Tuesday, May 23, 2017

Bombardier's Challenges

          By Brian Orlotti

Over the past few weeks, tottering plane and train maker Bombardier has faced a series of upheavals that have put its already shaky future on even even more unstable ground. Those upheavals, reminiscent of an earlier age of confusion and cancelled Canadian built planes, suggest lessons for both the Canadian aviation and space industries. 

A Bombardier C100 in Delta Airlines livery.  As outlined in the May 23rd, 2017 Leeham News and Comment post, "Delta shoots down Boeing’s CSeries dumping claim," not all US corporations are onside with the Boeing claim that Bombardier is "dumping" aircraft into international markets. Photo c/o Bombardier.

As outlined in the May 11th, 2017 CBC post, "Bombardier's Pierre Beaudoin to quit executive role," just hours before the company’s annual meeting in Dorval, QC, it was announced that Pierre Beaudoin, scion of the Bombardier family, was stepping down as Executive Chairman as of June 30th.

The news came amid a wave of public and shareholder outrage over board-proposed executive pay hikes of nearly 50%, despite massive employee layoffs, billions in debt still on its books and hefty bailouts from both the Quebec and Federal governments. Beaudoin later renounced the pay hikes and executives postponed their compensation plan to 2020. 

Prior to the annual meeting, five of Canada's largest pension fund managers along with several large American institutional investors had stated that they no longer supported Beaudoin’s re-election as Executive Chairman, opposed Bombardier's executive compensation plan and withdrew support for several director nominees. Beaudoin remains non-executive chairman of the company’s board of directors while Alain Bellemare, who replaced Beaudoin as CEO in 2015, remains in place as Chief Executive Officer.

Beaudin in the National Post. As outlined in the May 10th, 2017 Canadian Press article, "Canada’s largest pension fund manager and Alberta fund oppose Bombardier pay policy," the Canada Pension Plan Investment Board and Alberta Investment Management Corp. "joined several large institutional investors in withholding support for the re-election of Bombardier’s executive chairman and opposing the company’s executive compensation plan." Two days later, and as outlined in the May 11th, 2017 National Post article, "Bombardier chairman re-elected to the board amid public uproar over pay, steps back from executive role," Beaudin was re-elected as Bombardier chairman but promised to reduce his role in the company. Photo c/o National Post.

In an effort to bolster its dwindling cash reserves, and as outlined in the May 18th, 2017 Financial Post article, "Bombardier in talks with Chinese aircraft manufacturer for potential investment: report," Bombardier is allegedly in talks with the Commercial Aircraft Corporation of China, Ltd. (Comac), a state-owned aircraft maker considering either an investment in Bombardier’s aerospace division or the taking a stake in the CSeries aircraft program itself.

Comac and Bombardier’s relationship goes back some years. In 2012, the two firms signed an agreement to find commonalities between the Comac C919 and Bombardier Cseries jets to reduce training and maintenance costs. Bombardier has also advised Comac on its ARJ-21 regional jet, which went into commercial operation in 2016 after years of delays. The two companies have also considered joining forces to compete against aerospace behemoths Boeing and Airbus.

Perhaps by no coincidence, on May 18th, Boeing petitioned the US Commerce Department and the US International Trade Commission (ITC) to investigate subsidies (such as the $ 3Bln CDN bailout money from the Quebec and Federal governments) of Bombardier's CSeries aircraft that it says have allowed the company to export planes at well below cost.

As outlined in the May 18th, 2017 CBC News post, "Cross-border aircraft rivals Bombardier, Boeing clash in trade hearing," preliminary meetings on the issue are ongoing and a determination on the petition is expected by June 12th. 

Bombardier also builds trains, and as outlined in the May 13th, 2017 Toronto Star post, "How do Toronto's light rail vehicles compare? It's Bombardier versus Alstom," Bombardier is also having difficulties in this area as well. As outlined in the post, "after a protracted dispute with Bombardier about delays to its light rail vehicle order for the Eglinton Crosstown LRT, Metrolinx has taken the drastic step of placing an order for cars with another company." Photo c/o Randy Risling/ Toronto Star File Photo.

If the ITC determines there is a threat of injury to the US industry, preliminary countervailing duties could be announced in July, followed in October by preliminary anti-dumping duties, unless the deadlines are extended. Final determinations are scheduled for October and December. Boeing is calling for countervailing duties of 79.41% and anti-dumping charges of 79.82%.

Quebec Premier Couillard gesturing. Photo c/o Clement Allard / CP.
The US government’s investigation of Bombardier is the latest shot in the US’s escalating trade disputes with Canada and an ill portent for the NAFTA renegotiation triggered by US President Trump on May 18th and expected this summer.

In retaliation, and as discussed in the May 19th, 2017 St. Louis Post Dispatch post, "Boeing scrambles to save deal to sell St. Louis-made F/A-18s to Canada," the Canadian Government has announced that it will review its planned $2Bln CDN purchase of 18 Boeing Super Hornet fighters as a stop-gap measure before running a full competition to replace Canada’s aging fleet of CF-18s.

Amidst the frustration and anxiety over Bombardier’s present and future came a counterpoint from Quebec’s premier.

As outlined in the May 22nd, 2017 Presse Canadienne post, "Québec needs to take care of Bombardier, says Couillard," after visiting a Bombardier plant in Haifa, Israel, Premier Philippe Couillard stated that Quebec needs to take care of Bombardier because of its unique importance to the province.

But Boeing, as outlined in the May 23rd, 2017 post BNN post, "In Bombardier fight, Boeing sees ghost of Airbus ascent," remembers the growth of another direct competitor and is not likely to give up this time without a fight.

Will Bombardier suffer the same fate as Nortel and RIM or, like the auto industry, be deemed "to big to fail?" Stay tuned.
Brian Orlotti.

Brian Orlotti is a regular contributor to the Commercial Space blog.

Monday, May 22, 2017

Part 10: A History of the Canadian Space Program - Policies & Lessons Learned Coping with Modest Budgets

More on the 1990's, the CSA, "On-Going Budgets," a 3rd "Long-Term Space Plan," 

New Astronauts, More Satellites but Never Enough Funding

The 1999 Federal Budget. C/o fin.gc.ca.
By Graham Gibbs & W. M. ("Mac") Evans

This paper, first presented at the 65th International Astronautical Congress, which was held in Toronto, Ontario from September 29th - October 3rd, 2014, is a brief history of the Canadian space program, written by two of the major participants.

