Government Can Stop Sale of Canadian Companies on Grounds of National Security

[Edward Campbell]

I know it's usually bad form to disagree with the smart kids in the class, but sorry Edward.

I gotta' disagree.

As a small technology business owner I have had a front row seat to the "musical chairs" of foreign  buyouts.  I've seen many of my colleagues and friends suddenly find themselves unemployed when the technology enterprize (many supported with public money) they work for gets acquired and run into the ground or simply disbanded. As this history has repeated itself over and over in the past 25 years, I have a very hard time believing in a happy outcome if MDA were sold.

We've had a large number of these repeats of history in Edmonton.
And it has NEVER benefited Edmonton or my business.

I'm not Anti-American in the least.  I just don't like how corporations handle technology assets.

With respect, I cannot see how blocking this sale benefits MDA's shareholders. As far as I know - and I may well be very wrong - MDA doesn't have any irreplaceable technology that the US must have. It needs the US market more than the US needs MDA. In that situation, if MDA's access to the US market is limited, as MDA's CEO suggested it will be, then 80% of its potential market is gone. That cannot be good for business. Life would be better for MDA's shareholders if there was a Canadian space science/technology programme that would provide a steady stream of contracts, but there isn't.

 

[Fishbone Jones]

Maybe I'm missing something, or don't truly understand what's going on here.

If the US truly wants and needs this high flying spy cam, why don't they just buy one from the company.

If they don't want to do that, my other thought is that they were going to buy the firm, close the company and shelve the techology, to protect their own interests.

Am I being too simplistic? Or do I need to wrap the tinfoil tighter.

My other bother is, that after all the caterwalling from the left about the sale. The CPC agrees, stops it and then the liberal mouthpiece Mop & Pail complains about the CPC doing exactly what the outspoken nationalists wanted. Damned if you do, damned if you don't.

 

[Bane]

      I think the rub here, as was already mentioned by some, is that if RADARSAT 2 is so important to Canada's security why was it built and owned by a private company.  This is what happens to private sector assets; they get bought and sold.  This should have been from the outset a wholly government owned piece of hardware with options for the Fed's to sell image data to the private sector, not the other way around.  This, of course, is all clear with the magic of hindsight.  I believe, as it was mentioned in several news articles, that MDA has one month respond on the ruling and offer counter arguments/proposals, it is possible that RADARSAT will be taken off the table while the rest of the deal proceeds as was intended. 

My other bother is, that after all the caterwalling from the left about the sale. The CPC agrees, stops it and then the liberal mouthpiece Mop & Pail complains about the CPC doing exactly what the outspoken nationalists wanted. Damned if you do, damned if you don't.

I don't think this is simple a lefty-righty issue and to characterize it as such is not really useful in any way.  The government shot itself in the foot a bit in on this one; they have allowed many top tier Canadian firms to be scooped up by international buyers without so much as a peep (fine, they are private firms).  All of a sudden they turn protectionist for a relatively minor (money wise) deal.  With all do respect to them they were put in a very tricky situation and it was unlikely that this was going to turn out with everyone hugging.

      As to why they wanted to buy the space ops part of MDA.  My guess is that they wanted the capacity to build R2 like satillites or some of the specific technologies that went into it, not just the ownership/capacity of one SAT.  With that, a simple purchase of MDA would be seen as easier and cheaper than a greenfield investment, you also swallow a potential competitor at the same time.  I'd imagine Alliant's thinking is the same logic that drives most M&A, and not tinfoil hatty. 

 

[Edward Campbell]

...
If the US truly wants and needs this high flying spy cam, why don't they just buy one from the company.

If they don't want to do that, my other thought is that they were going to buy the firm, close the company and shelve the techology, to protect their own interests.

Am I being too simplistic? Or do I need to wrap the tinfoil tighter.
...

According to ATK and MDA, or at least what I think I heard (read) ATK and MDA say, ATK wants to become a bigger player in the US space field and the fastest, easiest way to do that is to buy MDA - which already is a player. MDA has some technology (patents) that ATK needs; simple as that. My guess is that ATK would, fairly quickly, 'hollow out' MDA.

 

[Teddy Ruxpin]

I believe, but could well be wrong, that one of the issues was potential loss of the data to be provided by RADARSAT should it be taken over by a US company.  Given American institutional xenophobia about things security-related, this was a real danger, IMHO.  I've seen enough "no foreign" US caveats in my time to know how it works.

