How do I calculate Canadian Content Value (CCV)?

Recipients of offset (IRB/ITB in Canada) transactions are frequently asked to sign formal Certifications confirming that your local content, or in Canada, Canadian Content Value (CCV) is true and accurate. To be clear, by signing this certification (which you most likely will have to to sell to large Government contractors), the liability is put onto you, the supplier, to ensure your CCV calculation is correct.

By definition, Canadian Content Value (CCV) is that portion of the selling price of a product or service that includes Canadian labour and materials. CCV does not include product components that were imported into Canada. For the purposes of IRB/ITB valuation, only the CCV of a particular work package is counted toward the completion of an IRB/ITB obligation. CCV is calculated by the Canadian offset recipient and shared with the IRB contractor for their reports. As described above, often the prime contractor will require the recipient of acknowledge through some form of language/a certification such as the following:

“Whereas _____INSERT YOUR COMPANY NAME__________has entered into an agreement with Global Defence Contractor (GDC) which will partially fulfill GDC’s Canadian IRB Obligation, AND WHEREAS such agreement requires that, as evidence of the achievement of Canadian Content Value by the Project, the Company shall submit this Certificate of Compliance to GDC; 

NOW, THEREFORE, the Company declares and certifies as follows: i)The information contained in the Company’s annual report to GDC which  reports achievement of the Canadian Content Value for this Reporting Year, is to the best of our knowledge and ability complete, true and correct; and ii) The Canadian Content Value shown in documents appended herewith has been determined in accordance with Attachment 1 to this certificate.  IN WITNESS THEREOF THIS CERTIFICATE OF COMPLIANCE HAS BEEN SIGNED THIS _date______  BY THE COMPANY’S DULY AUTHORIZED REPRESENTATIVE.”

There are TWO methods by which you can calculate CCV; The Net Selling Price Method or the Cost Aggregate Method:

1) Net Selling Price Method: A product or service which bears a substantiated selling price may have its CCV calculated as outlined in the Model IRB Terms and Conditions.

  • begin with the total selling price of the product or service
  • subtract the applicable customs duties, excise taxes and applicable GST, HST and all provincial sales taxes; and
  • subtract any costs incurred as set out in Article 6.2 (Costs or Business Activities that are ineligible for IRB Credit)

In summary, the Net Selling Price Method starts with the Selling Price of the product or service being sold by the Supplier to the Prime Contractor with only the non-Canadian content items removed from that selling price. This formula is top down.

2) Cost Aggregate Method: Any product or service that cannot be assigned a substantiated selling price may have its CCV calculated as the aggregate of numerous factors that contribute to the product or service. Some examples include:

  • the cost of parts produced in Canada, and the cost of materials to the extent that they are of Canadian origin;
  •  transportation costs, including insurance charges incurred in transporting parts and materials
  • wages and salaries paid for direct and indirect production and non-production labour in Canada paid to Canadians or to permanent residents
  • light, heat, power and water;
  • workers compensation, employment insurance and group insurance premiums, pension contributions and similar expenses

The Cost Aggregate Method builds up Canadian value by adding in all profits, costs, and expenses accrued by Canadian activity while subtracting non-Canadian content. This formula is bottom up.

OMX Tools supporting CCV

The OMX automated CCV calculator is accessed via the “Edit Company” menu through the “Products and Services” sub-menu. An example image is shown below:

Through this tool you can use either method to calculate your CCV and publish this content on your OMX profile, or should you wish to keep the total % private, at the final step of using the OMX CCV Calculator, you can elect to email yourself the spreadsheet.

Please reach out to the OMX team directly for assistance on using the OMX tool or contact Industry Canada with specific policy questions.