When the government established the Canadian Space Agency (CSA) in 1989 the only budget it provided was for specific programs. The second Long-Term Space Plan (LTSP II) did the same.

The CSA did not have an “on-going” budget like all other government departments and this created significant long term planning problems. This was rectified in Budget 1999 when the government provided an on-going budget of $300Mln CDN per year (approximately the level of funding for the Canadian space program in 1990).

Associated with this new method of funding was the injection of $430Mln CDN of new funding over three years to finance several new space initiatives. These initiatives were the result of the government’s approval of LTSP III which included a re-balancing of the Canadian space program.

For the first time, the earth observation activities of the CSA received the largest portion of the space budget (almost 30%) while the remaining major activity areas (human presence in space, science, satellite communications, and technology development) each received about 15%.

The 1990’s saw a flurry of activity in Canada’s space program.

The 1992 crop of Canadian astronauts included (clockwise from top left) Marc Garneau, Chris Hadfield, Bjarni Tryggvason, Steve MacLean, Mike McKay, Dave Williams, Julie Payette and Robert Thirsk. Only McKay never reached space. As outlined on his CSA bio, "he resigned as an astronaut in 1995, but remained active in the program until 1997 working on projects such as the space vision system and the robotic arms for the International Space Station. After leaving the military in 2001, McKay joined the private sector." Photo c/o CSA.

Three new astronauts were selected (Chris Hadfield, Dave Williams, and Julie Payette). There were more astronaut flights (eight) in the 1990’s than ever before or since, including Chris Hadfield’s flight to the Russian Mir space station in November 1995.

RADARSAT 1 was launched in 1995, propelling Canada into the select list of nations to have its own earth observation satellite and immediately capturing more than 15% of the world market for remote sensing data.

Mobile Satellite (MSAT) was launched providing mobile communications services across Canada and the US. Canadian scientific experiments flew on the shuttle and on the Russian space station Mir. Canada’s first instrument for interplanetary exploration was launched aboard a Japanese satellite (which unfortunately in 2003 missed Mars). Telesat (which in 1992 had become totally privatized when the government sold its shares in the company) launched two new satellites (Anik E1 and E2) and the nation’s first direct broadcast satellite (Nimiq).

To close the decade, in 1999, Canada’s Measurement of Pollution in The Troposphere (MOPPIT) science satellite was launched.

A new Space Policy Framework was adopted giving new policy direction to the Canadian space program. Canada’s participation in the International Space Station (ISS) program was re-confirmed after coming close to termination. And finally, the CSA was put on a stable, long-term (but insufficient, according to the space community) funding basis.

Graham Gibbs & Mac Evans. Photos c/o MyCanada & CSA.
Graham Gibbs represented the Canadian space program for twenty-two years, the final seven as Canada’s first counselor for (US) space affairs based at the Canadian Embassy in Washington, DC. 

He is the author of "Five Ages of Canada - A HISTORY from Our First Peoples to Confederation."

William MacDonald "Mac" Evans served as the president of the Canadian Space Agency (CSA) from November 1991 to November 2001, where he led the development of the Canadian astronaut and RADARSAT programs, negotiated Canada’s role in the International Space Station (ISS) and contributed to various international agreements that serve as the foundation of Canada’s current international space partnerships.

He currently serves on the board of directors of Vancouver, BC based UrtheCast and as a member of the Federal government Space Advisory Board.

Last Week: "The 1990's, The Second Long-Term Space Plan, SCISAT, RADARSAT-2 & 'Competitive Procurement'" in part nine of "A History of the Canadian Space Program: Policies & Lessons Learned Coping with Modest Budgets."

Next Week: "The 2000's and Beyond" as part eleven of "A History of the Canadian Space Program: Policies & Lessons Learned Coping with Modest Budgets," continues.

Thursday, May 18, 2017

Part 9: 150 Years of Canadian Aerospace History

The Canada Centre for Remote Sensing, Synthetic Aperture Radar, 

SEASAT & John Macdonald and MDA

John MacDonald in 2008. Photo AM Jackson/Globe and Mail.
          By Robert Godwin
Canada's aerospace raison d'être has always derived from its immense size, its location in the far north as a vast, barely-tracked wilderness of incalculable resources and the logical requirements relating to defence, communications, utilization and exploration which naturally follow from its size and location.

In 1966 the first really sophisticated earth observation satellite, called the Earth Resources Observation Satellite (EROS) had been announced by the US Geological Survey (USGS). The USGS sent a delegate to Ottawa where he was officially offered the use of the massive antenna in Prince Albert Saskatchewan which was no longer being used for ISIS or Alouette. In exchange for this valuable asset Canada would be allowed to read the downlink from EROS. However, EROS was cancelled due to some political machinations and replaced by NASA's ERTS (later renamed Landsat).

It subsequently took until 1969 before NASA agreed to let Canada "read" data from ERTS. John Macdonald and his team at MDA convinced Morley and other key actors in the government that they could set up a ground station for a tenth of what the US was paying for similar facilities. They didn't get the contract, but they did get to install what they called QuickLook; a system which generated an image from the ERTS data in minutes, while NASA's best efforts took four days to get the full data stream converted. On the strength of this amazing achievement MDA was hired to provide a ground station at Shoe Cove, Newfoundland in time for the next generation of advanced remote sensing.

Two photo's showing all that remains of Canada’s first satellite tracking station, in Shoe Cove, Newfoundland today, and how it looked in the late 1970's. As outlined in the December 16th, 2015 Hidden Newfoundland post, "Satellite Tracking Station in Shoe Cove," the station was one of twelve originally built under an international agreement created by the NASA in the early 1960's. As outlined in the article, "this network of stations were part of the newly formed Satellite Tracking and Data Acquisition Network (STADAN). Based out of Goddard Space Flight Centre in Greenbelt, Maryland, STADAN was made up a number of sites that were located in places such as Alaska, Great Britain, Australia and Africa. Each site had the capabilities to track and acquire location data from a number of satellites that were orbiting the earth." In 1977 a second facility, was constructed at this location by the CCRS to collect recorded data from three specific satellites; Landsat II, Landsat III, and a National Oceanographic and Atmosphere Administration (NOAA) monitor satellite. Photo's c/o Hidden Newfoundland.