MDA is also a defence contractor and let us not forget that.  If the shoe were on the other foot, do you think that the US government would permit the purchase of a major American defence contractor by a Canadian company, particularly if that contractor provided sensitive security data?  I don't think so, and it makes the accusations of "unfair" stemming from Minnesota politicians seem rather hollow and contradictory.

 

[Flip]

With respect, I cannot see how blocking this sale benefits MDA's shareholders. As far as I know - and I may well be very wrong - MDA doesn't have any irreplaceable technology that the US must have.

I think the rub is, Shareholders are not the only stakeholders.  In a free and fair marketplace foreign ownership is fairly benign - but the field has always been tilted and without a "Canada first" attitude we can disadvantage ourselves unnecessarily when dealing with "America first" or "China first" trading partners.

I suspect that the point of the acquisition is more about eliminating a competitor than how unique the technology is.  We see this in oil related technology circles all the time.  A small start up shows great promise and is bought out, only to have the R&D department be closed or relocated to Houston or somewhere.  Purchasing market share or reducing technical uncertainty are part of the strategy too.

To assume that the market will take care of our interests if we just leave it to it's own devices is a little naive in my opinion and I think we have placed a little too much expectation in the goodwill of others.

In that situation, if MDA's access to the US market is limited, as MDA's CEO suggested it will be, then 80% of its potential market is gone.

MDA hasn't always been a defence contractor - And I think this comment highlights the split between how business people and technology people see the world.  To me, MDAs value is not limited too the stock value of it's existing business in it's current markets. To me, MDA's value can be related to what that body of people can accomplish in current and future markets.

To put it another way, In my own business the revenue is small and earnings have been growing but slowly.  If I had a venture-cap partner (who would naturally demand control) he would likely determine the sale of my building would provide him a tidy return and I could go flip burgers.
Or he could wait..........My interests are best served by staying in business.  I doubt he would see the point of  taking the longer view.

Just my civvie perspective. $.02

 

[Edward Campbell]

I think Teddy Ruxpin's point is the key one, but: see this technical note on the ground segment which shows that the key TT&C (tracking, telemetry and control) and satellite stations are all in Canada (Richmond, Prince Albert, Saskatoon, Gatineau and St. Hubert). It is pretty hard for the US to control the data when it is being downloaded into Canadian sites.

MDA’s responsibilities are towards its shareholders. If the Government of Canada wants to be one all it needs to do is buy in.

If MDA is to survive as a space company (it’s not really much of a defence contractor, in my opinion) then it needs access to space markets. If it cannot access the US market then it must find enough work to survive and prosper in the rest of the world. There isn’t much purely Canadian work right now. But: I believe Canada needs a space based, non-geostationary orbit based, surveillance, warning and control system – which will need to be renewed every seven to ten years – that’s enough work to keep a company bigger and better more capable than MDA busy enough to make good profits for a long, long time.

 

[retiredgrunt45]

Posted with the usual disclaimers.

All I have to say is, "It's about time someone stood up and said NO" to the selling of all our technology to foreign buyers!

http://news.sympatico.msn.ctv.ca/TopStories/ContentPosting.aspx?feedname=CTV-TOPSTORIES_V2&showbyline=True&newsitemid=CTVNews%2f20080410%2fradarsat_prentice_080411

[quote]Industry Minister Jim Prentice said Friday that decisions about foreign takeovers will now be viewed with the goal of ensuring that Canada retains sovereign control of its technological toolbox.

Speaking in St. Hubert, Que. at the Canadian Space Agency, Prentice offered his clearest statement so far on how business will be done.

"We need to own our technology and the intellectual property that comes with it,'' the prepared text of his speech reads.

"If we do not do this, we will not reap the benefits of our work and our investments; we will not build for the future in a way that keeps us at the forefront of innovation in a knowledge economy."

The speech came one day after Prentice rejected a deal that would have seen Canada's largest space technology firm sold to an American arms maker, saying the proposed deal wouldn't provide net benefits to Canada.

Prentice has sent a formal rejection letter to Alliant Techsystems Inc. (ATK), a U.S. company that has been trying to purchase a division of MacDonald, Dettwiler and Associates, the Canadian firm responsible for the Radarsat 2 satellite, Canadarm, and the space robot Dextre.

Prentice told ATK the sale will not be allowed unless the company can offer new and compelling information.

