Op-ed | Canada’s space sector set for a relaunch
On April 1, MDA, Canada’s leading space technology company, best known for developing the robotic Canadarm used on the International Space Station, raised 400 million Canadian dollars ($320 million) in its initial public offering on the Toronto Stock Exchange.
Last November, Telesat Canada announced that it was combining with its major shareholder Loral Space & Communications to form one public company to finance its LEO constellation, wherein the newly formed Telesat Corporation will be a publicly traded Canadian incorporated and controlled company.
This is encouraging and in line with the global space industry which has witnessed a growth trajectory last year despite the overall economic slump due to the pandemic. Investment in the space industry set a record in 2020 with the space infrastructure segment clocking $8.9 billion, while the total 2020 investment of $25.6 billion in the space sector was the third highest in the decade, according to a report by Space Capital.
Last June, the Canadian Space Agency announced that it has almost doubled the existing budgets of a number of its funding programs, for a total investment of 52 million Canadia dollars over two years. “The additional funds injected into the Canadian economy will have a direct impact on about 100 projects led by SMEs and big companies. Twelve Canadian universities also stand to benefit,” CSA said in a statement.
In December, Canada’s participation in the lunar Gateway project was kicked off by way of a contract to prime contractor MDA. As expected, Canada’s prowess in space robotics will help develop the moon-orbiting space station with Canadarm3, a smart robotic system built by MDA, which includes a next-generation, AI-based robotic arm as well as equipment and specialized tools. As CSA notes, Canada’s participation in the lunar Gateway is the cornerstone of its space strategy, which aims to leverage Canadian strengths like robotics, while advancing science and innovation in exciting areas like artificial intelligence, biomedical technologies, food production, and research on the impact of climate change on Earth’s atmosphere. It is also expected to boost the hundreds of domestic companies that will be involved with MDA on the project.
Also in December, the CSA said a Canadian astronaut will be part of Artemis 2, the first crewed mission to the moon since 1972.
Canada’s space industry seems to be on the path of a relaunch. The relaunch is two-pronged — backed by an ambitious and hungry private sector and increasing government support.
The momentum actually started building up since February 2019, when Prime Minister Justin Trudeau announced a large cash infusion — roughly 2 billion Canadian dollars over the next 24 years – for the CSA. It was then he had announced Canada’s intention to join the NASA-led lunar Gateway project.
“Canada’s historic investment will create good jobs for Canadians, keep our astronaut program running and our aerospace industry strong and growing, while opening up a new realm of possibilities for Canadian research and innovation. With the Lunar Gateway, Canada will play a major role in one of the most ambitious projects ever undertaken. Together, with our partners from around the world, we’ll continue to push the boundaries of human ambition, and inspire generations of kids – and adults – to always aim higher and aspire to something greater,” Trudeau said.
The turnaround came after years of meandering. A University of British Columbia study in 2016 found that Canada spent the least on its space program within the G-8 countries in terms of actual dollars and the second lowest per capita. At that time the U.K. was the lowest per capita but since then it has upped its spending.
At that time, Canada provided about 16 million Canadian dollars a year towards space exploration missions and technology, and about 250 million Canadian dollars in base funding for its space agency — 50 million Canadian dollars less than in 1999. Calling it a “missed opportunity,” the report said Canada was a world leader in space, and every 1 billion Canadian dollars invested into space innovation generates an additional 1.2 billion Canadian dollars in economic activity. Earlier, a 2015 report from Euroconsult — Comprehensive Socio-Economic Impact Assessment of the Canadian Space Sector — found that the Canadian space sector’s annual revenue was around 5.4 billion Canadian dollars annually — growing at a rate higher than the national GDP (3.7% on average during the last five years compared to 1.8%), driven by a dynamic downstream sector — while employing about 25,000 people.
Noting that the Canadian space industry recorded its highest market share in the commercial satellite manufacturing market (for telecommunications), Euroconsult warned that “eroding R&D investments in the national space program challenge the position of Canadian companies in a tough, globally competitive market.”
However, the turnaround now for Canadian space sector backed by a steady government push opens up huge opportunities for the private industry, including new players both in the upstream and downstream sector.
Canada was the third country, only behind Soviety Union and the United States, to enter the space race, when it launched a satellite — Alouette — to study Earth’s ionosphere, in 1962.
It followed up with the launch of Anik in 1972 as it became the first country to operate a commercial domestic communications satellite from geostationary orbit. Anik1, an Inuit word meaning brother, was shortly followed by Anik 2 which enabled deployment of a direct-to-home broadcasting service in 1978 across Canada’s vast landmass, including the Far North.
Undoubtedly, the most famous Canadian aerospace achievement is the Canadarm — the first piece of space robotics — used in orbit in 1981 on the U.S. space shuttle orbiters to deploy, maneuver, and capture satellites and also deploy the Hubble telescope. This was followed up with the Canadarm2, which helped build the International Space Station, and is now used for berthing the commercial vehicles and inspecting the station. Now, Canadarm3 for ;unar Gateway mission will help maintain, repair and inspect the Gateway, besides capturing visiting vehicles, relocating Gateway modules, helping astronauts during spacewalks, and enabling science both in lunar orbit and on the surface of the moon.
