Evidence of meeting #28 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.
1:15 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
So that's something that could happen after the fact. There's nothing that prevents them from doing it?
1:15 p.m.
President and Chief Executive Officer, MacDonald Dettwiler and Associates Ltd.
I don't know, but I can't imagine why they'd do it.
1:15 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Okay. There's been discussion about the guarantee of work. You're saying that the purpose of the sale is to gain more work. Then you talked about Orbital and how sales increased into Orbital. Was that before or after the whole Homeland Security crackdown in the U.S.?
1:15 p.m.
President and Chief Executive Officer, MacDonald Dettwiler and Associates Ltd.
Orbital was before.
1:15 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
It was before, so security has tightened up quite a bit since then.
There are the ITAR requirements, but there's also classified work that, as I understand it, can only be done in the U.S. by U.S. citizens. Is that correct?
1:15 p.m.
President and Chief Executive Officer, MacDonald Dettwiler and Associates Ltd.
There's a certain level of classification that can only be done in the U.S., as there is in Canada.
1:15 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
So if ATK Canada got a contract from the U.S. and part of that was classified, that classified work would need to be done in the U.S.?
1:15 p.m.
President and Chief Executive Officer, MacDonald Dettwiler and Associates Ltd.
We couldn't get a contract in Canada that had a classified piece. The classified piece would have to be stripped off first--we've done this already--and the non-classified piece can be contracted back to Canada.
1:15 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Whether by intent on your part--and I take you at your word that's not your intent--there's a concern that increasingly the technology, the work, could be sourced south of the border, because that's where the classified work will go, and that increasingly the subcontracts and the expertise will go south of the border.
Do you share any concerns in that regard?
1:15 p.m.
President and Chief Executive Officer, MacDonald Dettwiler and Associates Ltd.
First, it would have to be exported from here, so we'd have a significant amount of control.
Second, the staff who have the know-how are in Canada and want to stay in Canada. I can tell you that for a fact. We've tried to move some of them to the U.S. to grow our business and they don't want to go.
The reality is that if you look at history, our companies and other foreign-owned companies have grown in Canada because of the expertise. People are putting companies in Canada to get access to our expertise. It is a main factor.
1:15 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
What kinds of job guarantees and commitments did you get at the three locations MDA currently operates at?
1:15 p.m.
President and Chief Executive Officer, MacDonald Dettwiler and Associates Ltd.
That is between the Minister of Industry and ATK. I can't make the guarantees, but I know from talking to ATK that they're completely committed to building a space business here in Canada, and I know from buying various companies over the past few years, that's what you have to do if you want your return on investment, and they must be having discussions with the Minister of Industry.
1:15 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
In your negotiations with ATK for the sale, there was nothing in the contract you negotiated that guaranteed jobs and investment in the three facilities here in Canada.
1:15 p.m.
President and Chief Executive Officer, MacDonald Dettwiler and Associates Ltd.
We were told they would keep the work and the technology and export mandate in Canada. They would keep our management staff in Canada and they would keep our management in place. That's what we were told, and I am sure that's what they are telling the Canadian government in whatever contractual situation.
1:15 p.m.
NDP
Peggy Nash NDP Parkdale—High Park, ON
From the point of view of the skilled workforce and the absolutely top-notch, cutting-edge engineering capacity, those folks probably are concerned about their job security. Is there anything you negotiated that assures them of their job security here in Canada?
1:15 p.m.
President and Chief Executive Officer, MacDonald Dettwiler and Associates Ltd.
In our industry, in our business, we have no job security. We are six months from being out of business. We have to go and win the business. The only thing that gives us job security is access to work, and the absolute vast majority of our employees understand that gives us access to work.
1:15 p.m.
Conservative
1:15 p.m.
Liberal
Dan McTeague Liberal Pickering—Scarborough East, ON
Mr. Friedmann, thank you for being here today. I appreciate the adroitness of your answers. It is very helpful to the committee.
I'm trying to get my head around a few things. Your company will, in effect, become a subsidiary of a U.S. company. As I understand it, U.S. security laws do apply to subsidiaries of companies that are domiciled in the United States but that may operate elsewhere in the world. Is this your understanding as well, Mr. Friedmann?
1:20 p.m.
President and Chief Executive Officer, MacDonald Dettwiler and Associates Ltd.
I don't know what you mean by U.S. security laws.
1:20 p.m.
Liberal
Dan McTeague Liberal Pickering—Scarborough East, ON
The laws in the United States require that any particular company that is doing business must comply, must work with and be subject to, the security laws of the United States. Your company, in effect, would become a subsidiary of an American company. Is that correct?
1:20 p.m.
President and Chief Executive Officer, MacDonald Dettwiler and Associates Ltd.
Yes, it would be a subsidiary of an American company.
1:20 p.m.
Liberal
Dan McTeague Liberal Pickering—Scarborough East, ON
It is conceivable, sir, in the circumstance where your company is renowned for its work in satellite imaging, that we might find ourselves in an unenviable position of being in breach of an international treaty with respect to the weaponization of space. If the U.S. company is allowed to purchase your company and uses the information, the technology, that you have developed with the help of the Canadian taxpayer, is it conceivable that this could be used for future building of satellites that might be in contravention of the very conventions Canada has signed with the international community?
1:20 p.m.
President and Chief Executive Officer, MacDonald Dettwiler and Associates Ltd.
Only the Canadian government gives export permit approval for that technology. I don't see why they would.
1:20 p.m.
Liberal
Dan McTeague Liberal Pickering—Scarborough East, ON
The point would be moot after the fact. You would have a company now owned by the Americans, who could use the umbrella of their law to have reach beyond their own border, but, more important, you may be contributing to the building, or to the technology used for the building, of other types of super satellites. This is a concern that's been raised in the past about this particular technology.
1:20 p.m.
President and Chief Executive Officer, MacDonald Dettwiler and Associates Ltd.
My understanding, as president of the company, is that if I did that, it would be breaking the law. Therefore, we haven't done it and we won't do it.