Officially, ATK has 30 days to come up with the evidence. But Prentice's speech on Friday made it sound like the decision was final.

Prentice undertook efforts this week to tighten the regulations around foreign takeovers. And he said he would apply a "national security test" that would ensure companies with foreign ownership would be required to operate under the same standards as those that are domestically owned.

A foreign competition panel has also been established under Lynton Wilson, former head of BCE Inc. The panel has a tight timeline, commissioned to report on the issue of foreign takeovers by June 30.

The government seems determined to put a stop to the trend that has seen once-proud Canadian companies bought out by U.S. investors, such as Inco, Falconbridge and Hudson's Bay Co.

But some who are directly affected by Prentice's decision to block the sale felt his speech Friday was short on good news for workers whose jobs may have depended on the deal.

Robert Quintal, CAW local president for MDA, told CTV's Mike Duffy Live he wanted to hear the government commit to ensuring MDA remains competitive.

"We were hoping to hear there would be a reasonable amount of money spent from the Canadian government into providing business for MDA and work -- new developments, new projects. And some sort of guarantee that the amount of money the Canadian government spends on space in general is adequate to keep the employees employed, basically," Quintal said.

Janine Symanzuik, of the employees' association at MDA's Brampton, Ont. facility, agreed Canada's space industry requires an investment to remain competitive and sustainable.

"The U.S. is 81 per cent of the world's space budget and we believe that to have access to those opportunities we need this sale to go through," she told Mike Duffy Live.

On Friday, Prentice extolled the strength of Canada's space industry, especially the value of Radarsat-2 -- the satellite owned by MDA. Prentice said it will help protect Canada's claim over the Arctic.

If the U.S. deal were to go through, critics have warned, Canada could lose control and access to that technology, which Prentice said produces clearer, faster images and can "survey an area more precisely, which makes it a superior tool for tracking ships navigating our waterways."

Even opposition critics have applauded the unprecedented decision.

"When the Canadian taxpayer puts $445 million into a satellite that launches on Dec. 14 and the company seals the agreement to sell it to the Americans on the next business day, that's an extraordinary case,'' Liberal industry critic Scott Brison told The Canadian Press.

"As well, the satellite was developed to protect Canadian sovereignty (in the North) that the Americans don't recognize, so to sell it to the Americans would be perverse."

But not everyone agrees. Jim Ramstad, a Minnesota congressman representing the area where ATK is based, told The Globe and Mail he was troubled by the move.

"I find the blocking of the MDA takeover by the Canadian government outrageous. It's a slap in the face from one of our closest allies," Ramstad told The Globe.
Paul Cellucci, former U.S. ambassador to Canada, told Mike Duffy Live he feels it's premature to cancel the deal. Cellucci said he's confident a compromise could be reached that would benefit all the parties involved.

[/quote]

 

[CougarKing]

Duplicate thread, since subject already covered below:

http://forums.army.ca/forums/threads/71783.0.html

Mods, please merge.

 

[SeaKingTacco]

So- now that the Gov't has created a stranded Canadian market for the space industry, a multi-billion dollar spending package on space technology bought from MDA and a few other Canadian companies should be forthcoming any day now to keep them in business, right?

Right?

 

[Edward Campbell]

So- now that the Gov't has created a stranded Canadian market for the space industry, a multi-billion dollar spending package on space technology bought from MDA and a few other Canadian companies should be forthcoming any day now to keep them in business, right?

Right?

That’s it; exactly right!

But see this, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from today’s National Post:

http://www.nationalpost.com/news/canada/story.html?id=440245

Support, but no cash for space
Prentice On MDA

Jan Ravensberge, Canwest News Service  Published: Saturday, April 12, 2008

LONGUEUIL, QUE. - Industry

Minister Jim Prentice drove what appears to be the last spike through the heart of a controversial $1.3-billion takeover bid by which a U.S. firm would have acquired sophisticated Canadian surveillance-satellite technology.

Under the deal, Alliant Techsystems Inc. would have been permitted to acquire surveillance-satellite and other space technology from MacDonald Dettwiler and Associates Ltd. of Richmond, B.C., the company behind the iconic Canadarm.

"We need to own our technology and the intellectual property that comes with it," Mr. Prentice said in a speech at the headquarters of the Canadian Space Agency, which is on the south shore of Montreal.

"The government," Mr. Prentice pledged yesterday, "will continue to foster a vibrant, high-tech space industry right here in Canada."