Hayley@theomx.com 416 780 9544 ext 115

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Driving business for Aboriginal owned businesses

OMX recently signed an agreement with the Canadian Council of Aboriginal Businesses. Our goal is to drive more business to Aboriginal owned businesses in Canada by sending out opportunities for Aboriginal owned businesses to respond to, and to work with large Corporations to manage, track and report on impacts to Aboriginal owned businesses. I grew up in a Canadian manufacturing business, which was selling primarily to the US market. The majority of our sales were to the US Government and the US Department of Defense. The US have strict set asides, a good portion of which were/are to Native American owned businesses. As a result, we often partnered with local Native American companies, transferred our knowledge and some necessary background IP and then worked along side those companies (one of our factories was in North Dakota – I remember a lot of cold winters spent there).  Instead of giving funding to those communities, the US government was able to help drive increased business to the capable people and businesses to serve as a catalyst and “shot in the arm” to help them either establish or grow. IP transfers and working with experienced partners can set companies up for the long term. I believe this is something we should be seeing more of in Canada. I believe this is something that can be woven right into the fabric of Government procurements, energy agreements and infrastructure spending. We have the people, the resources and the tools available, we just need the will, the direction and some more capacity building efforts.

Check out more on thoughts in the Globe and Mail Op Ed we assisted with along side Chief Isadore Day.

http://www.theglobeandmail.com/report-on-business/small-business/sb-growth/aboriginal-businesses-can-thrive-if-we-provide-the-right-incentives/article28150242/

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OMX Launches New B2B RFP Engine to Unlock Global Defence Opportunities for Canadian Industry

OMX RFP ad

PRESS RELEASE

For Immediate Release                                                                                               July 1st, 2015

TORONTO, ON – On this Canada Day, OMX is proud to announce the official launch of its RFP (Request For Proposal) Engine. This niche engine will bring direct “Business to Business” opportunities to organizations across the country, and allow government contractors to manage their contractual obligations to source and invest in qualified domestic suppliers and partners.

Canadian organizations, particularly SMEs will now have direct access to Real Opportunities in Real Time, with Real Data from international OEM defence contractors. SMEs, a driving force in the Canadian economy, can simply login to OMX, view RFPs and RFQs (Request For Quotes) that meet their capabilities, respond and engage directly.

As an established tech tool in the Canadian defence industry, OMX acknowledges that a mere mention of ‘engaging with Canadian companies’ is no longer a satisfactory strategy for defence procurement. Companies competing on “Best Value Proposition” will need to demonstrate exactly how many sub-contracting companies have received industrial opportunities and its long-term impact to the country. This new OMX tool will also make contractors more competitive and accountable to the Crown by increasing competition in their supply chains and tracking the exact impacts to the country.

“This is a game changer for OMX, but much more importantly, it is a game changer for the Canadian defence industry. Now Canadian businesses and academic organizations will have access to respond directly to real requirements posted by major industrial partners. Prime contractors will be able to provide more open opportunities to more organizations, reducing their costs while demonstrating their commitments to Canada. The bar has been set higher. Today, and especially with this addition to the platform, no company bidding to the government wants their competitor leveraging the advantage of OMX against them” added OMX President, Nicole Verkindt.

OMX is also integrating all of the relevant content from Buy and Sell and the Defence Acquisition Guide (DAG). By including this in the RFP Engine, organizations will be able to search, sort and filter upcoming opportunities from the Department of National Defence much easier and manage it all under one roof. This initiative was done in partnership and with direction from Aerospace Industries Association Canada (AIAC).

All authorized RFP opportunities posted on the OMX platform will be automatically advertised on our LinkedIn, Facebook and Twitter pages. Simply search #OMXunlocked to find them listed on our social networks. For more information on this new feature please visit: theomx.com/opportunities.

OMX Media Contact:

Diego Ortiz

Director, Analytical Communications

diego@theomx.com

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Integran Technologies – HUGE results at a nano scale.

By Chuck Black – OMX Contributor

A $200K award made under the Canadian Space Agency‘s (CSA) Space Technology Development Program (STDP) on May 28th, 2015 to “test and optimize a novel nano-material that has equivalent or better performance than aluminum in mechanical strength and stiffness,” has highlighted the expertise of a small firm focused on the electroplating and electroforming of nanocrystalline metals.

