Evidence of meeting #24 for Industry, Science and Technology in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was mda.
A recording is available from Parliament.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Okay, but whatever they make, do you have a lot of orders on the board?
Spacecraft systems engineer, MacDonald, Dettwiler and Associates Ltd., As an Individual
That's probably partly why the company is splitting, in some sense. There is an information products division that will go on and still be MDA, and that company does a lot of Internet transactions with thousands of things happening every second. But in terms of satellites, there are only so many satellite orders on the books, and that's not a very large number.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Are there any on the books? Are there any satellite orders on the books?
Spacecraft systems engineer, MacDonald, Dettwiler and Associates Ltd., As an Individual
Yes.
Spacecraft systems engineer, MacDonald, Dettwiler and Associates Ltd., As an Individual
Well, MDA is currently busy making missions that have been booked, but it's true that there is a coming shortage of future space missions.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
So we've invested a huge amount of money. What was it, $435 million?
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Didn't the government--and it doesn't matter which, the government at the time--have a plan, while they were investing this money, to build an industry, to build capacity, so we would create jobs for Canadians? I mean, it's great to do this stuff, and I'm as proud as anybody else of this satellite, but wasn't there a plan to build an industry? Have we failed?
Maybe I should ask this question to Mr. Garneau.
Spacecraft systems engineer, MacDonald, Dettwiler and Associates Ltd., As an Individual
I think we have built an industry, and it has been successful. The government has even planned to build future satellites along the lines of RADARSAT-2, such as the RADARSAT Constellation mission I mentioned.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
That's good. I recognize it.
I'm looking at it, I guess, as a businessman. I'm looking at it as an industry that has to make some money. Have we succeeded?
I think I want to switch to Mr. Garneau.
Conservative
The Chair Conservative James Rajotte
Mr. Van Kesteren, Mr. Garneau has indicated that he'll go. And Mr. Byers would like to answer.
Former President, Canadian Space Agency, As an Individual
Yes, the whole idea is to grow the Canadian space industry. We keep revenue figures, and from 1996 to the present it has grown considerably. It's about a $2.5 billion industry in terms of revenues, looking at all space services and products, and it has grown steadily over time.
So yes, that is the plan, and it's also to build that capability.
The challenge that Canada has, if you compare us to the United States.... Look at Boeing or Lockheed Martin. They're big guys in the United States. They have access to potential contracts from NASA, which has a $17 billion annual budget, about 55 times bigger than the Canadian Space Agency budget. And I'm not mentioning their military budget, which is not published, but it is at least as big as the civilian budget. So when difficult times occur within the civilian side, there are huge projects on the military side. Companies like Boeing and Lockheed Martin are sustained even through difficult times because there is such a large number of programs coming from the U.S. government.
In Canada we have a challenge: we have a $300 million budget. With that budget we try to satisfy our Canadian requirements, what I told you before about trying to build the industry as well. It's a tribute to our industry that it's managed to secure as many export sales as it has.
But it is not a free trade situation when it comes to the aerospace industry, and that is why in my final comment I said that we also have to provide Canadian companies like MDA with some viable continuity in Canada because of--
Conservative
The Chair Conservative James Rajotte
Mr. Garneau, we're well over time, and I did promise Mr. Byers he'd have a moment.
Professor, Canada Research Chair (Tier One) in Global Politics and International Law, University of British Columbia
I want to come back to my analogy of the polar icebreaker that your government has so wisely committed to build, and also to the six to eight ice-strengthened patrol vessels.
First of all, you're not going to get that kind of service, that kind of public good, provided by the private market. Secondly, if you wanted to acquire those vessels at the very cheapest price, you'd actually buy them from South Korea or Finland, and I sure hope that your government has decided you're going to build them in Canada.
There are some things that cannot be reduced to a bottom line, as much as we would like them to be.
Professor, Canada Research Chair (Tier One) in Global Politics and International Law, University of British Columbia
I think we need to consider RADARSAT-2 in the context of that icebreaker--as sovereignty assertion.
Conservative
The Chair Conservative James Rajotte
Thank you, Mr. Byers.
Thank you, Mr. Van Kesteren.
We'll go to Ms. Nash, please.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Well, all of the witnesses have expressed opposition to this sale. Some people have evoked the memory of the Avro Arrow. The minister has the power to block the sale if there's no net benefit, but if the sale is blocked, then it raises the problem of future business for MDA.
I note that Canada has no space policy. Perhaps we've failed to fully invest in our space program. So my question is, are we living up to our potential with this sector? It seems as though Canada has been a real pioneer, a real innovator, very successful, but we have no space policy. Does that matter? And if the deal does not go through, what are the alternatives?
I throw that out to all of the witnesses.
Chair, Rideau Institute on International Affairs
In my experience, we have been trying to advance the idea of a space policy for Canada. The Rideau Institute has been engaged with a variety of stakeholders within government, in the public sector, and in the private sector.
To address Ms. Nash's comments and the previous ones, it seems to me that investment in the space industry, even as small as it has been, has yielded tremendous results. For instance, the Canadian government put $150 million into Canadarm for the space shuttle, and revenues coming back out of that were in the range of $900 million. In the international space station, the government invested $1.4 billion, which resulted in economic activity between 1991 and 2000 of $2.7 billion and provided 45,000 person-years of employment.
So I think it has been a huge net benefit and works on an economic and financial model. These figures are provided by Athena Global, which is a space investment firm. I've met with its president, Andrew Eddy, who raised the alarm at a recent round table we held that Canada's investment in space and our industry is slipping. In fact, among the G-8, we are one of the few members whose investment in space, as a percentage of GDP, is actually going down, whereas everyone else is moving up. With statistics like this, we know why the Europeans, the Americans, and the other countries are putting investments in space, and we do need a policy.
So if we are to properly nurture this—and Mr. Thompson has talked about other programs that have been sitting on the order books unfulfilled that MDA could be participating in—they wouldn't need to do a sale like this. Their shareholders would be perfectly happy and the Canadian taxpayers would be happy, and we would have a vibrant industry producing wonderful technologies and astronauts.
Professor, Canada Research Chair (Tier One) in Global Politics and International Law, University of British Columbia
I agree with Mr. Staples, in that I have no worry whatsoever about MDA continuing to make handsome profits even if the sale of RADARSAT-2 is blocked.
RADARSAT-1 made $26 million in 2004 alone for the federal government, much of that from these kinds of green activities: ice-mapping, agricultural, and forestry. There's a huge demand for high-quality imagery.
What MDA is doing is chasing the easiest market, which is the military market, and primarily the U.S. governmental military market. But forced to compete for other kinds of contracts, there's no question in my mind that this technology can compete with the very best technology in the world, and MDA will make lots and lots of money even if the satellite stays in Canada.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Mr. Thompson, do you have any thoughts on it? I've heard about this Constellation mission and its environmental applications. Is that something that is being invested in or could be more fully exploited?