Saturday, May 10, 2008

Time to fix the Canadian space program

Globe and Mail Update

As a Canadian, and as a principal founder of MacDonald Dettwiler and Associates some 40 years ago, I have, in recent years, been appalled by the increasing difficulties of the Canadian Space Agency. It has been consistently underfunded by a long succession of federal cabinets from both major parties. It has lacked visionary leadership in recent years and has seemingly become incapable of making significant decisions due to restrictions imposed by the cabinet. The Canadian Space Program in its present state is not capable of sustaining a space capability at the top level.

The resultis that when MDA was in the final phases of the Radarsat-2 and Dextre programs, the country's major space company was faced with a dilemma: Find other customers to support its capability at the highest level of the space game, or begin to lay off one of the best space teams in the world. MDA's solution was to gain access to the U.S. space market by arranging for its space business to be owned once again by a U.S. company, as it was when the Radarsat-2 project began. Being U.S. owned is the only way Canadian space companies can access the U.S. market. So MDA made a deal to sell its space business to U.S.-based Alliant TechSystems Inc. [ATK-N]

I am not active in MDA any more and have not been since 1998, but I watched with interest as the drama unfolded. Now that Ottawa has intervened to block the transaction, I fear that the government will be responsible for creating a new Avro Arrow disaster, unless it either reverses the decision or rapidly increases funding for Canada's space program.

The root cause of the Avro Arrow debacle was lack of government support at the cabinet level for state-of-the-art jet fighters. Similarly, today we have a lack of cabinet support for, or even interest in, a sustainable, top-level space program.

In the case of the Arrow, the highly skilled engineers and scientists responsible for a monumental technical achievement scattered to the four winds. The most precious resource in any endeavour of this kind – a truly remarkable team of people – disintegrated and most of them left Canada. That was the real loss. It took our aerospace industry about four decades to recover. In contrast, as MDA crafted the sale of its space group, care was taken to hold the team together and keep it in Canada, to be able to access a bigger market and hence grow stronger while at the same time being available to execute advanced space projects for Canada if the government ever got around to such things.

If the government maintains its current stance and fails to take rapid action to fix the National Space Program, the situation will become analogous to the Avro Arrow debacle. MDA will be forced to scale back its Canadian work force and rebuild in the U.S. and possibly elsewhere. The company has spent more than 35 years assembling one of the best radar satellite and space robotics teams the world has ever seen. Currently, the team has 1,900 members, of which some 1,500 are employed in Canada and the remainder mostly in the U.S. Not long from now, unless Canada fixes its broken space program and does it quickly, or allows the sale to go ahead, I believe that ratio is likely to be geographically reversed. Ottawa will have left MDA with no other strategic option.

In rejecting the sale to Alliant, Industry Minister Jim Prentice cited concerns about sovereignty and guarding our coasts, about being a space-faring nation and having control over our space assets. He said he wants Canada to own the technology and intellectual property that comes with space projects. But technology has a limited shelf life, and resides mostly in the minds of the people who created it. Unless they have the opportunity to practice and advance this technology, those people move on and the expertise and therefore national capacity in space slips away like sand through an hourglass.

At this time, Canada possesses industrial space technology and expertise at the highest level. If the minister is serious about what he says, he must take immediate measures to strengthen the Canadian Space Program and make it sustainable. To maintain the leadership we have achieved, Ottawa must increase the Canadian Space Agency budget immediately by a factor of at least two and further increase it as we go forward.

I don't know if taxpayers are prepared for that. But there is no getting around the fact that cutting-edge space technology is expensive. The only alternative to spending more is to allow MDA to strike a practical partnership with a U.S. company so the burden of the cost to maintain and advance our Canadian capabilities is shared by bringing in U.S. work. If Mr. Prentice and the Harper government do not want to go down in history as the authors of the second Avro Arrow disaster, they have much work to do, and little time to do it.

John S. MacDonald, O.C., is currently chairman and chief executive officer of Day4 Energy Inc. of Vancouver, a manufacturer of solar electric modules. He is also an MDA shareholder.

No comments: