Sale of MDA units leaves Canada's space ambitions in the air: Garneau

The announced sale of MacDonald, Dettwiler and Associates Ltd.'s satellite and space businesses to a U.S. company raises questions about Canada's future role in space and whether the country can maintain a satellite program of its own, according to the former head of the Canadian Space Agency.

Richmond, B.C.-based MDA, best known for developing the distinctive Canadarm space shuttle technology, announced late Tuesday it had sold the aerospace businesses to U.S. weapons and rocket maker Alliant Techsystems of Edina, Minn., as part of a $1.325-billion cash deal.

The sale includes the division that developed the Canadarm robotic arm, used on space shuttle missions and on the International Space Station, and also includes ownership and operation of Radarsat-2, a satellite launched in December that government, space and military officials said would act as a tool to protect Canada's Arctic sovereignty.

Ex-astronaut and former Canadian Space Agency head Marc Garneau told CBC News the sale raises the delicate issue of whether Canada wants its eye on the Arctic run by a foreign company.

"The concern is we might not have 100 per cent control of that satellite from now on," said Garneau, who is running as a Liberal candidate in the next federal election.

Under a deal between MDA and the government — which contributed $430 million to the project through the Canadian Space Agency — MDA owns the satellite and can generate revenues from commercial contracts with other nations, while federal government departments in turn will be able to access information from the satellite at no cost.

Canadian Space Agency spokesman Paul Engel told CBC News the potential change of ownership of MDA's satellite business to a U.S. firm wouldn't alter the deal the government struck, and that the contract would be fully honoured.

A blow to Canada's orbital aspirations?

Garneau said he doesn't doubt Alliant — also known as ATK — would honour its end of agreement, but he suggested the loss of a national manufacturer of MDA's calibre could have an impact on future satellite endeavours and may play a role on the kinds of technology Canada has access to in the future.

"The question is more that if the Canadian space industry is to be viewed as a strategic asset, then maybe we should exercise greater control in building and maintaining our own satellites," he said.

But the industry in Canada still has dozens of strong companies capable of competing on an international stage, Engel said. So far, however, no Canadian-owned company has taken on as ambitious a project as building and maintaining a satellite like Radarsat-2.

Ottawa-based Telesat owns and operates its satellites but contracts out their construction. European-based manufacturer EADS Astrium built Telesat's Anik F3 satellite, which launched last April.

Canadian-owned Bristol Aerospace Ltd. in Winnipeg, a division of Toronto's Magellan Aerospace, built the main body of the ozone-observing Scisat-1, which launched into orbit in 2003. Scisat, however, was considerably smaller, weighing 150 kilograms compared with Radarsat-2's 2,200 kg.

Bristol has for the most part kept to smaller, lower-cost projects. Many other Canadian-owned companies, such as COM DEV, Optech and Neptec, produce component parts for larger projects rather than contribute the base technology.

Spinoff benefits for other companies

Still, the MDA units for sale — which employ 1,900 people, including 800 engineers — represent "the crown jewel" of robotics and aerospace work in Canada, Garneau said.

Alliant has argued the sale will actually help business in Canada, since the newly formed division — called ATK Space Systems and comprising the MDA units and some of Alliant's U.S. operations — will be better able to secure contracts. Having U.S. ownership makes it easier to compete for U.S. military contracts, Alliant spokesman Bryce Hallowell said.

William Melek, a professor in the University of Waterloo's mechanical engineering department and the director of the school's Laboratory of Computational Intelligence and Automation, said he was disappointed at first to hear of the sale of a Canadian icon, but agreed it will be good for the industry.

"They have a much higher potential for growth now, so I expect them to hire more engineers to meet the new demand should they get those contracts," Melek said. MDA said it will use most of the proceeds from the sale on acquisitions to support its information-products division.

Garneau agreed both companies will likely prosper from the deal, but he said economics shouldn't be the only thing taken into consideration. He said he would like the federal government to review the sale.

The sale comes in the same week the Canadian Space Agency announced that its president, Laurier Boisvert, left the post in December for personal reasons, after only nine months on the job. Guy Bujold, an assistant deputy minister at Industry Canada, will run the agency on an interim basis until a new full-time president is found.

Prior to Boisvert taking the job in April 2007, the top position at the agency had been vacant for a year and a half after Garneau resigned to run for office in the 2006 federal election.

Garneau added that should the MDA sale go through, Canada's lack of a national space policy would be to blame. He points to the government's refusal in September 2006 to support a contract that would have allowed MDA and others to build the European Space Agency's Mars surface rover as an example of a lack of commitment to space programs.

MDA had asked for $100 million over 10 years to be redirected from existing Canadian Space Agency projects to go to fund the manufacture of the ExoMars rover for its planned exploration of Mars by 2015.

"If you're going to say MDA must stay Canadian, it involves a level of commitment, and that means making it viable for a company to do business here," Garneau said.