In February 1971 Morley had finally gained approval to establish a Federal remote sensing group which became known as the Canada Centre for Remote Sensing (CCRS). This group issued a string of reports including a revolutionary one by Phil Lapp entitled "Observables and Parameters of Remote Sensing." In three dozen pages Lapp spelled out how remote sensing could be efficiently applied to daily life in Canada.

But remote sensing was still primarily a process carried out by aircraft. The Canadian Air Force had willingly offered up several aircraft, including CF-100 fighters and DC-3s, to be used for aerial remote sensing. It was important to test experimental sensors in aircraft before even contemplating the huge expense of sending them into space.

Around this time Kurt Stehling wrote an article in Space/Aeronautics magazine entitled "Spotting Pollution from Space." In his usually adept way Stehling spelled out the problem in plain language:
The answer lies in larger aircraft, capable of flying at higher altitudes, or...in spacecraft complemented by aircraft. For not only would aircraft supplement satellite observations and aid in photo interpretation—always a difficult problem—but they would be used whenever clouds obscured the earth's surface or whenever sudden, highly localized pollution required immediate observation. In addition, they would serve as flying test beds in the development of new and improved spacecraft sensors.
The payload capacity of the planes available to Morley through normal channels was insufficient and so through some hard bargaining CCRS purchased a Convair 580. This purchase then opened the door to some cross-border cooperation.

The technique which was about to change everything was synthetic aperture radar (SAR) and if deployed on-board a satellite it promised to completely revolutionize the art of map-making and resource prospecting. It would overcome all of the issues with simple microwave radar in space which Stehling had outlined years earlier. Most importantly it would allow the government to understand the true geophysical and geopolitical nature of the under-populated and vast country named Canada. A company in Michigan which had been involved in early development of the technology owned an SAR system but they didn't have an aircraft large enough to use it. They made a deal with the CCRS to share their resources.

By this time Stehling had moved over to the American National Oceanic and Atmospheric Administration (NOAA). He had now fully refined his original idea from 1953 and through his role advising Vice President Hubert Humphrey he had proposed putting SAR on a science satellite and using it to map the world's oceans and coastlines. If this could be accomplished the whole problem of using only aircraft to monitor Canada's remote coastlines would be solved. This would have repercussions across all aspects of Canadian aerospace including the huge problem of which aircraft the country needed for defence. The first SAR science satellite was to be called Seasat and it would carry all of the instruments Stehling had proposed in 1968.

Meanwhile, since the early moon landings had been so successful, it was time to do some science aboard more sophisticated versions of Apollo, and that meant not wasting a single opportunity. The same kind of data that Phil Lapp had been seeking 20 years earlier while flying over northern Ontario was now going to be gathered from lunar orbit.

 The Lunar Mapping and Panoramic Cameras were mounted in the forward portion of the Apollo Scientific Instrument Module (SIM) in bay 1 of the Service Module on Apollo 'J' missions on Apollo 15 to 17. Graphic c/o Apollo Flight Journal

The so-called "J" Missions would include an experiments payload bay in the Apollo Service Module.

At the very base of this bay two STEM were installed; one to carry a Gamma-Ray Spectrometer and the other for a Mass Spectrometer. Each would be extended more than 20 feet out into space and the data they would record would be synchronized with a panoramic camera, a mapping camera and a laser altimeter. The resulting data would forever alter our understanding of the moon.

In 1971, while the first J Mission was flying over the lunar surface, MDA was given its first contract to install electronics at the space ground station in Prince Albert Saskatchewan. The Prince Albert Facility had originally been set up in 1959 as a joint project of the United States and Canada. The 84 foot diameter radar dish had been installed because it was believed that the aurora could mask the approach of incoming warheads. It was also believed that the aurora could interfere with communications with any ABM system.

The location of the $10Mln CDN facility about 15km west of Prince Albert had been a boon for the district, which perhaps not entirely coincidentally happened to be the home riding of then Prime Minister Diefenbaker.

When MDA were invited to install their first system it was to coincide with the data coming down from the first ERTS (Landsat) satellite. Prince Albert had evolved from an experimental ABM facility to a satellite down-link, and was now to become an integral part of Canada's resource monitoring.
Robert Godwin.

Robert Godwin is the owner and founder of Apogee Space Books, the Space Curator at the Canadian Air & Space Museum and an American Astronautical Society History Committee Member.
He has written or edited over 100 books including the award winning series "The NASA Mission Reports" and appeared on dozens of radio and television programs in Canada, the USA and England as an expert not only on space exploration but also on music.  
His books have been discussed on CNN, the CBC, the BBC and CBS 60 Minutes. He produced the first ever virtual reality panoramas of the Apollo lunar surface photography and the first multi-camera angle movie of the Apollo 11 moonwalk. His latest book was written with the late Frederick I Ordway III and is called "2001 The Heritage and Legacy of the Space Odyssey" about the history of spaceflight at the movies.
Last Week, "Stehling, Maynard, the Lunar Excursion Module, Gerald Bull, James Chamberlin & Phil Lapp,'" in part eight of "150 Years of Canadian Aerospace History."

Next Week, "MDA Rises While Spar Falls," as part ten of "150 Years of Canadian Aerospace History" continues.

On sale now, at Apogee Books.

Monday, May 15, 2017

Space Advisory Board Meets Tomorrow, and Tomorrow and Tomorrow

          By Brian Orlotti

The notes from the first and the second Canadian Space Advisory Board (SAB) Roundtables on Canada's Future in Space, held on April 21st in Ottawa and April 28th in Halifax, have now been posted online.

A friendly reminder that rocket science very rarely has anything to do with politics (or media production). Image c/o @Cmdr_Hadfield.

At first blush, the SAB, rather than seizing the opportunity to restructure Canada’s space efforts in accord with new global realities, has simply opted for the status quo with some added drum-banging for further funding.