However, he later responded to reporters trying to pin him down on specifics: "I'm not going to announce anything today for MacDonald Dettwiler or other companies" in the cash-hungry space business.

During his speech, Mr. Prentice went further in explaining Ottawa's decision on Thursday to veto the sale. "We will not accept a loss of jurisdictional control to another party or another country," he said.

However, he would not say the MacDonald Dettwiler deal is dead. Discussions will continue between his department and Alliant while the clock ticks down on the 30-day waiting period triggered with Mr. Prentice's letter declaring the deal has no net benefit to Canada.

All aid short of help will be forthcoming, it appears.

 

[SeaKingTacco]

Yes.  Far better to slowly kill MDA than let those stinky Americans own it...  :

 

[Kyu]

From today's Userfriendly comic :

 

[Edward Campbell]

Even a broken clock is “right” twice a day so, now and again, even Prof. Michael Byers must be “right.” Here, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from today’s Globe and Mail is an example of that phenomenon:

http://www.theglobeandmail.com/servlet/story/RTGAM.20080423.wcomda23/BNStory/specialComment/home

Commentary
Space fallout: We need an explicit security test
In the post-9/11 world, foreign investors want our rules to be clear

MICHAEL BYERS

From Wednesday's Globe and Mail
April 23, 2008 at 8:04 AM EDT

The Canadian government was right to block the sale of MacDonald Dettwiler's space division to Alliant Techsystems of Minnesota. But the way the deed was done has created the need for some additional, urgent work by federal Industry Minister Jim Prentice.

Instead of having Mr. Prentice use the Investment Canada Act, the blocking of the MDA sale should have been left to Foreign Affairs Minister Maxime Bernier.

Under the 2005 Remote Sensing Space Systems Act, a foreign affairs minister may deny any transfer of a satellite licence that imperils the "national security or defence of Canada" - as the sale of MDA's Radarsat-2 would have done. Since the remote-sensing legislation is very specific, using it to block the sale would have avoided any collateral consequences for other foreign investment.

The Investment Canada Act, in contrast, has very wide application. It sets out a "net benefit" test and directs the industry minister to consider a number of economic factors, but makes no mention of national security. As a result, Mr. Prentice had to read national security into the legislation as an implicit consideration.

This exercise of ministerial discretion has created uncertainty for foreign investors, and not just in the space industry. Which Canadian assets and companies are protected by the new, unwritten national security test? Are shipyards that build navy and coast guard vessels off limits? What about the companies that train pilots for the Canadian Forces? What about ports and railways, and the companies that operate them?

An implicit national security test creates unacceptable political risk for potential investors. But now that the test exists, Mr. Prentice would only sow more confusion if he reversed the MDA decision and handed the matter to Mr. Bernier.

The solution is to recognize that free trade and foreign investment are compatible with an explicit national security test. In our post-9/11 world, foreign investors are accustomed to the fact that security sometimes trumps trade. What they want - quite reasonably - is for governments to spell out the balance as clearly as possible.

Other countries do so already. The United States has an explicit national security test that includes the protection of critical infrastructure in the energy, communications and transportation domains. Britain, France, Germany and Japan all have explicit national security tests. So, too, does China - one of the largest recipients of foreign investment and a full-fledged member of the World Trade Organization.

Most trade agreements include explicit national security exceptions. Both the WTO and NAFTA allow a country to deny "access to any information the disclosure of which it determines to be contrary to its essential security interests" - a provision that covers at least some of the imagery produced by Radarsat-2 and perhaps even the technology behind it.

Mr. Prentice, who clearly understands his portfolio, has been preparing for an explicit national security test since becoming Industry Minister last summer. In December, he introduced guidelines on how the "net benefit" test would be applied to foreign state-owned enterprises such as national oil companies or sovereign wealth funds. This move was prompted by concerns that Chinese state-owned oil companies might buy into the Alberta tar sands.

The proposed sale of MDA was not covered by these guidelines, because Alliant is not a foreign state-owned enterprise. It is a foreign private enterprise that conducts most of its business with a foreign government. Among other things, the MDA saga shows that the difference between public and private is not always clear cut.

To his credit, Mr. Prentice was already moving on this front, too. In November, he said the cabinet would "be examining the necessity for an explicit national security test for foreign investment. In doing so, we will examine what other G8 countries have done."

But the examination was made contingent on the conclusions of the Competition Policy Review Panel, a group of industry insiders convened by the government last July and expected to issue recommendations this summer.

