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.
Conservative
Bruce Stanton Conservative Simcoe North, ON
At the time this transaction was done, MDA was a majority U.S.-owned company.
Conservative
Director, Earth Observation Projects, Canadian Space Agency
When the contract was signed with MDA, in those days the value of the contract was in the order of below $200 million.
Director, Earth Observation Projects, Canadian Space Agency
The value now of the contract with MDA is in the order of $394 million.
Conservative
Director, Earth Observation Projects, Canadian Space Agency
This can be explained in two broad categories. You may remember that in the 1998-99 timeframe, the question of ITAR became an important issue. This created problems for us on the RADARSAT-2 program. We had to change the structure of the team building the spacecraft. We used to have a U.S. supplier for part of the spacecraft, and we had to terminate that contract and go to a European supplier.
That's one part of the arrangement. We also had to arrange for a launch of RADARSAT-2.
Those things were made public in 1999.
Conservative
Bruce Stanton Conservative Simcoe North, ON
I appreciate that. And I don't want to be seen as rushing you in your answers, but we are under confined timelines here.
Do you recall who in 1988 was the minister responsible for the Canadian Space Agency?
Director, Earth Observation Projects, Canadian Space Agency
It was the Honourable Mr. Manley.
Conservative
Bruce Stanton Conservative Simcoe North, ON
So it was under Mr. Manley at the time. And Mr. Garneau was the president of the agency at that time?
Director, Earth Observation Projects, Canadian Space Agency
The president in those days was Mr. Mac Evans.
Conservative
Bruce Stanton Conservative Simcoe North, ON
Thank you.
There's one other related issue here. This actually goes back to the ownership issue. Here we have a company that's been...and I hear this from my own constituents, I must say. People are concerned that this is a piece of Canadian hardware, Canadian scientific work, that we've invested in at a public level. It's a tremendous piece of equipment by all standards, and yet we don't own it. It would appear, from the time this public-private partnership was entered into, that we haven't owned it, and yet the perception exists. People have likened it to the Avro Arrow, for example. It seems that this is a different kind of situation altogether.
Going back to RADARSAT-1, though, we did have more control of that. You answered a question earlier about why the change was there. But was RADARSAT-1 ever used by the U.S. Department of Defence or the Pentagon for any type of imaging or remote-sensing system work for the Pentagon--for example, for some of the various exercises the U.S. was involved in throughout different parts of the world?
Director, Earth Observation Projects, Canadian Space Agency
RADARSAT-1 was a joint program between Canada and the U.S. The basic arrangement was that Canada was building the spacecraft and the associated ground segment, and the U.S. government, through NASA, was providing the launch vehicle, the launcher. In return, they were granted access to some of the imagery from RADARSAT-1.
So throughout the life of RADARSAT-1, the U.S. government, primarily NASA and NOAA, used RADARSAT-1 for scientific and operational needs. NOAA and the National Ice Center in the U.S. also have a need to monitor the ice conditions around Alaska. In fact, we do have a joint operations centre between Canada and the U.S. to monitor the ice conditions around North America.
So the RADARSAT-1 program was conceived as a joint Canada-U.S. program whereby we do share data occasionally.
Conservative
Conservative
Bruce Stanton Conservative Simcoe North, ON
Yes, this will be brief.
What would you say to Canadians who are concerned about the ownership issue?
Director, Earth Observation Projects, Canadian Space Agency
At my level, I don't think I can really express a policy view on this. I think everything surrounding the transaction is still under review. Until we know where we're going, it's hard to say what will be the consequences of all of that.
Bloc
Robert Vincent Bloc Shefford, QC
Thank you, Mr. Chairman.
As I understand it, the government has invested $435 million in RADARSAT-2. You also spoke of a further $394 million, which gives us a total of $829 million.
After this sale is concluded—if it comes to fruition—will the contracts that you sign with other agencies and companies in the future include provisions allowing you to retain ownership of the intellectual property? If I am not mistaken, we have just ceded all of our intellectual property and given them millions of dollars. What are we getting in return?
You spoke about $435 million worth of services, images and so forth. But who will have priority access? When we ask ATK for something, will we find that we have dropped to second, third or fourth in line? We may well be told to wait our turn.
I want to know how much time it will take to use up our $435 million worth of credit. Will the satellite become obsolete before we have had time to use up all of our credit?
President, Canadian Space Agency
Firstly, the amount in question is not $435 million, but $445 million, although not any more than that—I would not want to exaggerate. We have $445 million in credit. It stems from a service contract that we signed with MDA when the federal government contributed, through the Canadian Space Agency, to the development of RADARSAT-2, a privately owned satellite.
With regard to access to data, as you said earlier, the government will receive this service throughout the lifetime of the satellite. Bear in mind that RADARSAT-1, for example, had an estimated life cycle of five years, but is still working. We therefore do not foresee any problem in using up the $445 million credit in the lifetime of this satellite.
With regard to priority access, our framework agreement with MDA contains guarantees to ensure that we will not drop to third or fourth place in the order of precedence for accessing RADARSAT-2 satellite data.
Bloc
Robert Vincent Bloc Shefford, QC
Have you met with people from MDA recently? This $445 million contract seems to have appeared from nowhere. This committee and the Canadian public are very interested in how much money has been spent on this satellite—did you dream up the $445 million service contract today as a means of appeasing people, to stop them asking questions?
I would also like to know whether future contracts will include provisions to ensure that the intellectual property remains in Canadian ownership. Regardless of who buys the product, will the intellectual property remain in Canadian hands? Is it not true that we invest money and we then [Editor's note: inaudible].
President, Canadian Space Agency
Firstly, Mr. Vincent, allow me to assure you that the $445 million has not just appeared out of nowhere. It dates back to the original contract and the amendments to that contract. It goes back to the late 1990s and the years that followed.
Bloc
Robert Vincent Bloc Shefford, QC
Does the $445 million include the $100 million for the satellite that was the launched by the Russians, or was that over and above the $445 million?
Director, Earth Observation Projects, Canadian Space Agency
No, it includes it.
