It has the potential to boot Canada's technology sector up a notch or two. But only a few people know about it. And they're not talking.

Canada's multi-billion dollar program of Industrial and Regional Benefits (IRB) isn't new. It may already drive a sizeable part of Canada's defence industry.

The secret pertains to tech companies outside the military space. Most are missing the boat on opportunities to sell their products and services to a fleet of foreign companies. Even tech companies that have heard of the program don't know how to participate.

So, here's how it works. Suppose the Department of National Defence needs to buy helicopters. Or armoured personnel carriers. Or frigates. And suppose an American company wins the contract to supply them. In return for selling its gear in Canada, that supplier agrees to spend the whole contract value in Canada, buying from Canadian businesses. It sounds impossible, but read on.

It will spend a portion of its commitment on the actual defence contract, designing, manufacturing and assembling in Canada. These are called "Direct IRB" transactions, and they go mainly to Canadian defence subcontractors – sometimes Canadian subsidiaries of the same American firm that won the contract.

But (here's where you put on the cone of silence): these companies are permitted to spend a chunk of their commitment on a whole variety of work in Canada that doesn't have anything to do with their defence contract. These are "Indirect IRB" transactions, and they generate work that wouldn't otherwise come here.

For example, an aircraft manufacturer may have $400 million in IRB obligations to spend in Canada. In addition to the military aircraft it's building for DND, the company sells passenger jets all over the globe. And, by the way, its next-generation jet needs a new system of reading lights and upgraded air-conditioning for the cabin, a microwave oven for the galleys, and an internal, wireless communications device for the crew. If it can purchase these items with Canadian content (just like TV shows), the aircraft manufacturer chalks up an indirect credit.

You get the picture. As you read this, a host of foreign companies are eagerly looking to engage Canadian firms. They've agreed to spend billions of dollars in Canada. So why doesn't this program show up on more people's radar screen?

It's a bit like a restaurant owner who's discovered a great California red wine. And he happens to have enough customers to drink the entire world's supply. He's not going to run down the street and tell other restaurant owners about this wine.

On top of that, the government doesn't advertise much. But small and mid-size players in the tech sector are missing out for other reasons, too.

For one thing, defence contracts develop at the speed of Darwinian evolution. These companies may build hyper-fast fighter jets, but the engagement process chugs along like a tractor on the shoulder of a side road. Once you identify a fit with a foreign participant in the IRB program, it can take years to cultivate a relationship. Firms that play in the military space are geared to long waits on the tarmac, but the rest of us aren't.

Secondly, the IRB program is dauntingly complex. It's operated by Industry Canada, with input from three other government departments. National Defence identifies purchasing requirements. Public Works handles contract bid processes. Industry Canada oversees IRB criteria, and Treasury Board gives final financial blessing.

Thirdly, companies that owe IRB credits are huge. Selling to them is a bit like sitting down to eat an elephant. You aren't even sure which end offers the best cuts of meat.

Another side of the same challenge plagues the big, foreign companies. When they need to spend $300 million in Canada, they don't want to spend it $20,000 at a time. The big defence contractor doesn't want the hassle of dealing with a thousand little companies.

So, who are you gonna call to help you get your foot in the door? Several consulting firms in Ottawa and other Canadian centres specialize in helping foreign companies find Canadian suppliers. These consultants are like buyers for a huge, foreign retail outfit. And they'd like to hear from you.

They'll charge you a fee, but the returns can be worth it. You might hire them for a short, trial period to generate introductions. Like NHL talent scouts, these consultants are also paid by the foreign clients that want to work with you. So you may be able to reduce or eliminate their fees once you demonstrate your company's abilities.

Whether you engage a consultant, or tackle the elephant yourself, the IRB program and its participants represent a huge business opportunity for Ottawa technology firms. Too often we hear about government programs, aimed at promoting business, that have gone off the proverbial rails. This is one program that's on-track and picking up steam. Don't miss the train.

By Michael Wakim

Special to the Ottawa Business Journal

Michael Wakim is president of Fidus Systems Inc., an electronic design services firm based in Ottawa and Toronto. The company designs electronic products for a range of industries. Fidus has designed and consulted on more than 480 projects for 120 customers across North America and Europe.