The uncertainty caused by the MDA precedent needs to be addressed sooner than that. Mr. Prentice should put amendments to the Investment Canada Act before Parliament this spring. The recommendations of the Competition Policy Board can be dealt with when the bill is in committee.

The amendments should include an explicit national security test, clear guidelines, and an independent body to review foreign takeovers expeditiously and provide reasoned recommendations. Such a review mechanism would reduce uncertainty and help guard against the politicization of rulings on proposed sales.

Big decisions often necessitate further decision-making. In Mr. Prentice's case, blocking the sale of MDA has created an urgent imperative. It's time to modernize the Investment Canada Act.

Michael Byers, Canada Research Chair in Global Politics and International Law at the University of British Columbia, testified before three parliamentary committees on the proposed sale of MDA.

Prof. Byers has missed one key issue: trade, including trade policy and “tests” does not belong in the Foreign Affairs domain. We need to return Trade and Commerce to the Industry domain – as it was, explicitly from 1969 until 1983. It was, maybe still is fashionable to play let’s pretend ‘realpolitik’ and assume that we are a cheerfully  mercantilist state – that’s not true. We are a laissez faire economy in a confused world – an unhealthy mix of old fashioned mercantilists, protectionists and laissez faire free traders.

But, he is right in saying that we can and must establish clear, defensible ‘tests’ of the national good in trade and investment matters. Even laissez faire free traders are entitled to protect themselves but they need to do so in an open and honest manner.

Being a lawyer, Prof. Byers cannot resist going a step to far. We do not need  “an independent body to review foreign takeovers expeditiously and provide reasoned recommendations.” We already have too many of them. The Minister of Industry Trade and Commerce could rule, advised by his own, expert civil servants, and explain his rulings clearly.

 

[MarkOttawa]

E.R. Campbell: Quite.  I almost fell off my chair after reading a piece by the good professor that did not leave me seething.  But I don't see that ever happening with his evil twin, Steve Staples.
http://toyoufromfailinghands.blogspot.com/2007/12/prof-byers-self-psychotherapy.html
http://toyoufromfailinghands.blogspot.com/2008/02/conference-of-defence-associations-vs.html
http://www.rideauinstitute.ca/site/c.doIELOOuGnF/b.3348215/

Mark
Ottawa

 

[Edward Campbell]

Here, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from today’s National Post, is MDA’s response:

http://www.financialpost.com/story.html?id=483007

MDA sale ban would cost Canada jobs

Nathan VanderKlippe, Financial Post

Published: Wednesday, April 30, 2008

VANCOUVER -- MacDonald Dettwiler and Associates Ltd. will be forced to hire hundreds of new U.S. workers, with a corresponding "erosion" in Canadian jobs, or risk having its technology stolen by U.S. companies if the sale of its space division to a U.S. munitions maker falls through, a senior executive with the Richmond, B.C.-based company said Wednesday.

For weeks, MDA has maintained a stony silence in the face of Canadian opposition to the $1.33-billion sale to Minnesota-based Alliant Techsystems Inc. The deal has provoked strident criticism among those who see it as a give-away of critical Canadian technology.

It also provoked a landmark decision from Industry Minister Jim Prentice, who ruled that it provided no "net benefit" to Canada, and as such could not proceed. Under the Investment Canada Act, Alliant has 30 days to convince the minister to change his mind.

But that period ends May 8, and with the deadline looming, MDA has requested a meeting with Mr. Prentice -- although it has no legislated right to, and has so far not received -- and set out on a last-ditch charm offensive to convince Canadians that the sale is the best of all possible options.

If the sale is blocked, MDA executives have sketched out three contingency plans, Karel Vanturennout, MDA's senior vice-president of strategic development, said in an interview Wednesday.

It could buy a larger U.S. space company to boost its presence in the world's largest space market, but that would deny MDA shareholders an expansion of its fast-growing real estate information business. Or it could partner with U.S. defence companies, but risk having its technology stolen.

Or, in what Mr. Vanturennout called the most favourable option, MDA could bolster its U.S. presence by hiring hundreds of U.S. workers and moving a "fair amount of export work" across the border so it can bulk up its presence there enough to access U.S. contracts.

"You cannot do that unless you have a pretty sizeable company there," he said.

Still, he would far prefer the current deal go through.

