What if? Imagine Canada’s space industry if MDA’s space division had been sold in 2008
August 10, 2022
MDA’s space business is riding high these days.
The company, headquartered in Brampton, Ont., announced earlier this year that its Canadarm3 robotic arm technology will be commercialized for the first time, as private space company Axiom Space picked up robotic interfaces for building its own space station.
“The sale of our Canadarm3 technology to Axiom Space signifies a major shift in the commercial landscape, and is a turning point for MDA as we fulfill our vision of bringing a full suite of space robotics products to market,” CEO Mike Greenley said in a statement. (MDA declined comment for this story.)
Such a milestone seemed unimaginable back in 2008. MDA’s shareholders approved a deal to Alliant Techsystems that would have sold its space technology division – including the iconic Canadarm robotic arm line and the Radarsat Earth observation satellites – to an American company for $1.3 billion.
Their rationale, amid declining interest from Canadian customers, was that MDA (then known as MacDonald, Dettwiler and Associates Ltd.) needed more access to American pocketbooks to make the space business viable. MDA was also planning to pivot into real estate lender solution services, “as a full service provider of residential property information solutions to lenders in the United States,” according to a 2008 statement from then-president and CEO Daniel Friedmann.
However, then-federal Industry Minister Jim Prentice stepped in to halt the deal, saying there are no “net benefits to Canada in this transaction” and telling reporters at the time that sovereignty questions concerning Radarsat’s Earth observation capabilities played into his decision.
But how would things have ended up if the MDA sale had been allowed to go forward?
Government intervention “saved the company”
The company may not have easily made it through the 2008 to 2010 economic downturn, long-time Canadian space historian Chris Gainor told Research Money.
“One thing that isn’t widely realized is that the government, by doing what it did, actually saved the company,” he said. “MDA decided to go all-in on property registration in 2008, which was the worst possible time they could have done that, given the economic meltdown that happened a few months after they tried to sell the space division.”
Assuming that would have happened, Gainor said it’s difficult to imagine the resulting impact on the Canadian astronaut program and on the International Space Station (ISS).
Traditionally, Canada used robotics technology to pay for astronaut seats on the ISS, and Canadarm technology continues to be used there today to support astronaut activities and basic research. Also, MDA’s presence supports a network of suppliers and component manufacturers that would have been severely affected had its space division been sold.
“That is an alternate universe,” Gainor said, when asked about the implications on the Canadian space program at large. “If they’d have been allowed to go ahead, that may have been the end of MDA, and who knows what would have happened to that part of the Canadian space industry.”
The impact on Radarsat and Canadarm’s lines would have been be nuanced, considering what would have happened for national security. Canada still would have had access to Radarsat’s Earth observations, as security needs call for it. Robotics tech would also still have been available to Canadians on the ISS.
As for seats on the ISS, Canada also may have been able to pivot to other technology, such as artificial intelligence, to buy seats on the space station from NASA. AI is a big watercooler topic in the Waterloo, Ont.-based Perimeter Institute powerhouse of supported research institutions in Canada, for example, and also popular for investment among government policy-makers.
Applying AI to space operations presents a challenge
But deciding in which direction AI should take us has been difficult, given the number of options available right now. Like the old VHS versus Beta discussions of the early multimedia age, the number of platforms for AI can be similarly overwhelming – and nobody wants to make the wrong bet at an early stage.
“The challenge is to apply artificial intelligence and big data analytics to bring tangible advancements in the operation and utilization of space assets in support of government operations, public safety, public health and discovery,” an Innovation, Science and Economic Development Canada 2018 statement said of the issue.
Applications for space exploration directly are more difficult to assess, but the Canadian Space Agency’s (CSA) interest in developing AI-assisted medical systems for long-term space exploration in the recent Deep Space Healthcare Challenge suggests that sensors can be repurposed for other means, to see changes in the human body as well as changes on a distant world.