Notable excerpts from the SAB notes include a variety of interesting, but generally vague comments, which certainly benefit from the appropriate unpacking. For example:
In an era of fast technological advances and dynamic business models, there is no one size fits all solution.
There is a new business model emerging – often referred to as New Space – that is transformative and government policies and regulations need to adapt to this reality in order to support growth in the sector. 
It may be important to ensure that the Government is equipped to find solutions and has more modern tools (public private partnerships, purchasing services as opposed to assets)
  • This comment, from the April 21st Ottawa meeting, while acknowledging the existence of the NewSpace industry, provides little in the way of exploration of the private-sector funding mechanisms such as the Space Angels Network or Globalive Capital which could enable the Canadian space industry to operate more independently of government.
Globalive Capital, a tech angel investment firm founded in 2013 by Canadian telecom entrepreneur Tony Lacavera, has helped finance at least two Canadian NewSpace companies; Toronto, ON based Kepler Communications and Vancouver, BC based UrtheCast.  
Tony Lacavera at the MaRS Discovery District in January 2017. As outlined in the February 3rd, 2017 Mobile Syrop post, "Tony Lacavera shares the story of building and selling Wind Mobile," the core concept of entrepreneurship is the understanding and acceptance of risk. Photo c/o Mobile Syrup.  
As stated previously in the January 16th, 2017 post, "Quantum Computing Is Real; A Canadian Company Now Offers Open-Source Tools & the Chinese are Building Spacecraft," Lacavera has publicly stated his view that Canada has the potential to become a world leader in such fields as artificial intelligence, fintech, machine-learning, autonomous vehicles, and quantum computing, though its institutions must step up their efforts to do so.  
Lacavera also said that Canada’s efforts must go beyond mere presentations and broad allocations of resources; Canada must narrow its actions and focus  specifically on areas where it can win. 
A focus on developing homegrown launch vehicles, for example, would reduce the time-to-market for Canadian space products and services, protect Canada’s space industry from other nations’ punitive trade actions, and place Canada on a more competitive footing vis-a-vis emerging space powers such as China and India.
Canada is viewed as a reliable international partner; re-affirming or affirming international engagement is important for continued long term success. In addition, while collaborating with traditional international partners (NASA, ESA) remains important, there may be greater opportunities with non-traditional and new space faring nations. 
  • This comment, also from the April 21st Ottawa meeting, allows the SAB to reaffirm Canada’s traditional role as a supplier of components and systems for other nations’ space projects. 
Although the rise of new space-faring nations (i.e. China & India) is acknowledged, the SAB avoids mentioning their specific homegrown capabilities, which include domestic launch vehicles. Those indigenous capabilities (rather than the mere ability to manufacture "components") are what facilitate the independent actions these states currently enjoy.
This lack of interest in expanding Canadian space capability also seems rather myopic in light of the current political upheavals in Europe, rapidly expanding Chinese space efforts and trade-related punitive actions taken (and threatened) against both Canada and Mexico by the US’ ultra-nationalist, protectionist Donald Trump administration. 
Aerospace Industries Association of Canada (AIAC) Executive VP Iain Christie discussing the AIAC's perception of what a "balanced" space program would be like at the 2016 Space Policy Symposium, which was held in Ottawa on November 8th, 2016. As outlined in the November 22nd, 2016 SpaceQ post, "A Balanced Space Program from the 2016 Space Policy Symposium," the AIAC presentation focused on complaints about the lack of "a long term plan or vision for what Canada will be doing in space," plus concern for space companies "that rely in-part on government programs" and are “rapidly running out of short term money with no new significant programs being created." Evidently, asking for more money for the existing players is "balanced." Photo c/o SpaceQ.
There is the need for a balanced space program and for a range of activities – flagship programs (e.g. International Space Station), smaller mission activities, science, technology development and capability demonstration - necessary to provide critical flight heritage while sustaining and maintain talent/capabilities in the Canadian space sector. 
Dedicated funding to support new space activities help to grow the sector – many space firms have been created, or established through government programs, which provide important seed money...
This statement, also from the April 21st Ottawa meeting, and apart from the dubiousness of phrases like ‘balanced space program’ (which seems to suggest a hope for continued Canadian Space Agency "dominance" of the domestic space industry and the expectation of the existing players that they will continue to be funded), contains a curious error of omission 
The oversight is NASA’s stated intention to sell the ISS to the private sector by the mid-2020’s. 
As outlined in the March 23rd, 2017 Wired post, " Somebody Just Buy the ISS Already," the International Space Station (ISS) is a $70Bln US ($95Bln CDN) engineering marvel that "no one has any idea what to do with." According to the article, "spending $3 billion to $4 billion annually to keep the ISS running conflicts with NASA’s other ambitions, like visiting Mars."
Touting the ISS as a “flagship program” in which Canada should continue the status quo when NASA itself is willing to let private industry take control and move on to other challenges would seem a non sequitur at best and deceitful at worst.
There is considerable optimism and excitement regarding plans for a spaceport in the Province of Nova Scotia. 
Developing Canadian launch capabilities may provide new opportunities for economic and regional development (e.g. , jobs creation, skills and talent hub); increased access to space to deploy technologies in space; and public interest and support for the Canadian space program.
This statement, from the April 28th, 2017 Halifax meeting, refers to Maritime Launch Services’ (MLS) thus far unfunded effort to construct a commercial launch facility for Ukrainian-built Cyclone-4M rockets in Nova Scotia. MLS is essentially acting as a local agent for Ukraine-based Yuzhnoye Design Office, which had originally designed the Cyclone-4M rocket for Brazil and requires at least $100Mln CDN in cash or credits to fund any NS based facility.  
As outlined most recently in the February 6th, 2017 post, "Europe Will Fund the Prometheus Reusable Engine; Canada Pitched Cyclone-4's," the Cyclone rockets use hypergolic engines--a system in which two components (a fuel and an oxidizer) spontaneously ignite when brought into contact with each other, producing thrust. 
Once used extensively in both US and Soviet ICBMs, hypergolic engines were eventually replaced in both nations’ arsenals by solid-fuel systems. Although simple and reliable, hypergolic engines pose difficulties due to the extreme toxicity and corrosive nature of their fuels. 
Because of this, Western rocketry has largely moved away from hypergolic systems and towards higher performance liquid hydrogen/oxygen engines. 
It is a sad state of affairs indeed for Canada’s space efforts when, in an age of $5Mln US ($6.8Mln CDN) 3D-printed rockets (such as those now being made by California based Rocket Lab), hope is being placed in a company of doubtful financing flogging toxic 1970’s Soviet technology. 
Canada, the third nation on Earth to place a satellite in orbit and a pioneer of robotic, radar and lidar technologies, should demand better of itself

The first SAB Roundtable on Canada's Future in Space, held on April 21st in Ottawa, was hosted by SAB chair Marie Lucy Stojak, William MacDonald ‘Mac' Evans, and Michael Pley.