His argument? That MDA has been U.S.-owned before, in the late 1990s under Orbital Sciences Corp., and experienced none of the doomsday predictions made by opponents of the deal.

Orbital "didn't rape and pillage us, they made us successful," said Mr. Vanturennout. "During the Orbital ownership, that is the period in which MDA became Canada's space company .... Employment doubled and our revenues quadrupled. So we have been through that whole experience with a lot of positives and no negatives."

What MDA has run into this time, Mr. Vanturennout suggested, is an image problem. Under Orbital, MDA kept its name. Under Alliant, it would change to ATK Canada.

"It is a bit of a branding issue," he said.

Critics of the deal have offered far different arguments. When MDA was sold to Orbital, it was a small player in Canadian aerospace. Today, after swallowing up many competitors, it is the domestic heavyweight, which could dramatically change the consequences for Canada's industry if it is sold.

Others have also argued that Alliant's plans to use MDA's Canadian engineers for classified U.S. defence projects could be blocked by legal issues on both sides of the border.

Alliant has said it intends to use MDA to build cheap, quickly-launched battlefield surveillance satellites as it pursues so-called "operationally responsive space" contracts.

Experts in Canadian trade and employment law say it will not be possible for MDA engineers to do that work without breaking domestic human rights laws, since the licences required for classified U.S. work require Canadians to discriminate against people born in some countries.

In addition, the bureaucratic hurdles to bringing classified U.S. defence work to Canada could eventually push Alliant to cut Canadian workers out of important projects, or at very least prevent them access to "the juiciest contracts any more, because the American parent has found it more convenient to deal with those things in the U.S.," said John Boscariol, a Toronto-based trade lawyer and expert in cross-border defence issues.

Mr. Vanturennout acknowledged that getting Canadians access to classified work "may be a bit of a nuisance."

But, he argued, Canadian employees under Alliant should still be able to work on U.S. defence contracts by building sophisticated space technology sub-systems, but being kept blind to their classified uses.

"It certainly doesn't inhibit the business model, as people try to make us believe," he said.

There is a precondition, I think for a spacefaring nation – and Canada is one of the pioneers in that field – to have (a) national champion company (companies): a national space programme.

I think there are some military requirements in the surveillance, warning and control domain.

Just as it is conventional wisdom amongst engineers to say that “you cannot manage what you cannot measure,” so should it be for politicians, bureaucrats and soldiers to say “you cannot control what you cannot see” and the way we ‘see’ our vast, lightly populated territory and the contiguous waters and the airspace over both is from space – specifically from satellites in non-geostationary orbits.

Meeting that requirement, if politicians, bureaucrats and solders agree that it is a valid requirement, would be a neat, Canadian ‘fix’ for MDA’s dilemma.

(You may recall that some satellites are put in orbit about 35,000 km above the earth where they orbit the planet at the same speed as the earth rotates thus being ‘parked’ above a point on the ground – on the equator, actually. The problem is that the footprint of these satellites ends, for Canada, at about Eureka (80o13’ N/86o11’W) and there is a bunch of Canada beyond that footprint.)

 

[Flip]

ER!
Now we agree!

A Canadian, "Canada First" space program would be exactly what I would want to see.

An desirable alternate would be a change in US law to allow for CANADIAN suppliers.
I would prefer not to reward Americans for this particular law by selling off MDA.

As Canadians we do have seperate intersets and something to offer in world of technology.
Better to offer what we have on our terms.




 

 

[a_majoor]

There is a precondition, I think for a spacefaring nation – and Canada is one of the pioneers in that field – to have (a) national champion company (companies): a national space programme.

I don't normally disagree with your points, but what you are suggesting is dangerously close to the protectionist cult of corporate welfare that gave us such "national champions" as Bombardier

I think there are some military requirements in the surveillance, warning and control domain.

You are absolutely correct there, but in the absence of a well defined and well funded Canadian program to do so, there is no need to hamstring MDA. Indeed, the real danger is the best and brightest who work at MDA will migrate to real companies which are able to offer challenging and ongoing projects, leaving behind a hollow shell which will not even be able to meet the goals you suggest. (The claim that we are preserving intellectual property is irrelevant, you need an actual intellect at the wheel to make it function. The loss of critical skills due to the team disbanding and atrophy will cancel out any perceived benefit from holding on to the files; technologies which can be replicated in any event by competitors who have an eye on the prize).

