Industry Committee on April 1st, 2008

[Daniel Friedmann]

It's the largest.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

That's of interest to me too, because obviously there's some real concern about whether we are doing the right thing morally, and I trust that.

This is a publicly traded company, so there must have been a shareholders meeting when this sale was proposed. What was the response of your shareholders?

[Daniel Friedmann]

The shareholders meeting these days is quite a small affair, because everything happens earlier electronically. But we received hundreds and hundreds of calls from shareholders--teachers and government employees across the whole country. This is a widely held Canadian company.

I didn't want to rub it in with the news, but we got 99.95% approval. There isn't a dictator in the world that gets that.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Did they have any of these concerns that we're talking about? These are legitimate questions we're asking about sovereignty and Canadian technology that's being sold. Were those issues raised?

[Daniel Friedmann]

Our shareholders are very patriotic. In fact, the teachers' federation was part of the group that brought the company back into Canada. They wanted to know if we were doing this to maintain the company in Canada and make it thrive. I can absolutely tell you, because I'm the guy who made the recommendation, that that's what we're doing. I made the recommendation and wiped out my job the same day.

That's why we're doing this. That's what we've told our shareholders. After they heard that, and many of them called, an unbelievable percentage voted in favour.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Okay, thank you.

Those are all the questions I have. I'm going to turn my time over to Mr. Hanger.

[Art Hanger, Conservative, Calgary Northeast, AB]

Thank you, Mr. Chairman.

Is the sale contingent on ATK purchasing or acquiring RADARSAT-2?

[Daniel Friedmann]

The sale is contingent on ATK obeying all the government rules on control and operation of the satellite.

[Art Hanger, Conservative, Calgary Northeast, AB]

I know, but that's not what I asked. Is the sale contingent on them acquiring that asset--RADARSAT-2?

[Daniel Friedmann]

You would have to ask them about that. My understanding is that technically it's not an issue. The issue is whether we have access to sell the data for the money we've invested. The government controls the satellite. You can't do anything with the satellite up there. It's controlled from the ground.

[Art Hanger, Conservative, Calgary Northeast, AB]

I know there's a lot involved. It's not just an asset per se. The intellectual property, technology, and the like are on the table, are they not?

[Daniel Friedmann]

The intellectual property to build RADARSAT-2 that was funded by MDA has been sold to ATK, yes.

[Art Hanger, Conservative, Calgary Northeast, AB]

Given the fact that CSA really hasn't committed to further steps, from what I can tell, on the feasibility of proceeding with the constellation program--they've taken that step, but that's about as far as it's gone--could the technology that went into this satellite be duplicated in the next constellation project that may result in a similar satellite being developed by Canada?

[Daniel Friedmann]

We have bid two options on the RADARSAT constellation. One option is based on RADARSAT-2. One option is based on a new technology we've developed in the last few years. RADARSAT-2 is 10 years old. Both of those proposals are honoured by ATK, and in fact they're hoping very much, as we are, that one of them will be approved soon and we'll be on the work.

[Art Hanger, Conservative, Calgary Northeast, AB]

So in other words, ATK would get the contract? This is not something that would have to be so-called let out again?

[Daniel Friedmann]

I hope not, no. They should get the contract.

[Art Hanger, Conservative, Calgary Northeast, AB]

You're not sure?

[Daniel Friedmann]

All of our existing contracts will be made over to the new owner. If it's in the process of being bid, it will be up to the government to decide whether to move it over or not to move it over. It would be a government decision, but ATK is willing to honour that proposal, as it's willing to honour every proposal we have in front of the government right now.

[Art Hanger, Conservative, Calgary Northeast, AB]

Also included in this agreement, I understand, is the unmanned aircraft operation. There's a UAV operation out of Suffield.

[Daniel Friedmann]

Yes, our defence group is also part of the sale, and it is bidding on unmanned vehicle jobs for the Canadian government. It hasn't won any, but it's bidding on them.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Hanger.

We will go now to Ms. Nash.

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

Thank you.

Mr. Friedmann, you described the incredible shareholder support for the deal, and it is a very lucrative deal for the shareholders, but I'm wondering if this was addressed in the agreement. Is it possible that after the sale the Government of Canada could transfer the RADARSAT licence to ATK?

[Daniel Friedmann]

Only if the government wanted to do so.

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

Nothing would prevent the government from doing that in this sale?

[Daniel Friedmann]

The government owns the licence, so it can license anybody today.