy to break into, especially in 2022, when the industry felt a little more like pushing rope uphill than it does in today’s dual-use excitement.
Defence is not a place where you show up with a brochure and get work. You need certifications. You need quality systems. You need controlled goods. You need to know where you fit inside a prime’s obligation and the end user’s needs. And then you need to stay with it for years.
COTA did the work.
One of COTA’s first ITB investments came in 2023 from Babcock. By then, COTA had established itself as a reliable supplier to Babcock and built relationships with their team. In parallel, COTA had been selected as the only compliant bidder for the Victoria-class submarine galley refit, although the contract had not yet been awarded.
The program required robust quality assurance. On the Victoria-class submarines, Canada reserves the right to audit your quality system with 24 hours’ notice. This investment from Babcock helped COTA find the tools and develop the readiness it needed to execute on the work they were awarded later that year, making the company the first SMB prime contractor on a Canadian submarine refit program.
The investment did not sit on a shelf. It helped build a stronger company, and that stronger company moved into real Canadian defence work as a prime contractor.
In 2024, the Government of Canada announced Boeing’s $61 million ITB investment into British Columbia’s aerospace sector as part of Canada’s decision to procure up to 16 P-8A Poseidon aircraft. Of that, Boeing committed $13 million to COTA.
Boeing saw the vision of a future supplier. They wanted to invest in their supply chain and strengthen it, and COTA also brought other strategic value: Indigenous ownership, advanced manufacturing potential, a growing aerospace and defence workforce, and a location in British Columbia where real capacity could be built.
The investment was tied to a hands-on aerospace manufacturing training facility, modern advanced manufacturing equipment, robotic automation and workforce development in British Columbia. COTA was then able to use the cash on hand to access provincial matching funds, multiplying the value of the original investment and creating even more capacity.
Boeing invested in capability and capacity. But more importantly, Boeing brought COTA further into its supply chain, helping move meaningful aerospace and defence production into Canada.
The new capability didn’t stop there. Under the ITB IF program, the investment was non-dilutive: COTA owned the equipment. The complete overhaul of the shop and the readiness that came with it helped sell COTA to other primes. As the COTA team delivered quality, time and again, contracts started to grow, and then they started to export.
The primes were no longer just using COTA to meet obligations in Canada; the transformation that had taken place brought their manufacturing foundation to where they were now able to solve their ongoing supply chain issues and provide ongoing value.
That’s why the success of COTA highlights how ITBs are supposed to work. It’s not just a story about ITB investments: the investment didn’t stop at unused capability, the new capability turned into meaningful work, and the work turned into export.
This is how the ITB program is supposed to work. Not investment for investment’s sake, a one-time project that disappears after the credit is claimed, disconnected R&D that proves something but never becomes part of a supply chain.
That’s how procurement becomes industrial capacity, the ecosystem working the way we keep saying we want it to work. Federal defence procurement creates the demand signal. The ITB system turns that demand into Canadian investment. Primes bring work, equipment, training, and supply-chain access. Provincial programs help close the capital gap. The company does the hard work of building, hiring, certifying, delivering, and staying credible. And the Canadian Armed Forces get a stronger domestic industrial base behind the equipment they rely on.
Canada’s Defence Industrial Strategy is built around a simple frame: build, partner, buy. Build in Canada where we have sovereign capability. Partner with allies where it makes sense. Buy from abroad when needed, but with strong conditions that drive reinvestment into the Canadian defence industrial base and protect Canadian control over operation and sustainment.
COTA is what that strategy looks like when it lands on a shop floor in Parksville.
The updated ITB Policy points in the same direction. ISED says the policy has been updated to maximize the contribution of defence procurement to Canada’s industrial base, strengthen Canadian companies, and direct investment toward priority defence capabilities.
The new Strategic Investment Transaction framework includes enhanced credits for the kinds of things that actually build capacity: 5x for facility establishment or expansion, 5x for R&D and commercialization, 5x for Canadian-owned IP development, 4x for equipment purchase or in-kind transfer, 2x for direct work with small and medium-sized businesses, 5x for skills development and training, and 10x for Indigenous workforce development.
In other words, the system is now being tuned toward the exact lesson COTA demonstrates: invest in Canadian facilities, Canadian equipment, Canadian workers, Canadian-owned capability, Indigenous participation, and serious SMBs that can scale into defence supply chains.
The lesson for primes is just as important. The strongest ITB strategies are not built at the end of a procurement, when everyone is scrambling for credits. They are built early, by identifying Canadian companies that can become part of the delivery model. Not every investment will become a long-term supplier relationship, but the best ones should be designed with that possibility in mind.
COTA’s team deserves every credit for making this happen. They chased the work. They built relationships. They handled the audits, certifications, proposals, negotiations, delivery, hiring, and execution.
Boeing, Babcock, and the other primes involved deserve credit for seeing a real Canadian capability and helping it grow. ISED and the Canadian ITB system deserve credit for creating a mechanism that can turn defence spending into Canadian jobs, Canadian infrastructure, Canadian manufacturing, and Canadian know-how. The CAF and PSPC also deserve credit for selecting a Canadian-owned SMB as prime contractor on a complex program, and for realizing the cost and time savings of that decision.
For Canadian companies, that means the opportunity is real, but it is not automatic. The work is not to chase every defence program, every prime, or every pool of ITB money. The work is to understand where your company can matter. Where do you reduce risk? Where do you add capacity? Where do you fill a gap that a prime, the CAF, or Canada’s defence industrial base actually needs filled?
That is the difference between being interesting and being useful.
If you are a Canadian SMB with real capability, the question is not, “How do we get ITB money?” The better question is, “Where do we fit, who needs us to fit there, and what do we need to build so they can trust us with real work?”
That is where the opportunity is. Not in chasing the policy, waiting for a prime to discover you, or assuming Canadian content is enough.
The companies that win will be the ones that: understand the market, find the gap, build the credibility, align with the program, and show why working with them makes the prime stronger and Canada stronger.
And that is how ITBs are supposed to work.
If you have a credible product, service, technology, manufacturing capability, or dual-use offering that could support Canada’s defence, aerospace, marine, infrastructure, security, or Arctic priorities, now is the time to assess your fit.
The opportunity is not “free ITB money.”
The opportunity is to become a useful Canadian supplier in a market that is being rebuilt around sovereignty, speed, industrial capacity, and national security.
That means understanding:
Where you fit
Which primes care
Which programs matter
What your Canadian Content Value is
Which Sovereign Capability you support
How your offering helps the prime commercially
How your offering helps the prime meet its ITB obligations
What you need to become prime-ready
That is where Dewis Ventures helps.
We help founder-led Canadian SMBs enter and win in Canada’s defence, aerospace, marine, and dual-use supply chains by translating real commercial capability into defence-market positioning, ITB alignment, prime-ready messaging, and practical outreach.
If you are ready to understand where your company fits, book a Defence Market Fit Assessment.
Schedule your Free ITB Assessment.