Thank you, and good morning. Bonjour.
At the outset, I want to thank the members of this committee for giving us the opportunity again to participate in these important deliberations regarding upcoming budgets.
My name is John Keating. I am the CEO of a company called COM-DEV. With me today are some other members of Canada's space team: Paul Cooper, from MDA, in Toronto, Montreal, and other parts of Canada, best known for the organization that built the Canadarm 1 and Canadarm 2, RADARSAT, and the soon-to-be-launched RADARSAT-2; Ken Gordon, from Telesat, Canada's leading satellite service company, the guys who provide the silent glue that holds our telecommunications infrastructure together in Canada; and Dave O'Connor, from Magellan/Bristol in Winnipeg, designers and builders of Canada's new small type bus. Together with many other firms across the country, we are Canada's space team, providing technology and infrastructure to facilitate the ongoing growth of our economy and strengthen our social and economic union.
You will have received a copy of our submission to the committee, which outlines our perspective on the current situation facing Canada in this area. We've also circulated to members some examples of why space is important to Canadians. Space technologies are largely taken for granted. They are, however, absolutely essential to our everyday lives. I'd summarize our brief as follows.
Canada and Canadians are justly proud of our achievements in space. As the third nation in space, Canada has a magnificent track record. Although our program is small in comparison with other nations, we've established ourselves as world leaders in key niche technologies. Our success has been built on a common understanding that space offers unique solutions. With Canada's vast land mass, a three-ocean coastline, and untapped mineral and environmental riches, space is a strategic capability that has been and will be instrumental to Canada's success.
However, as you will have read in our brief, the government-industry partnership that contributed to our current position has been allowed to break down. At a time when our competitors around the world are benefiting from very substantial investments in national and international space programs, Canada has seen its investments in space technology and research decline, in real terms, by 40%. Meanwhile other nations in Europe, the United States, Japan, Russia, and developing countries such as Brazil, India, and China are all investing heavily in new space programs to meet strategic national priorities.
So what does this mean for Canada's space sector? First of all, I'm proud to report--I have to tell you--that my own company, COM-DEV, is doing very well. We've just announced a terrific third quarter. Our revenues are up 32% over last year. Margins and return on equity are at high levels, our backlog is very healthy, and our prospects going forward into the next year are very robust. So we're doing very well. Others in this sector are posting similar performance. So given these results, why should we be here today expressing our collective concern about the decline in the Canadian government's space investment?
The reason is that we're successful today in part because we are reaping the benefits of the technology developed five to eight years ago. The space business has long cycles indeed. On a global basis, growth and innovation in this sector are driven by technologies created in national programs. In Canada's case, these include such programs as RADARSAT and the Anik F2 broadband communication satellite.
Although the government's investment in space accounts for only a small part of annual space expenditures--in Canada, it's only 10%--it's a strategically important part. Government programs enable the development of leading-edge technologies and provide an opportunity to prove that technology by being the first user. Industry, then, aggressively markets this technology to the rest of the world. This has been the secret of our success. That's why our modest space program has consistently created world-leading technologies and scientific excellence. Today we see a declining investment in Canada and dramatically increased investment elsewhere in the world. The dilemma for us is how do we in Canada stay at the forefront of technology development when the investments required are only to be found offshore?
As our submission states, the Canadian space program urgently needs government attention. We need leadership at the Canadian Space Agency, and we need direction. That direction can only come through a consultative process leading to a new and invigorated national space plan. We need a plan for Canada, one that's targeted in our national interests: in security, coastal and Arctic sovereignty, environmental monitoring, resource management, and advanced communications infrastructure. All of these objectives can be provided through secure indigenous Canadian technology alternatives.
Speaking for the leading players in Canada's space industry, we urge members of this committee to confer with the Minister of Finance and the Minister of Industry to recommend that action on Canada's space priorities be brought forward for consideration in budget 2008. There is much work to do. We in industry are ready to work with the government to define the way forward. Failing to act could well result in the loss of strategic national capability and our independent access to space. These are necessary to meet the clear and urgent needs of Canada, both now and in the future.
Thank you very much for listening to me.