Canada's Conservative government has just blocked the sale of a division of the Canadian satellite firm MacDonald Dettwiler & Associates (MDA) to U.S. Alliant Techsystems. (Two Issues Combine to Scuttle an Aerospace Takeover,Ian Austen, New York Times, April 11).
The advanced satellite technology developed by MDA allows the Canadians to monitor their northern lands and waters, and shipping that may be entering those waters. The Canadian government is worried that the U.S. might gain control of the satellite system and use that control to compromise Canadian national security.
Mark, at the Canadian defense blog, The Torch, has done a nice series of posts on this. In Our new satellite surveillance capability... (January 12, 2008) he quotes from a Canadian National Defense backgrounder of January 10 to explain something about the satellite (Radarsat-2) and its associated information system (Polar Epsilon):
ccPolar Epsilon was initially developed to address the need of the CF [Canadian Forces - Ben] to improve surveillance capabilities over the Arctic and other large areas of responsibility. Polar Epsilon is a space-based wide area surveillance and support capability that is owned and run by DND [Department of National Defence - Ben].
Polar Epsilon wasn't in play in the proposed sale. The firm that makes the Radarsat-2 satellite that feeds the data to Polar Epsilon was:
The Polar Epsilon project involves using information from RADARSAT-2 to produce imagery for military commanders in their areas of responsibility during the conduct of operations. This includes the surveillance of Canada’s Arctic region, including its ocean approaches, the detection and tracking of foreign vessels, and support to CF operations globally. Polar Epsilon’s capability to enhance CF situational awareness is due to its ability to provide all-weather day/night surveillance in areas where other sensors are limited or unable to operate.
It's the sale of a division of MDA, which developed this technology, that was vetoed. This sort of scenario - as expressed by a think tank - might have bothered the government:
That raises the possibility that, if Canada wants a satellite image of a U.S. vessel moving through the Northwest Passage, for instance, the U.S. government could block MDA from providing it, he said...
Mark provides more commentary and background here RADARSAT-2: Sound and fury... (The Torch, April 2), and here RADARSAT-2 sale to be blocked (The Torch, April 10). Mark thinks the government made a mistake. He quotes from a story by Glen McGregor of the Ottawa-Citizen (April 2):
Canada will retain total control over its Radarsat-2 surveillance satellite regardless of who owns it, says the head of the space company whose proposed sale to U.S. interests has raised concerns about national security.
Daniel Friedmann, president of MacDonald, Dettwiler and Associates (MDA), says fears that the sale of his company to a U.S. defence contractor will jeopardize Canadian sovereignty are unfounded because the satellite will continue to operate under Canada's rules.
"Canada's foreign affairs minister regulates everything about that satellite," he said yesterday. "The minister has shutter control."...
The deal has also raised concerns about sovereignty, since Radarsat-2 was trumpeted by the Conservative government as key to continuing to assert Canada's control over the Arctic through remote surveillance.
However, Mr. Friedmann told a House of Commons industry committee yesterday that nothing other than the ownership of the company would change if the government approved the deal.
"The Canadian government is in control of what happens," Mr. Friedmann said.
Radarsat-2 is licensed to operate by the Canadian government, and ownership of the parent firm has no bearing on that relationship, he promised.
"As far as I can tell, it's a Canadian operation under Canadian law running a Canadian satellite," he told reporters later.
Operation of the satellite will remain with MDA's Canadian employees working from the Canadian Space Agency facility in St-Hubert, Que., he said.
Under ATK ownership, MDA would still be required to provide $445 million worth of remote sensing imagery from the satellite, he said. The firm will recoup its own $200-million investment in the Radarsat-2 by selling imagery to other clients, including the U.S. government.
Canada's export control laws would prevent a foreign owner from taking any of the equipment, software or technical documentation out of the country without the consent of the foreign minister.
In fact, the sale would strengthen MDA capabilities:
He insisted the deal with ATK would strengthen Canada's space industry by giving MDA and its 1,500 employees better access to the U.S. market.
"The No. 1 reason we picked this option was to maintain the jobs in Canada," Mr. Friedmann said. " I have to participate in U.S. programs."
Ironically:
There were no issues about sovereignty or control over Radarsat-2 when the then-Liberal government contracted MDA to start building it in the late 1990s, he noted. Then, the company was 100-per-cent owned by a U.S. firm, Orbital...
Finally, Mark himself notes that:
Note that RADARSAT-2 has only an expected seven-year life span, so it will cease operating before there is likely to be any significant maritime traffic in the Arctic that might raise sovereignty concerns for Canada. If Canadians want control of any further such satellites there is a simple answer: have the government buy MDA's space operations. And see how effectively and efficiently it can run things (there would seem to be no private Canadian interest in the radar satellite business). Simply preventing the current sale will do nothing to make the business commecially viable in the future for MDA--unless, instead of an actual government purchase, there are continuous and probably large government subsidies.
Mark's posts provide access to a wide spectrum of opinion.
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