Attendees included Al Conrad (IMP Aerospace), Arthur Ruff (ISRU Tech Inc.), Sarah Goldfeder (Earnscliffe Strategy Group), Chris Kitzan (Canada Aviation and Space Museum), Christopher Dodd (Airbus Defence & Space Canada, Inc.), Daniel Goldberg (Telesat), David McCabe (Honeywell Aerospace), Eric Choi (Magellan Aerospace), Eva-Jane Lark (BMO Nesbitt Burns Midland Doherty Ltd.), Geoffrey Languedoc (Canadian Aeronautics and Space Institute), Iain Christie (AIAC), Ian Scott (Telesat), Jason Palidwar (Iridian Spectral Technologies), Jim Quick (AIAC), John Detombe (ADGA Group), Larisa Beach (Neptec Design Group Ltd.), Leslie Swartman (MacDonald Dettwiler), Lori M. Wickert (Newmont Mining Corporation), Matt Ivis (MacDonald Dettwiler), Rick Pitre (Terizons Consulting Inc.), Robert A. “Bob” Ryerson (Kim Geomatics Corporation), Ryan Alan Anderson (QShift) and Stewart Bain (NorStar Space Data).

The second SAB Roundtable on Canada's Future in Space, held on April 28th in Halifax, was hosted by Jim Drummond and Gordon Osinski.

Attendees included Bradley Farquhar (Space Generation Advisory Council), Carl Kumpic (IMP Aerospace and Defence), Desmond Power (C-CORE), Duncan McSporran (Consortium for Aerospace Research and Innovation in Canada), Harvey Doane (Nova Scotia Business Inc.), Howard Moyst (AIME Consulting Inc.), Jeff Burlock (Xplornet Communication Inc.), Luigi Gallo (St. Mary's University, Department of Astronomy and Physics), Monique Arsenault (Nova Scotia Government), Penny Morrill (Memorial University of Newfoundland, Faculty of Sciences—Earth Sciences), Rich Billiard (Atlantic Alliance of Aerospace and Defense Associations), Rob Thacker (St. Mary's University, Department of Astronomy and Physics) and Stephen Matier (Maritime Launch Services).

The SAB Roundtable is winding up its formal, semi-public meetings over the next few days, but will continue to meet at undisclosed locations and by invitation only, in preparation for the expected release of their proposal for the Canadian space industry sometime this summer.

Tomorrow, and tomorrow, and tomorrow...
Brian Orlotti.

Brian Orlotti is a regular contributor to the Commercial Space blog.

Part 9: A History of the Canadian Space Program - Policies & Lessons Learned Coping with Modest Budgets

The 1990's, The Second Long-Term Space Plan, SCISAT, RADARSAT-2 & "Competitive Procurement"

The John H. Chapman Space Centre, completed in 1992. Photo c/o Treasury Board.
By Graham Gibbs & W. M. ("Mac") Evans

This paper, first presented at the 65th International Astronautical Congress, which was held in Toronto, Ontario from September 29th - October 3rd, 2014, is a brief history of the Canadian space program, written by two of the major participants.

Recognizing that the Canadian government's investment in space was going to start dropping rapidly in 1994 with the wind down of three major CSA programs, Mobile Satellite (MSAT), RADARSAT and the International Space Station (ISS), the CSA commenced planning for the next long-term space plan. Extensive consultations were held with interest groups across the country and by 1993 the CSA had developed an aggressive set of program proposals for consideration by the government. 

However, in 1993 a new government was elected that embarked on a comprehensive government wide expenditure reduction program and the CSA’s proposals never reached the Cabinet table. In its first budget in February 1994 the new government announced its intention to develop a new long-term space plan (LTSP II) and allocated $800Mln CDN of new funds for the ten year period from 1994/95 to 2003/04.

The government was extremely concerned about the rising costs for Canada’s participation in the ISS program and decided to “negotiate an orderly reduction in Canada’s current commitments to the International Space Station Program.” The government also stated, that if a satisfactory new role for Canada in the program could be negotiated, it would allocate an additional $200Mln CDN for this purpose.

Then Prime Minister Jean Chrétien with Paul Martin, his long-term Finance Minister in 1997. The 1994 Federal budget wasn't just important for Canada's space efforts. As outlined in the November 11th, 2011 Economy Watch post, "How Did Canada Turn Its Debt Crisis Around In 6 Years, 20 Years Ago?," Canada's budget had included large annual deficits since the 1960's and was widely regarded by the early 1990's as the next nation expected to default on outstanding loans. But quick action, in the form of a multi-year deficit reduction programme initiated by the incoming Chrétien government, balanced the budget and restored Canada's international credit. Photo c/o Fred Chartrand/Canadian Press.

The 1994 Budget marked a distinct change in the government’s approach to space. Prior to this budget, space program proposals were submitted to the government, and if approved, new funds to implement the program would be made available. With the 1994 budget, the government first established the amount of money that it would make available for space and then asked the CSA to develop a plan within the allocated resources. For the first time, the government established a “space envelope.”

For the next three months, an extensive series of concurrent negotiations took place with NASA regarding the ISS and with the Canadian space community regarding LTSP II. A wide-ranging agreement was reached with NASA for “Enhanced Cooperation in Space Between NASA and CSA” that reduced the final costs of Canada’s space station participation by $759Mln CDN without affecting our commitment to provide ISS robotics. The agreement also provided for one Canadian astronaut launch per year, obtained NASA’s participation in RADARSAT 2, and confirmed NASA’s participation in Canada’s SciSat program.

