Volume 2: Reaching Higher: Canada's Interests and Future in Space – November 2012
Review mandate and process
Space-based assets are strategic infrastructure essential to the functioning of modern economies and societies. They have made possible a global communication revolution, new ways of monitoring the Earth's surface and atmosphere, the command and control of transportation systems and military hardware, and a more profound understanding of our place in the universe.
A particular feature of progress in space has been the pervasive presence of government. In part, this has stemmed from the near inseparability of space from national security and geopolitical influence. But it also reflects the reality that space is a "long game" with significant risks and the need for patient money.
That reality is changing, as technologies advance and more and more private companies capitalize on space-related opportunities. But the gradual shift in the public-private balance in space does not affect one incontrovertible truth: space will be vital to securing Canada's national interests into and beyond the middle of the century. If Canada is to remain among the global leaders in space, business as usual won't be enough. Today, as dozens of countries scramble to join established space-faring nations in sending and operating assets high above the surface of the Earth, Canada needs a "reset" to define clearly what it wants and needs to do in space in the decades ahead.
The structure of the space industry
The space industry is composed of three main segments:
- the space segment encompasses the design, manufacturing, and deployment of hardware into space (e.g., satellites and spacecraft);
- the ground segment includes the design, construction, and operation of equipment and facilities on the ground used to operate the hardware in space and receive its data transmissions; and
- the downstream applications and services segment uses the data generated by the equipment in space to provide a number of services, such as Global Positioning System data and mapping images.
The burgeoning global interest in space arises from a simple but compelling calculus: designing, manufacturing, and controlling satellites and participating in space exploration and science missions make nations richer, safer, smarter, and better-respected. These activities fire the imagination, instil pride, save lives, and enhance quality of life in countless, sometimes invisible, ways.
Canada's natural endowment of geography, resources, and northern location gives rise to powerful reasons to get it right when it comes to space. Our economic prosperity, our national security, and the management of our environment depend fundamentally on how space priorities are shaped and executed in pursuit of practical outcomes.
Against this backdrop, the government announced that it would initiate "a comprehensive review of all policies and programs related to the aerospace/space industry to develop a federal policy framework to maximize the competitiveness of this export-oriented sector and the resulting benefits to Canadians."Footnote 1
The Aerospace Review was formally announced on February 27, 2012. David Emerson was appointed Review Head, and was joined by a three-person Advisory Council comprising Sandra Pupatello, Jim Quick, and Jacques Roy.
From the outset, a commitment was made to a review that would be independent, evidence-based, grounded in a long-term perspective on global and industry trends, open to innovative but practical approaches and solutions, and aimed at producing concrete, fiscally neutral recommendations. This volume provides the Review's findings and advice with respect to the space sector; a companion volume covers the aerospace sector.
In conducting its research and analysis, the Review relied on four sources of information and advice.
First, working in close consultation with the Aerospace Industries Association of Canada, it established industry-led working groups in the following areas:
- technology development, demonstration, and commercialization;
- market access and market development;
- aerospace-related public procurement;
- small business and supply chain development;Footnote 2
- people and skills; and
The working groups brought together representatives of industry, academic and research institutions, and unions, as well as federal government officials participating as observers. The working groups were given specific mandates, including questions for consideration, and each held a series of discussions that led to the preparation of reports with findings and advice to the Review Head. While working group chairs and vice-chairs were not obligated to achieve consensus, they were encouraged to strive for the widest possible agreement among participants and to ground their counsel in sound evidence and analysis.
Second, the Review Head and Advisory Council members conducted a series of roundtables, meetings, and site visits in Canada and major aerospace nations. Domestic meetings were aimed primarily at understanding the state of the Canadian industry and its views on which policies and programs have been working well or falling short. International meetings were aimed at learning about best practices in other countries with vibrant aerospace and space sectors, and assessing both emerging competitive challenges and opportunities for increased collaboration and market success.
Travelling mainly as a group, the Review Head and Advisory Council members visited Montreal, Toronto, Winnipeg, Vancouver, and Halifax. Travelling for the most part individually, they visited the United States, the United Kingdom, France, Germany, China, Japan, Russia, and Brazil.
Third, the Review commissioned 16 studies from independent experts (see Appendix A) on a range of topics, including the impact of global trends on Canada's space and aerospace sectors; export control regimes in Canada and abroad; a comparison of the structure and budgets of space programs in Canada and other major space-faring nations; and the potential role of space assets in advancing Canada's Northern Strategy.
Finally, the Review invited written submissions (see Appendix B) from interested parties through its website, ultimately receiving some 25 documents from a variety of organizations, companies, academics, and private citizens.
Most of the material and analysis generated through these four streams of information and advice are available through the Review's website and, it is hoped, will continue to serve for some time as an important source of information and ideas for those interested in the shape and future of the aerospace and space sectors.
Drawing on all four streams, the Review examined current conditions and long-term trends and considered the roles and perspectives of all players.
The Review's analysis was guided in part by the principle that in a market economy, industry has the primary responsibility for its own fate and the role of government must be carefully delimited. In the space sector, this principle has been tested because government has historically been the dominant sponsor and consumer of space assets and applications. Going forward, fiscal constraints, advancing technologies, and the ingenuity of the private sector will inevitably lead to a more balanced and diverse range of activities and actors in space.
The role of government in supporting Canadian industry is concentrated in a number of key areas:
- Supporting research and development (R&D) that might take years to produce marketable results but has the potential to generate substantial benefit to the public good, in part through risk sharing.
- Improving the functioning of markets and business performance by facilitating communication between firms whose needs and capacities may be complementary, and between industry and academic and research institutions.
- Making procurement decisions that strengthen domestic industries, and therefore the national economy, while respecting international trade rules and acquiring the best product for a reasonable cost.
- Protecting the public—and the industry—by ensuring that Canadian products are safe and that sensitive technologies do not fall into the hands of hostile states or interests.
- Improving labour market efficiency by supporting vibrant academic institutions that understand the needs of industry and by facilitating recruitment of talent from abroad where serious domestic skills shortages exist.
- Levelling the global playing field for Canadian companies by negotiating equitable rules of the game, ensuring that these rules are respected in practice, and providing companies with information about foreign markets.
- Providing financing to support the purchase of Canadian products, as long as the terms of such financing produce a benefit to taxpayers and the economy, and fall within the bounds of international agreements.
Though the role of government must have clear limits, there has been historical recognition in Canada that space-related public investments are essential for the achievement of fundamental imperatives of nationhood, including guarding the country's borders and coastlines, raising its global standing, linking together and serving a small population spread across a huge land mass, spurring economic growth, protecting the environment, advancing the development of new technologies, and pushing the boundaries of knowledge.
Those imperatives will become more relevant than ever in the coming decades—and will severely test any constraint of "fiscal neutrality." While success over the next few years does not require a huge infusion of additional public resources, we are approaching a time when unlocking Canada's full potential will require major investments in space infrastructure.
For now, clarity of purpose and concrete action plans—supported by a robust governance and management framework, smart public procurements, and a focus on developing technological and commercial capacity—can go a long way toward keeping Canada among the global leaders in space.
- 1 Government of Canada, Budget 2011: The Next Phase of Canada's Economic Action Plan, (Ottawa: Public Works and Government Services Canada), 2011. (Return to footnote reference 1)
- 2 This working group ultimately submitted two separate reports: one on small businesses and one on supply chain development. (Return to footnote reference 2)