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CEO Gino Palumbo, relaxing at the Integran offices. The COLT carbon fibre hockey stick he’s holding is coated with a Nanovate™ nickel cobalt (NiCo) application, which makes the stick 50% stronger than an uncoated stick and guards against micro-fractures or catastrophic failure during use. The coating also provides 21% more load and release potential (POP) for the equivalent power, which makes slap shots both harder and faster. The hockey stick, built and sold independently using licensed Integran intellectual property, has been promoted in Dragon’s Den, Money Sense and on TSN. Photo c/o author.

All of which sounds pretty boring until you meet Gino Palumbo, the president and CEO of Integran Technologies and he slips into his story telling mode.

We started out in the 1990’s as research group of what was then Ontario Hydro Technologies. Our job was to develop a way to remotely repair localized corrosion in steam generator (SG) tubing at the Pickering Nuclear Generating Station,” he said, during an interview at the Integran offices in May 2015.

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A paper focused on the “ElectrosleeveTM Process for in-situ nuclear steam generator repair,” outlined the process which, from 1992 – 1994, was used to perform repairs at the Ontario Hydro Pickering Nuclear Generating Station unit 5 and eventually became the ElectrosleeveTM process. The full paper is available on the International Atomic Energy Association website at http://www.iaea.org/inis/collection/NCLCollectionStore/_Public/31/006/31006045.pdf.

The solution came through the use of electroplating to produce high strength nanocrystalline materials and eventually became the Electrosleeve™ process for nuclear steam generator repairs.

Shortly afterwards, Integran was spun out as a separate entity with its major shareholder being Ontario Power Generation and Babcock and Wilcox, which had been involved in the commercialization of the technology. In 2004, the company was restructured as part of a management employee buyout.

According to Palumbo, the real secret of what is now called the Nanovate™ process is that it doesn’t just repair objects; it can also make them stronger, using less material for a lower overall weight when compared to a more conventional materials.

The current technology uses nanocrystalline alloys of Nickel, Iron, Cobalt and Copper to coat parts made of plastic and carbon fiber in order to create high performance parts which are lighter, stronger, harder and cheaper than Aluminum; corrosion, waterproof and wear resistant; shielded against low frequency magnetic interference and even able to efficiently absorb energy and noise.

The company is also open to technology licensing for appropriate mass production opportunities and have already licensed to manufacturing partners in Canada, the United States, Mexico and China.

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Integran COO Andrew Wang, R&D unit manager Brandon Bouwhuis, VP R&D Dr. Jon McCrea and CEO Gino Palumbo showcase a variety of parts created using the Nanovate™ process.

>>Follow OMX on Twitter to discover technologies making a difference in aerospace and defence. Converse and share ideas using #OMXtechtalk. 

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Repost: “Kensington Launches $160 Million Investment Fund Under Government’s Venture Capital Action Plan”

Toronto, Ontario, Nov 18, 2014: Emerging technology companies in Canada received a piece of good news today when Kensington Capital Partners announced the launch of the Kensington Venture Fund with an initial closing of investor commitments totaling $160 million.

This move marks the next step in the Government of Canada’s Venture Capital Action Plan. This new fund of funds will invest in promising VC funds and companies in the technology, cleantech, IT, telecommunications, and digital media sectors. The announcement was made at the Canadian Innovation Exchange today in Toronto. Continue reading

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Brican & Applanix Using UAV’s to Map the Earth

by Chuck Black

Brampton, ON based unmanned aerial vehicle (UAV) manufacturer Brican Flight Systems and Richmond Hill, ON based Applanix, an industry leader in mobile mapping products and solutions, have partnered on a package of tools capable of performing comprehensive geographic mapping and referencing.

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Recap of MNP and OMX Webinar : Access FedNor Funding

On October 28th, we had a great discussion during our interactive online webinar on accessing FedNor funding. The discussion was led by manufacturing operational improvement experts from MNP and David Jensen the Offset Manager from Oshkosh Defense. We were also glad to have Fundica gave the overview of FedNor’s funding program.

Thank you to everyone who attended it over Go to Meeting, we look forward to offering you more insights in upcoming webinars. Check out the full recording, including the presentation deck in the video below.

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