In June 1994, the Minister of Industry, John Manley announced LTSP II, the most comprehensive space plan in Canadian history with more than $1Bln CDN of new program initiatives.

Included in the plan were: RADARSAT 2, a follow-on to the already approved RADARSAT 1 satellite; an advanced satellite communications program that eventually resulted in an experimental payload for the next generation of Telesat satellites; a substantial increase in the space science program, including SciSat, Canada’s first science satellite since ISIS II in 1972; and augmentation of the CSA’s technology development program.

LTSP II also included a new “Space Policy Framework” approved by the government. The framework instructed the CSA to design programming “to lever the maximum possible funding from other interested parties, including the industry and the provinces.” This requirement formed the underlying principle for the agreements with Telesat on the experimental payload for Anik F2 and the agreement with Macdonald Dettwiler (MDA) for RADARSAT 2.

The current impact of the Canadian space sector in 2013 as per the March 27th, 2015 Euroconsult Report on the "Comprehensive Socio-Economic Impact Assessment of the Canadian Space Sector." Graphic c/o Euroconsult & CSA. 

The framework directed that the “implementation of the Canadian Space Program seek to foster an internationally competitive, export-oriented Canadian space equipment and services sector, open to a growing number of firms, often small and medium-sized enterprises.” This latter requirement effectively put an end to the Prime Contractor policy adopted in the late 1970’s and paved the way for a competitive procurement process for RADARSAT 2 (the first ever competitive procurement for a major government space program).

The framework also noted that the government deems space to be “essential to protect national security and to enhance Canada’s sovereignty in the new political and economic world order” and indicated its desire to see that “a growing degree of synergy will be promoted between civil and non-aggressive defence space activities with a view to contributing to world peace and security… ”. This requirement led to the establishment of liaison offices at Department of National Defence (DND) and CSA and a memorandum of understanding (MOU) outlining cooperation between the two departments.

Finally, the framework indicated the government’s expectation that Federal Departments will “take advantage of the opportunities provided by space- based technology and services to improve their short and long-term efficiency and effectiveness in meeting their mission objectives and will work with the CSA to maximize the degree to which these needs can be met from cost-competitive domestic sources.” 

This requirement provided the underlying policy for the program initiatives that the CSA was then promoting.

Graham Gibbs & Mac Evans. Photos c/o MyCanada & CSA.
Graham Gibbs represented the Canadian space program for twenty-two years, the final seven as Canada’s first counselor for (US) space affairs based at the Canadian Embassy in Washington, DC. 

He is the author of "Five Ages of Canada - A HISTORY from Our First Peoples to Confederation."

William MacDonald "Mac" Evans served as the president of the Canadian Space Agency (CSA) from November 1991 to November 2001, where he led the development of the Canadian astronaut and RADARSAT programs, negotiated Canada’s role in the International Space Station (ISS) and contributed to various international agreements that serve as the foundation of Canada’s current international space partnerships.

He currently serves on the board of directors of Vancouver, BC based UrtheCast and as a member of the Federal government Space Advisory Board.

Last Week: "Long-Term Space Plan I, a National Space Agency, RADARSAT, Centralization and the Dramatic Increase in Government Space Expenditures," in part eight of "A History of the Canadian Space Program: Policies & Lessons Learned Coping with Modest Budgets."

Next Week: "More on the 1990's, the CSA, "On-Going Budgets," a 3rd "Long-Term Space Plan," 
New Astronauts, More Satellites but Never Enough Funding," as part ten of "A History of the Canadian Space Program: Policies & Lessons Learned Coping with Modest Budgets," continues.

Thursday, May 11, 2017

CATAAlliance Calls for Adaption of the US Small Business Innovation Research (SBIR) Program

          By Chuck Black

The Canadian Advanced Technology Alliance (CATAAlliance), has called for the adaption of the US developed Small Business Innovation Research (SBIR) grant program, often used to fund small space focused start-ups, as a way to encourage and grow Canadian innovation.

To see the complete video, please click on the graphic above. Graphic c/o CATAAlliance.

As outlined in the May 8th, 2017 CATAAlliance press release, "A proven model for the creation of Innovative Solutions Canada," the organization cited the intent of the Federal government under Prime Minister Justin Trudeau to "provide up to $50 million, starting in 2017–18, to launch a new procurement program, Innovative Solutions Canada, modeled on the very successful US Small Business Innovation Research (SBIR) program.”

But the press release also noted that the SBIR program, as structured in the US, is funded through mandatory set-asides of departmental funds. As outlined in the press release, the US Small Business Administration (SBA) ensures that participants in the program dedicate 3.2% of their total budgets towards the SBIR program, plus an additional “set- aside” (approximately 23% in the US) for use to procure any developed goods and services from the SBIR small businesses, as required.

As outlined in the CATAAlliance press release, "the intent now is to ensure our government incorporates BOTH of these into the final legislation," to insure appropriate funding." The press release noted that the Ontario provincial Health Technologies Fund, is also based on the US SBIR model.

As outlined on the Federal Government Buy and Sell procurement website under the title, "Decision to Set Aside a Procurement under the Procurement Strategy for Aboriginal Business," this is a process fully understood by the Federal government, at least within Indigenous and Northern Affairs Canada (INAC), where INAC frequently acts as the first customer and reference site for new products.

NASA Hallmark videos feature companies and successful technologies developed through NASA's SBIR and small business technology transfer (STTR) programs. To see a sampling of the videos, simply click on the links. Image c/o NASA.  

The Canadian Space Agency (CSA) has always had difficulties wrapping its head around the concept of SBIR programs and the idea of assisting small business to grow and compete with larger, more established firms.

As outlined as far back as the July 19th, 2009 post, "Canadian Space Agency Provides "No Dedicated Programs" to Support Small Aerospace Firms," it was noted that "when compared to organizations like the National Aeronautics and Space Administration (NASA), the National Oceanic and Atmospheric Administration (NOAA), the European Space Agency (ESA) and others, the Canadian Space Agency (CSA) has 'no dedicated programs for small business.'"