(You may recall that some satellites are put in orbit about 35,000 km above the earth where they orbit the planet at the same speed as the earth rotates thus being ‘parked’ above a point on the ground – on the equator, actually. The problem is that the footprint of these satellites ends, for Canada, at about Eureka (80o13’ N/86o11’W) and there is a bunch of Canada beyond that footprint.)

One interesting footnote is satellites can be in "inclined" equatorial orbits. Seen from the ground, the satellite will make a "figure eight" pattern in the sky every 24 hours, crossing the equator at the same point and thus observing both the northern and southern hemispheres. Other types of orbits are possible, perhaps the most useful being the very eccentric orbit pioneered by the former Soviet Union where the satellite was timed to reach maximum altitude, visibility and dwell time over the target area and minimum altitude on the opposite side of the world.

Of course all this is moot without the desire to do so, the will to make it happen and the ability to react to the data such satellites (or other means of surveillance like UAV's or Canadian Rangers) provide.

 

[Edward Campbell]

I don't normally disagree with your points, but what you are suggesting is dangerously close to the protectionist cult of corporate welfare that gave us such "national champions" as Bombardier

You are absolutely correct there, but in the absence of a well defined and well funded Canadian program to do so, there is no need to hamstring MDA. Indeed, the real danger is the best and brightest who work at MDA will migrate to real companies which are able to offer challenging and ongoing projects, leaving behind a hollow shell which will not even be able to meet the goals you suggest. (The claim that we are preserving intellectual property is irrelevant, you need an actual intellect at the wheel to make it function. The loss of critical skills due to the team disbanding and atrophy will cancel out any perceived benefit from holding on to the files; technologies which can be replicated in any event by competitors who have an eye on the prize).

One interesting footnote is satellites can be in "inclined" equatorial orbits. Seen from the ground, the satellite will make a "figure eight" pattern in the sky every 24 hours, crossing the equator at the same point and thus observing both the northern and southern hemispheres. Other types of orbits are possible, perhaps the most useful being the very eccentric orbit pioneered by the former Soviet Union where the satellite was timed to reach maximum altitude, visibility and dwell time over the target area and minimum altitude on the opposite side of the world.

Of course all this is moot without the desire to do so, the will to make it happen and the ability to react to the data such satellites (or other means of surveillance like UAV's or Canadian Rangers) provide.

I don't think we are disagreeing.

There's nothing inherently wrong with national champions so long as there is sufficient useful work, which they win on a fair, businesslike basis, to sustain them. There is none, or, at least very little, in Canada today so you are right, we should not hamstring MDA by subjecting them to the death of a thousand cuts.

If we want to control our territory, contiguous waters and airspace then we need to be able to 'see' it all - all the time. But, at the current rate of growth, around 2% per year, year after year, the defence budget will be unable to sustain the current forces in being - there is not enough money for what we have now, there is none for new capabilities.

 

[MarkOttawa]

Bad decision:
http://www.theglobeandmail.com/servlet/story/RTGAM.20080509.wradarsat0509/BNStory/Front

Hours after issuing his final veto on the proposed $1.3-billion sale of MacDonald Dettwiler and Associates' space division to an American defence contractor, Industry Minister Jim Prentice said Friday his government will work hard to gain full access to U.S. markets on behalf of MDA and other Canadian firms.

“Lack of market access should not be a reason for Canadian firms to move to other countries or for Canadians to sell their business to foreigners,”  [emphasis added--but it may well be an unpleasant reality] Mr. Prentice said at a news conference.

He also announced Friday that the Canadian Space Agency had signed a four-year, $109-million contract extension with MDA, of Richmond, B.C., to continue its support of the International Space Station.

MDA's leading-edge technology, developed in Canada with the support of the federal government, was a key factor in Ottawa's decision to block the sale of MDA's space and satellite division to Alliant

MDA had struck a deal to sell its space and satellite division to Alliant in part, it said, to gain access to the lucrative United States space and defence markets.

However, early Friday, the Canadian government reiterated its earlier decision to block the sale because it did not want to lose jurisdiction over the Canadian-developed technology – particularly the state-of-the-art Radarsat-2 satellite and the Dextre space robot.

This rare decision to block a foreign takeover should not affect the market for Canadian-made products, Mr. Prentice said.

“We have a symbiotic relationship with the United States. They benefit from our technology; we benefit from their markets. That's the basis of a very good relationship,” he said.

“We will work hard to gain full access to those markets for Canadians and Canadian firms.”

Mark
Ottawa