BUDGET 2011: Aerospace review shifts gears for Ottawa companies

Elizabeth
Elizabeth Howell
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The federal government's announced review of “all aerospace policies and programs” could represent a significant shift for Ottawa firms waiting for a never-released long-term space plan for the Canadian Space Agency promised three years ago.

(Stock image)

On Tuesday, the budget included a brief mention of a 12-18 month strategic review to examine the competitiveness of Canada's aerospace industry, a departure from what the CSA was tasked to do in 2008.

The CSA provides funding to a number of aerospace companies, but there are other government entities that also chip in to business, including the Department of National Defence.

Tuesday's announced review broadens the scope beyond the agency and examines the issue more from an industry point of view.

There was no specific mention made in the federal budget about which sectors of the industry it would affect, or which government departments would be included in the review.

However, the announcement comes amid news that Ottawa's Telesat is considering an initial public offering or, it is rumoured, a foreign takeover to address a widening currency exchange gap that is bringing down the satellite firm's profits.

Although Telesat traditionally has less government investment than other firms, it did applaud the Conservatives last year for loosening the rules on foreign ownership.

Stimulus funding for the Canadian Space Agency is winding down. On top of an approximate $370 million budget, the government department received $100 million in stimulus funding in 2008, the bulk of which eventually went to funding companies to create several Mars and moons rover prototypes.

Now that the budget is returning to normal levels in the coming year, a number of Ottawa aerospace companies are pondering alternate streams of income to continue growing.

One example is MacDonald, Dettwiler and Associates, which is based in Vancouver but has a large presence in Ottawa. Its near-sale of its space division in 2008 to a United States firm prompted the Canadian government to launch the long-term space plan creation in the first place.

That decision was made amid opposition cries that MDA and other space companies in Canada do not receive enough government funding, and complaints that the CSA did not have a permanent president.

Then-industry minister Jim Prentice appointed former astronaut Steve MacLean to the job, saying it was a task “of the utmost urgency.”

For at least several months, Mr. MacLean did consult with aerospace firms and other government departments to come up with ideas for the CSA plan.

Once the furor died down, however, the plan was never released. With the sale option closed, MDA instead worked to diversify its income stream and last summer, quietly said it is considering a business plan to refuel spent satellites.

Com Dev, meanwhile, has been seeking more commercial uses of its automatic identification of ship (AIS) filtering technology.

The firm, which has approximately 75 local employees, has a test satellite, called Nanosatellite Tracking of Ships (NTS), which has spent more than two years in orbit collecting information automatically broadcast from vessels, such as the origin of the ship's cargo and its destination.

After NTS was used for security purposes in the FIFA 2010 World Cup and the Vancouver Olympics, Com Dev announced it's now working on advanced mapping software to overlay with the technology that it can then sell to commercial users.

In the event of a federal election, it's possible the aerospace review could be altered or forgotten altogether in the coming months.

If that happens, it would be the second time in recent memory that the government fell shortly after an aerospace-related announcement; in 2008, voters went to the polls that fall, just weeks after Mr. MacLean was tasked to do the CSA review.

Organizations: Canadian Space Agency, Telesat, MacDonald, Dettwiler and Associates Department of National Defence.Tuesday Conservatives Com Dev FIFA

Geographic location: Ottawa, Canada, Mars Vancouver United States

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  • Chuck Black
    March 22, 2011 - 19:40

    I'm not sure that space focused business or the Canadian Space Agency should be lumped together with the rest of the aerospace industry. Our business economic, R&D drivers and big defining stories are much, much different. But maybe DND should. As I wrote back in October 2010: "Just take a look at how they've defined the current big, sexy industry story which, oddly enough, has absolutely nothing to do with rockets, Radarsat's, Martian rovers or long term space plans. Instead, it's all about sixty-five "first-strike shock-and-awe" Lockheed Martin F-35 Lightning II fighter jets the Stephen Harper government committed to buying back in July 2010 to replace Canada's aging fleet of McDonnell Douglas CF-18's. The final decision over whether to move forward with this purchase will be almost entirely a political decision, heavily dependent on who wins the next election..." If you want to read the rest of the article, go to http://acuriousguy.blogspot.com/2010/10/perils-of-being-niche-player-no-one-in.html#