Instead, and as outlined in a variety of historical articles on this blog, the Canadian government has focused on "capacity building" or building up one or two large domestic firms like Spar Aerospace, Bombardier, Nortel or MacDonald Dettwiler (MDA) into powerhouses capable of competing against large foreign firms in international markets.

Of course, mostly that doesn't work. It's hard to pick winners at the best of times. Spar and Nortel are dead and Bombardier and MDA are undergoing their own challenges.

Perhaps the Federal government will try something a little more inclusive this time. Something like the SBIR program.
Chuck Black.

Chuck Black is the editor of the Commercial Space blog.

Monday, May 08, 2017

Steve MacLean's 2010 Long-Term Space Plan Surfaces, CSA Clarifies its Communications Policy & California's Rocket Tax

          By Henry Stewart

For the week of May 8th, 2017, here are a few of the stories we're currently tracking for the Commercial Space blog:

Former CSA president Steve MacLean in 2010 alongside the front cover of his 2010 "Long-Term Space Plan for Canada." Photo c/o Canadian Press and Gordon Group.

  • A never released Long-Term Space Plan (LTSP), created by then Canadian Space Agency (CSA) president Steve MacLean as part of his 2008 hiring mandate under then Conservative Industry Minister Jim Prentice, seems to have surfaced in the most peculiar of places. 
An Ottawa, Ontario based marketing and communications company called the Gordon Group, has claimed credit for its design and layout, and even posted portions of the plan on its website. 
Gordon Group website on May 8th, 2017. Screenshot c/o Author.
As outlined on the Gordon Group CSA promotional page, the CSA "has worked with Gordon Group over many years to produce a variety of reports, such as the COSPAR reports for 1998-99, 2004-05 and 2010."
"Most recently, Gordon Group designed, edited, laid out and produced the 72-page report called A Long-term Space Plan for Canada, which was submitted to the Government of Canada by Dr. Steve MacLean, President of the Canadian Space Agency."
According to the website, the Gordon Group, "designed a cover that shows a satellite view of Canada from space and grid lines that represent tangible evidence of the agency’s strategy and plans for Canada’s involvement in spaceThe blue tones of the cover design reflect the colour of space and tie in with the CSA logo. 
The promotion continues, "the inside design deliberately uses a lot of white space for a clean and crisp look. The angled lines in the keyline are reflected in the photo cropping, giving a subtle forward-looking feel. Pull quotes emphasize content and provide visual interest." 
For a bit of background on the last astronaut to head the CSA and his original mandate, check out the  January 19th, 2013 post, "Praising Steve MacLean." Screenshot c/o Author.  

Given that MacLean's report is currently being used as a sales aid for a marketing company, it seems appropriate for the current Federal government under Liberal Prime Minister Justin Trudeau to formally release the full seventy-two page document to the public.
As outlined in the April 20th, 2017 post, "Space Advisory Committee Members Announced: Various Stakeholders Release Independent Assessments, Just in Case," there are many in both government and the private sector assessing and collecting much the same data originally collected by MacLean, who could make far better use of MacLean's document than is currently the case.
As outlined in the post, several clauses in standard CSA contracts make it essentially impossible for CSA subcontractors to talk to the public without the formal approval of the CSA Directorate of Communications.
According to CSA senior communications advisor Magalie Renaud, who communicated with this blog via e-mail:
"The intention of this clause is to leverage resources by encouraging coordination of communication efforts between the CSA and contractors (for example: hold a joint announcement, develop a blog about the company promoted on our social media platforms). Our aim is also to encourage the sharing of information so we can support industry partners, especially the smaller firms that don’t have the resources to dedicate to promoting their work. This clause is not meant to prevent companies from communicating with the media or the public.

That being said, the clause was drafted several years ago and we are in the process of reviewing it. It will better reflect the CSA’s intention to encourage coordination and the sharing of information so we can highlight successes and leverage resources."
To be fair, the latest e-mail reflects at least the intention to "leverage resources" along with the acceptance that the current CSA regulations could be improved. Maybe one day, the CSA will figure out that free and open discussion without constraints (ie. "peer review") is the essence of the scientific method.
Just don't hold your breath in anticipation.
  • California wants to tax rocket launches.
As outlined in the May 6th, 2017 Quartz post, "California’s plan to tax rockets by the mile is exactly what space companies want," the California state legislature has come up with a plan to tax rocket companies, based on "how often they fly the 62 miles (100 km) from a California launchpad to the very edge of space while transporting goods or tourists."
As outlined in the article, "the proposal comes as the state’s technology sector ploughs increasing amounts of money into aerospace start-ups, and homegrown company SpaceX asserts itself as the leader in low-cost space access. California is home to highly skilled aerospace engineers and technicians, thanks to the long presence of companies like Boeing and Lockheed Martin, as well as research centers like Caltech’s Jet Propulsion Lab and NASA’s Ames research center."
The proposed rocket tax will apply mainly to just two companies (SpaceX and ULA), at least initially.  But, as outlined in the article, Virgin Galactic will also be taxed when it ramps up its operations.
All three companies have backed the new tax rule in meetings with the California government, according to government records and sources familiar with the matter, because the change would clarify their tax status.
For more, check out our upcoming stories in the Commercial Space blog or recommend stories for our various aggregation feeds by tweeting #CANSpace.

Henry Stewart is the pseudonym of a Toronto based aerospace writer.

MDA Restructures For DARPA & Competition, Cuts US Workforce but Anticipates New Orders in Weak Q1 2017 Report

          By Brian Orlotti

Richmond, BC based MacDonald Dettwiler (MDA) has reported lackluster financial results, highlighting both declining revenues in its traditional line of business, but expects at least some upside from the upcoming acquisition of Colorado based DigitalGlobe and future US government contracts related to the Defense Advanced Research Project Agency (DARPA) Robotic Servicing of Geosynchronous Satellites (RSGS) program.