Last November marked 20 years of continuous human presence on the International Space Station. Canada is one of the station’s partners, along with the United States, Russia, Europe and Japan. Other than the Canadarm2, the country has also contributed with Dextre (a robotic handyman, and the Mobile Base System, a transport and storage platform.
Long before space-borne synthetic aperture radar (SAR) became a hot topic, Canada pioneered the technology with its Radarsat series. From its launch in 1995 until 2013, Radarsat-1 provided operational service to government and commercial users, making Canada a global leader in space-based SAR technology. This continues with Radarsat-2, and the Radarsat Constellation Mission (RCM) launched in 2019. A three-spacecraft fleet of Earth-observation satellites, the primary goal of RCM is to provide continuous C-band SAR data to RADARSAT-2 users. It is said to be the world’s most advanced, comprehensive method of maintaining Arctic sovereignty, conducting coastal surveillance, and ensuring maritime security.
In February, MDA, the prime contractor for the Radarsat satellite missions, announced it was working on a new commercial SAR satellite mission to augment the Radarsat-2 program. The new mission will build upon MDA’s existing space-based C-band SAR technology, and will provide operational continuity for its existing Radarsat-2 customers.
Return of MDA
In a way, MDA has been an active partner in Canada’s glorious space legacy. Starting from the path-breaking space robotics of the Canadarm or the pioneering Radarsat missions, it was always MDA — once known as MacDonald, Dettwiler and Associates — that was at the forefront of all innovations alongside the CSA.
In 2017, MDA merged with U.S.-based DigitalGlobe in a complicated deal that led to the formation of Maxar Technologies Inc. Two years later, Maxar sold its Canadian assets – the original MDA – to a consortium of Canadian investors led by Northern Private Capital, for 1 billion Canadian dollars. The transaction — a restructuring for Maxar to cut its debt and prioritize investments in its core businesses — included all of MDA’s Canadian and U.K. businesses, encompassing ground stations, radar satellite products, robotics, defense, and satellite components, representing approximately 1,900 employees.
Given the historic role played by MDA in the Canadian space industry’s growth story, it is symbolic now that the company’s turnaround and subsequent IPO becomes a significant milestone in the overall sector’s relaunch path once again.
The infusion of funding will come handy in expanding operations and innovations. Already a key supplier to CSA and NASA, MDA is in a great position to leverage the fast-expanding global space industry and the need for cutting-edge space robotics.
The path forward
“This a significant time for Canada’s space program and it is very meaningful for me to be part of it. I want space to be a true economic engine for Canada and to contribute to not only building back the economy, but building it back better,” Canadian Space Agency President Lisa Campbell commented at the International Astronautical Congress’s Heads of Agencies event, while noting the instrumental role she envisions space will play in Canada’s future.
However, what could really help is a federal push for further commercialization. This includes updating regulations to recognize the growing role of the private sector in space, including revision of the procurement strategy that makes it easier for private participation. There is a lesson here to learn from NASA.
Canada’s space strategy recognizes Earth observation and scientific data as essential for clean growth and monitoring the health of the planet. “In fact, it is now an integral part of daily life in Canada, helping connect and inform us all, enabling everything from navigation, cell phone services and television broadcasts to financial transactions,” it notes. As a vast country with a relatively small population, Canada relies on the information and imagery gathered by space-based systems to observe and monitor the country, and support essential government functions such as environmental monitoring, disaster response, and search and rescue. Space systems are also vital to the Canadian Armed Forces. The new space environment is creating jobs, enabling economic growth, and leading to socio-economic benefits in sectors as diverse as farming and clean tech, the space strategy notes.
The global demand for space is expected to grow at a record pace, according to Morgan Stanley, expected to nearly triple in size in next 20 years, from $350 billion in 2017 to $1.1 trillion in 2040. From a Canadian perspective, a study by Northern Sky Research forecasts that between 2017 and 2027, annual demand for EO data and services in the country will rise from just over $3 billion to close to $7 billion.
As François-Philippe Champagne, minister of innovation, science and industry, says:“Throughout 2021–22, the CSA will continue to implement Canadian Space Strategy: Exploration, Imagination, Innovation, which will help ensure that Canadians are ready to take advantage of the jobs of tomorrow, while enabling our space industry and academic institutions to be part of the new space economy. Thanks to the unique opportunities that space provides, the investments that we are making in space will contribute to Canada emerging from COVID-19 with strength and resilience. ” He goes on to say that “In addition, the CSA will advance its activities in space-based Earth Observation (SBEO), which will help tackle complex challenges, including climate change.”
Jonathan Murphy is founder and managing director of GoGeomatics Canada and founder and chair of the GeoIgnite conference taking place April 21-23.