Industry Committee on April 1st, 2008

[Guy Bujold]

And I'm responding to you that I don't believe the Canadian Space Agency is failing. Indeed, if you look at the investments that have been made and announced by the federal government—for instance, they're moving beyond RADARSAT-2 to the next constellation of earth observation satellites—that's a demonstration of the government's commitment to—

[Peggy Nash, NDP, Parkdale—High Park, ON]

But the money has not flowed for the constellation investment.

[The Chair, Conservative, James Rajotte]

Okay, Ms. Nash, let Mr. Bujold answer the question.

[Guy Bujold]

Our responsibility as a Canadian agency is to deliver on those projects that the government decides are the ones that will make sense both from an economic perspective and from a number of other policy perspectives.

The decision by the government to go beyond RADARSAT-2 to the next generation of satellites is, in my view, a forward-looking decision that will mean a significant investment beyond the base budget of the Canadian Space Agency to space activities.

Similarly, the announcement by—

[Peggy Nash, NDP, Parkdale—High Park, ON]

Why isn't the money flowing, then, to back up those commitments?

[Guy Bujold]

As I'm sure members of the committee will understand, any of these projects are significant in their nature, are long term, and go through various phases. We are exactly, in our minds, where we thought we should be with regard to the constellation. We have done phase zero, which is identifying the concepts. We are doing work that we've gone to the market for to give us the necessary information to allow us to determine what are the technical parameters around which constellation the next constellation of earth observation satellites should be built.

Once we have that information.... Let me correct myself, because we've now obtained the proposal back from the industry. Once we've completed our due diligence on that, we will be in a position to go back to the government and ask the government how it wishes to proceed.

[Peggy Nash, NDP, Parkdale—High Park, ON]

[Inaudible--Editor]

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Nash. I'm afraid your time is up. I apologize.

We will go now to Mr. McTeague, please.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Thank you, Chair.

I have a couple of questions, in very short order.

If the sale is in fact allowed to proceed, what percentage of business will your industry lose as a result of the preponderance of MacDonald Dettwiler with respect to initiatives on dealing with the space agency? Do you see a percentage drop in the amount of critical mass of activity by that company to the United States? That is my first question.

My second question deals with the more interesting part of licensing. I was the parliamentary secretary responsible at the time—and I recall we spoke at some point—with respect to the guarantees that were given to the Canadian government on imaging, etc. Do you foresee a scenario whereby the sale of this company to a U.S. company would in fact put it in a position where it might be subjected to, I don't know, a new version of the Patriot Act? The U.S. company may find itself being told that it has to use the discretion of imaging, subject to and only pursuant to the U.S. government's mandate or dictates. What implications does it have for things like our sovereignty in the north and the melting of the ice cap?

I'm wondering if you're comfortable with the possibility that the licence, notwithstanding the guarantees that were given, could be altered, and altered to benefit the American priorities, international and otherwise.

[Guy Bujold]

Thank you for both of those questions.

With regard to the first, the impact of the sale in terms of the business of the Canadian Space Agency again will depend on the nature of the entity that's put in place by MDA at the time. The Canadian Space Agency will have need, essentially, to partner with industry in order to deliver on the mandate we have. The more robust that market is, the better it is for Canadians at the end of the day because we can get more benefit.

With regard to the second, I'm afraid that question as to the licensing of the satellite itself is one that should be addressed to DFAIT.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Mr. Bujold, at the time the act passed in 2005 there was great skepticism about the possibility that this particular new technology could be used for other things. One recalls the argument about ballistic missile defence, that somehow this would help the U.S. do some tracking in terms of its own ability to intercept missiles. Of course, that was set aside.

What does this say about guarantees that Parliament gives in writing to Canadians, when it passes legislation, only to have that particular guarantee potentially put in a position of some jeopardy if in fact we sell this technology to another country whose interests are somewhat different and to a company whose interests are vastly different from the ones we proposed? Does this do anything as far as the--I want to be respectful--credibility of the Space Agency if we're now giving our new technology, or lending it or selling it, to countries that have, obviously, a more pronounced military interest?

[Guy Bujold]

I apologize to the committee, but this is a question that the president of the Canadian Space Agency is not in a position to answer for you. These are questions of the licensing of the satellite and what the implications are. It's highly speculative in terms of determining how the deal will end up, if and when the deal goes forward.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

How much time do I have, Chair? Please give my time to Mr. Brison, if you don't mind.

Thank you.

[The Chair, Conservative, James Rajotte]

You have two minutes.

Mr. Brison.

[Scott Brison, Liberal, Kings—Hants, NS]

Following on that question, sir, if this technology, financed by Canadian taxpayers through your agency, built with Canadian expertise through your agency and MDA, is ultimately used by another country, perhaps the U.S., against Canadian interests--for instance, in a dispute over the Northwest Passage--does that not damage the credibility of your agency and the reputation of Canada's whole space industry?

[Guy Bujold]

First of all, the technology, as I mentioned earlier, along with the satellite itself is already the property of MDA. The issue at hand is a transaction that needs a series of approvals from various bodies.

[Scott Brison, Liberal, Kings—Hants, NS]

Sir, under the Investment Canada Act, wherein the Minister of Industry has the authority to determine whether it's in Canada's national interest that this transaction proceed, as parliamentarians we're trying to garner the information so that we can make a recommendation to him on this transaction. You're here in part as an expert witness to provide us with guidance on that, and we do need some answers.

In your opinion, would it not be contrary to Canada's national interests that we lose control over RADARSAT-2 and its images, and would it be in the interests of our space industry if we were to lose MDA--

[The Chair, Conservative, James Rajotte]

Mr. Brison, your time is up.

Mr. Bujold, just answer that briefly.

[Guy Bujold]

Again, the technology is the property of MDA. And with regard to the outcome, the transaction at the end of the day, whether or not there's an effect on the credibility of the Canadian Space Agency I would submit to you depends on how we, at the Canadian agency, continue to do our job of ensuring that Canadians get the benefits that we've contracted with MDA to receive.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Mr. Brison. We'll go to Mr. Stanton, please.

[Bruce Stanton, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

Mr. Bujold, at the time of the transaction in 1998--I'm going to dwell primarily on that area of interest--was MacDonald Dettwiler all Canadian owned? Was it an exclusively Canadian company?

[Guy Bujold]

No, but I will ask Mr. Brûlé to give you some more detail on that.

[Luc Brûlé]

At the time of the transaction, when the contract was signed in December 1998, part of MDA was owned by Orbital Sciences Corporation in the U.S.

[Bruce Stanton, Conservative, Simcoe North, ON]

How much of MDA was owned by U.S. companies?

[Luc Brûlé]

I forget the amount. I wouldn't be able to answer that. Our colleagues from MDA would know.

Oh, I just got the answer. It was 67%.