MDA CEO Lance and his Q1 2017 report. MDA’s condensed consolidated financial statements and management’s discussion and analysis (MD&A) for the three months ended March 31, 2017 are available online under the title, "MacDonald, Dettwiler and Associates Ltd. First Quarter Report 2017 for the Three Months Ended March 31, 2017." For a complete transcript of the Q1 conference call, check out the May 2nd, 2017 Seeking Alpha post, "MacDonald, Dettwiler & Associates' (MDDWF) CEO Howard Lance on Q1 2017 Results - Earnings Call Transcript."  Photo & graphic c/o MDA.

But MDA CEO Howard Lance, speaking during the May 2nd, 2017 quarterly conference call, also reiterated his intention to form a new, US based company, to manage contracts related to the DARPA RSGS program.

These contracts are currently managed by Palo Alto California based Space Systems Loral (SSL), an MDA subsidiary.

The new firm will be US based and MDA will not be the majority owner. The new firm will also hold title to the technology used in the US contracts and will distribute RADARSAT-2 data relating to "maritime surveillance and the detection of illegal unreported and unregulated fishing vessels in remote regions."

As outlined in the December 16th, 2016 post, "MDA says No Sale of Canadarm Technology to the US Government in NASA RESTORE-L, DARPA RSGS or "Any Other" Project," MDA spokespeople have gone on record as insisting that no Canadian technology has been used in US contracts.

MDA ten day performance quote covering the period from April 25th - May 2nd, 2017. As outlined in the May 8th, 2017 Globe and Mail Globe Investor website, "MacDonald Dettwiler and Associates Ltd is up today by $0.43 or 0.66% to $66.06. Shares have lost 0.91% over the last five days, but are unchanged over the last year to date. This security has under-performed the S&P TSX by 39.92% during the last year." Graphic c/o Globe and Mail Investor.

As outlined in the May 2nd, 2017 MDA press release, "MDA reports first quarter 2017 results," MDA’s communications satellite division has reported the following results for the first quarter of 2017:
  • Consolidated revenues of $494.3Mln CDN, down from $562.4Mln CDN for the same period last year, with the communications segment contributing revenues of $332.0Mln CDN, down from $403.2Mln CDN for the same period of last year. According to the press release, the drop reflected "lower geostationary communications satellite bookings over the past two years."
  • Operating earnings were $44.9Mln CDN, or $1.23 per share, down from $55.9Mln CDN, or $1.53 per share, for the first quarter of 2016. As outlined in the press release, the decrease "reflected lower operating EBITDA, as well as higher corporate expense, additional non-cash interest expense following the securitization of orbital receivables and a higher effective income tax rate on operating earnings."
  • Net earnings under International Financial Reporting Standards (IFRS) for the first quarter of 2017 were $5.9Mln CDN, down from $40.7Mln CDN for the same period of last year. As outlined in the press release, "net earnings were impacted by the inclusion and variability of certain large, non-operational items, particularly restructuring costs and incremental legal and other professional fees related to the acquisition of DigitalGlobe, Inc."
  • The company had total funded order backlog of $2.0Bln CDN as of March 31st, 2017, as compared to $2.5Bln CDN for the same period last year. 
  • The communications segment contributed operating EBITDA of $50.5Mln CDN compared to $59.5Mln CDN for the same period last year. 
  • The surveillance and intelligence segment contributed operating EBITDA of $38.6Mln CDN, a slight rise from last years $37.7Mln CDN, and perhaps the only bright spot in the report. The division also reported a 2% increase in revenue, to $162.4Mln CDN.
  • The company was still able to declare a quarterly dividend of $0.37 CDN per common share, which will be payable on June 30th, 2017 to "shareholders of record at the close of business on June 15, 2017."

Also on the upside, CEO Lance  anticipates orders for 12-16 geostationary-orbit telecommunications satellites in 2017 (13 were sold in 2016). However, with only one order booked thus far, MDA subsidiary SSL faces an uphill battle for US government telecom contract work against entrenched competitors including Thales Alenia Space, Airbus Defence and Space and Mitsubishi Electric.

Lance indicated that the company is reducing staff at Palo Alto, California-based SSL in the face of this market downturn although no similar layoffs have so far been announced in Canada. Canadian government work relating to the RADARSAT Constellation Mission (RCM) is slowly winding down but Lance did promise several potential, if undefined, Canadian initiatives over the coming months.

MDA has asserted that its $3.1Bln CDN purchase of US-based satellite imagery provider DigitalGlobe (currently in progress), which has a growing surveillance and intelligence business, should aid its bottom line next quarter. Lance noted that, once the DigitalGlobe acquisition is complete, telecommunications satellites will account for no more than about 15% of MDA’s total EBITDA. The sale is expected to close sometime in the second half of 2017.

Lance also tried to convince investors that the telecom satellite downturn is a result of satellite fleet operators’ “confusion” about the future direction of the industry. The market’s attention has been split between stand-alone high-throughput telecom satellites (SSL’s speciality) and large constellations of small telecom satellites (like that being built by newcomer SpaceX).

For example, on May 3rd, Hawthorne, CA based SpaceX, during a hearing of the US Senate’s Commerce Committee, detailed its plan to launch a constellation of 4,425 custom-built broadband satellites using Falcon 9 rockets beginning in 2019, deploying in phases until reaching full capacity in 2024.

As outlined in the May 8th, 2017 Phy.org post, "SpaceX details plans to launch thousands of internet satellites," the satellites will operate at altitudes ranging from 1,110km to 1,325km. SpaceX has also proposed an additional 7,500 satellites operating even closer to the ground, claiming this will boost capacity and reduce latency in heavily populated areas. However, no specific timelines have been given for this part of the project.

SpaceX's satellites will essentially operate as a mesh network and will beam directly to gateway stations and terminals at customers' homes, a strategy intended to greatly reduce the amount of ground-based infrastructure needed, particularly in rural and remote areas. Gigabit per second speeds are being promised, with different bandwidth packages being offered at various prices. Promised latencies of between 25 and 35ms would put the SpaceX network on par with terrestrial broadband connections as well as outdo traditional satellite  internet providers (600ms or greater).

Despite its effective exit from Canada, success in the US continues to elude MDA. The shifting terrain of the satellite industry will require adaptability from incumbents and newcomers alike.
Brian Orlotti.

Brian Orlotti is a regular contributor to the Commercial Space blog.

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