Otherwise, perhaps the CSA might have started looking to other options to fly its astronauts had MDA’s space division been sold. In the intervening decade, SpaceX has begun to offer seats for not only professional astronauts, but even people with no direct space experience. This included a mission for Axiom Space called Axiom-1, which ran in 2022.
Axiom also brokered a deal recently to fly the first United Arab Emirates astronaut for a long-duration mission into space, showing that the company can act as a provider of seats for ISS missions as well. Perhaps Canada might have been able to get seats this way if MDA’s technology was not available.
MDA stays in Canada
MDA is doing well today, but it wasn’t an easy path. The real estate information business it was pursuing was sold in 2011, following the global crash. But MDA’s acquisitions eventually did bring the company in front of U.S. customers in a way that satisfied Canadian security needs, through buying Space/Systems Loral in 2012 and then buying DigitalGlobe in 2017.
The latter acquisition saw MDA remain in Canada while a larger entity, Maxar Technologies, formed as its owner with headquarters in Colorado. This allowed for bids on security contracts in the U.S., although the relationship was brief after Maxar put MDA up for sale in 2019 for $1 billion to pay down debts, one of a few business sales Maxar did at that time.
By 2020, a Canadian group (Northern Private Capital) closed its buy of MDA to take the company public in 2021, putting it firmly in the Canadian market again.
But is there enough business in the country to sustain MDA? Much of the Canadian space community is asking for a U.K.-style National Space Council, a government-only body that would be more closely integrated into the government at a Cabinet level.
This would be an even closer relationship than the past Space Advisory Board, a group of industry professionals bringing their suggestions to the government for access (a board that was shut down in 2020). That unique access would allow for more strategy development, potentially enhancing the space strategy to create metrics for the community.
Space, to many coalition players, languished in Canada generally in the 2010s despite the Space Advisory Board’s intervention later in the decade when it was formed. Both the Conservatives and the Liberals did little to act on industry needs, even when then-NASA administrator Jim Bridenstine attended a major space conference in Ottawa in November 2018 asking for participation in a future lunar landing program with humans, called Gateway.
By early February 2019, Canadian companies were banding together under a banner – Don’t Let Go Canada – a huge publicity campaign initiated by the Aerospace Industries of Canada and MDA urging the federal government to put space in focus. This included papering wraparound ads on city buses running through Ottawa’s downtown.
“The economic stakes of space participation are higher than ever,” the Don't Let Go Canada website stated, noting Canada was not only lacking a meaningful space plan, but had seen space research fall as a percentage of GDP relative to other countries. “The global space market is worth over US$380 billion today; analysts forecast it will grow to be a multi-trillion-dollar market in coming decades.”
The Liberal government responded, eventually, by releasing a space strategy in 2019 based on feedback from a space advisory board. While the space community has been asking for more direction, Canada did commit that year to Gateway and released plans for Canadarm3, giving MDA a reasonably clear path to acquire a valuable, government-backed contract that would give the company stability in the future.
Strategy needed for future space investments
What will be needed, however, is a compelling reason to invest even more strongly in space than today. Gainor argues that space should not be ignored – it underlies key technologies ranging from GPS and disaster response to environmental monitoring, along with providing potential spinoffs.
“It’s important for them to try and think one or two steps ahead of where things are at right now,” he said of the Canadian government, and urged them not to be afraid to spend money on untried technologies and understand that not every bet will be a safe one.
“Not everything is going to work out, and not everything has worked out in the past,” he said. “Generally, space has been a winner for the government as an export business but, but there are limitations to that, particularly with the Americans.”
He urged the government to not be solely reliant on one country, one company or even one industry in terms of serving as the market for space’s exports. If the Liberals indeed follow that strategy, it would take some of the pressure off of MDA, one of Canada’s largest space companies and with 2,000 employees in three countries – in Canada, the U.S. and the U.K.
Gainor said the key to keeping success for MDA and companies like it is to have a strategy, to stay flexible with company feedback and to keep looking ahead to the next frontier for space exploration – not only the physical places where we can go, but also the tools and skills that our workforce can pick up and pivot to areas of need like climate change and Indigenous affairs.