Toronto — Hours after issuing his final veto on the proposed $1.3-billion sale of MacDonald Dettwiler and Associates' space division to an American defence contractor, Industry Minister Jim Prentice said Friday his government will work hard to gain full access to U.S. markets on behalf of MDA and other Canadian firms.
“Lack of market access should not be a reason for Canadian firms to move to other countries or for Canadians to sell their business to foreigners,” Mr. Prentice said at a news conference.
He also announced Friday that the Canadian Space Agency had signed a four-year, $109-million contract extension with MDA, of Richmond, B.C., to continue its support of the International Space Station.
MDA's leading-edge technology, developed in Canada with the support of the federal government, was a key factor in Ottawa's decision to block the sale of MDA's space and satellite division to Alliant Techsystems Inc.
The International Space Station is seen from the Space Shuttle Endeavour in this file photo from March, 2008. (AP)
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MDA had struck a deal to sell its space and satellite division to Alliant in part, it said, to gain access to the lucrative United States space and defence markets.
However, early Friday, the Canadian government reiterated its earlier decision to block the sale because it did not want to lose jurisdiction over the Canadian-developed technology – particularly the state-of-the-art Radarsat-2 satellite and the Dextre space robot.
This rare decision to block a foreign takeover should not affect the market for Canadian-made products, Mr. Prentice said.
“We have a symbiotic relationship with the United States. They benefit from our technology; we benefit from their markets. That's the basis of a very good relationship,” he said.
“We will work hard to gain full access to those markets for Canadians and Canadian firms.”
Under the contract with the Canadian Space Agency, MDA will continue to provide logistics and engineering and technology services for the Canadian-made Mobile Servicing System on the International Space Station,” the minister's office said in a news release.
“The Mobile Servicing System, a multi-faceted sophisticated robotics system, is Canada's main contribution to the International Space Station and is critical to its assembly, maintenance, and servicing. It consists of three elements: Canadarm2, the Mobile Base System and Dextre. Canadarm2 and the Mobile Base System were delivered and installed on the station in 2001 and 2002 respectively,” the statement said.
In announcing earlier Friday that the deal with Alliant, a major U.S. arms manufacturer, would not go ahead, Mr. Prentice said: “I have confirmed my initial decision that I am not satisfied that ATK's proposed acquisition of the Information Systems Business of MDA would likely be of net benefit to Canada.”
The Radarsat-2 satellite has the unique surveillance ability to “see” through clouds, darkness, haze, snow and icecaps. Dextre, a space robot that made its debut this spring, enables space crews to perform repairs and maintenance operations without having to leave their pressurized cabins.
In blocking the sale, Mr. Prentice invoked a rarely-used provision of the Investment Canada Act, saying that the deal was not in Canada's best interests.
Mr. Prentice said his government will continue to support Canadian firms involved in the space industry.
“Our Science and Technology Strategy pays particular attention to the commercialization and widespread use of innovation. We will keep a strong focus on ways to apply space science and technology to improve our economy and the quality of life of Canadians,” he said.
“The new applications of space science and technology are growing exponentially. We have no idea what the future will hold, but we do know that the private sector has been very good at turning space applications into a better quality of life here on earth,” he said.
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