Lack of short-term capital and long-term plan eroding Canada's space industry

New space strategy coming in June

By Debbie Lawes

A lack of short-term capital and a long term plan is rapidly eroding Canada's capacity to be a major player in the space sector, and at time when new markets are opening for space technologies and data. That's the warning from several industry professionals who participated in a day-long symposium in Ottawa November 8 organized by the Canadian Space Commerce Association (CSCA), as part of this year's Canadian Science Policy Conference.

In response, the industry is calling for a new model of federal support, one that sees government shifting from a developer of space technology to an investor and anchor customer of data generated by new generations of satellites.

"We don't have a plan and we don't know where the money is coming from, so you have everyone competing against each other for a small slice of a small pie," said Dr Iain Christie, executive VP, Aerospace Industries Association of Canada (AIAC).

Just one week later, Innovation, Science and Economic Development (ISED) minister Navdeep Bains committed to consult with stakeholders to identify the industry's top priorities. Spearheading those consultations will be a revitalized Space Advisory Board. The previous board, which Bains met with in April, is being replaced by a new board with a new mandate to produce a report that will feed into a new space strategy, expected by June 2017. The new members will be nominated by industry, and selected by the end of the year based on an open, merit-based system.

"Our strategic objectives will focus on using space to drive broader economic growth. We will do that by supporting talent, research and entrepreneurship within the industry. Our government believes that a space strategy is, in effect, a research and innovation strategy," Bains told delegates at the Canadian Aerospace Summit in Ottawa November 16.

Driving this transformative change is a seismic shift in the industry's business model that includes a move to smaller technology platforms, more private funding and more public-private partnerships to exploit new opportunities in sectors such defence, security, cybersecurity, finance, agriculture and mining. At the same time, governments around the world are renewing their investments in space. It's being called the second Space Age, or "new space".

"Space is going through a revolution … it's becoming more commercial. This is a world where government acts as a procurer of services and a facilitator of space business," said CSCA panelist Christian Sallaberger, president and CEO of Canadensys Aerospace Corp, a space systems and missions company headquartered in Bolton ON.

Canada is one of the top exporters of space technologies, but Sallaberger said "that's under threat now if we don't make new investments and manage that program wisely."

Of the G8 countries, Canada spends the least per capita on space. According to the OECD, Canada's investment in R&D currently stands at 1.69% of GDP, below the global average of 2.4%. What's more, between of 2007-2012, Canada's annual growth rate in R&D was -1.4%, compared to 2% for the OECD.

Dr Alexander MacDonald, senior economic advisor within the Office of the Administrator at NASA, said one reason for the low investment is that the Canadian Space Agency (CSA) is too concentrated in the Ottawa and Montreal regions, while Canada's industrial and academic expertise is spread across the country.

"Canada doesn't geographically distribute its space centres throughout the country, so that everyone in the country can participate and benefit," said MacDonald, who was speaking as an individual at the CSCA, and not on behalf of NASA. "A critical part will be geographic distribution of centres for a national space program."

Support for these clusters will likely come from the $800 million pledged for clusters and accelerators in the last federal Budget. Christie said the funding could be used to support virtual as well as physical clusters. "Government has a role to play in helping clusters create themselves, but they won't be the primary actor. It will be companies and investors. This isn't a model with a lot of public funding," he told symposium delegates.

Chad English, an Industrial Technology Advisor with the Industrial Research Assistance Program, and a delegate at the symposium, said much is happening behind the scenes to make more connections between government, industry and academia, and clusters are "where I think this is headed".

"We're also working with CARIC (Consortium for Aerospace Research and Innovation in Canada) to do co-development so we're not duplicating work. But we need industry and academia to herd the cats and get that plan together," said English.

New programs needed

Canadian Space Agency (CSA) president Sylvain Laporte said that space will be "tightly aligned" to the Innovation Agenda and other government priorities, like climate change and northern development. The AIAC also wants a champion in Cabinet who is responsible for the Canadian space program, "and can defend that plan, and resource that plan over the long term," said Christie.

On the funding side, the AIAC is calling for a "whole of government" space and investment program that relies on three pillars: a series of major flagship programs like RADARSAT or the Canadarm; a series of affordable shorter-term missions that balance scientific and commercial objectives while targeting different disciplines and technology sectors; and, greater support for technology development through mechanisms like the CSA's Space Technology Development Program.

The industry is also pushing the government to focus less on design and review, and more on becoming a marque customer of data services, "more like what the Space Act allows NASA to do," said Christie. Companies could then leverage that critical first buy to raise capital and attract other customers.

For example, the CSA has identified 50 "environmental control variables" that allow scientists to measure environmental changes happening over the long term.

"We have identified 50 ECVs and half of those must be monitored from space," Laporte said at the CSCA event. "That's great news for us. If you're not in the space climate change business, hopefully you've discovered there's going to be a great market there for you."

Christie said new funding and leadership will go a long way to reversing the erosion of Canada's space capabilities. "In this industry we need critical mass, with enough people in industry, government and academia. We are in serious danger of falling below that critical mass."

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