MDA Makes a Forceful Point at Pre-Budget 2019 Finance Committee Meeting

Mike Greenley and the new MDA are no longer content to quietly roam the halls of power in Ottawa to make their point. This new MDA is in your face, public, and fighting for its business and for a supply chain of smaller companies. On October 4th as part of the Pre-Budget Consultations for the 2019 Budget, the Finance Committee took its meeting on the road to Oshawa where MDA made its presentation. And while MDA's prepared statement and its recent actions are hitting hard at making their case to government, it missed an opportunity to serve the wider community during the Q&A portion of its time before the committee. It's a small quibble in the greater picture, but I make it nonetheless. But first let's examine what MDA wants. In its brief to the Finance Committee MDA made the following recommendations. All of these recommendations are touched on in MDA's prepared statement below and address the communities desires and MDA's specific request. Recommendation 1: That, consistent with the report of the Space Advisory Board, the government recognize space as a national strategic asset and a key contributor to Canada’s competitiveness today and in the new space economy. This recommendation is agreed on by all in the community. It is also something other nations have stated and acted upon with others planning to follow suit. Space is pervasive in the everyday lives of Canadians and must be recognized for not only the benefit to Canadians, but critical in maintaining our security and economy. The government should include this in Canada's Long-Term Space Plan (LTSP) 3. Recommendation 2: That the government develop a long-term space plan for Canada that establishes the requisite funding to maintain our existing world leadership in satellite communications, robotics, Earth observation and space science; cultivate new areas of leadership; and position Canada to be competitive in the new space economy. That Canada has no current LTSP is economic suicide and shows a lack of understanding of how pervasive space is in our lives today and without understanding how much more it will change our lives in the coming decades. And a LTSP is not just about dollars, it's focus is policy followed by dollars to enact those policies in the long term. The last Long-Term Space Plan enacted was in 1994. That's 24 years ago! Recommendation 3: That, as an important first pillar of Canada’s long-term space plan, the government announce a commitment in Budget 2019 (at the latest – time is running out) to provide a third generation Canadarm to the international space community’s next big exploration mission, the Gateway project. This is not merely an MDA wish. The International Space Exploration Coordination Group, which is made up of 14 national space agencies, has been for years laying the groundwork for what's next after the International Space Station (ISS). That vision centres around the moon and Mars with the now U.S. led Lunar Orbital Platform-Gateway (LOP-G) as the leading project. Nations are currently making the decision if they will participate in the LOP-G and at what financial commitment level. The U.S. is hoping, heck, literally banking on Canada's participation, to help defray some of the cost. It's a mega project akin to the International Space Station. Who will step up, contribute and benefit? The pressure is on for Canada and other nations to sign on by the end of the year. In examining the areas of what Canada can contribute to, it's clear there are at least three areas we're interested in. Robotics, artificial intelligence and medicine. All strengths, all have buy-in by the Canadian Space Agency. The question is, will this generate jobs, long term jobs in industries that also have commercial spin-offs. MDA, the Canadian Space Agency and other believe so, otherwise they wouldn't be backing these technologies. Recommendation 4: That the government provide $1-2B over the next 20 years, starting in Budget 2019, to fund a third generation Canadarm, securing Canada’s existing world leadership in space robotics and positioning this country for competitiveness in the new space economy. To frame my answer to this question I'll include the following paragraphs from the Long-Term Space Plan II of 1994. SPACE AT A TURNING POINT At the time of the February 1994 Budget, the CSP (Canadian Space Program) was at a turning point. Federal funding was expected to decrease rapidly over the next two to three years, due to the completion of major projects such as MSAT (The North American mobile satellite system) and RADARSAT. Moreover, it was recognized that, as a result of the substantial cost increases that have occurred in the International Space Station, important decisions had to be made regarding Canada's continued participation in this program. The February 1994 Budget stated that the Government was committed to establishing a new Long Term Space Plan that would be affordable and yield the most benefits for Canada. The Budget provided $800M in incremental funding over and above the $1.7B currently approved for the next ten years to establish a Space Plan that would focus on Canadian needs and areas where Canada has developed competitive international advantages such as Earth observation and Satellite Communications. We're at another turning point. The space program budget is decreasing, there are no more major project in the pipeline and Canada needs to made a commitment on a substantial program, the Lunar Orbital Platform-Gateway. In the 1994 LTPS II the 10 year Canadian Space Program budget was $2.7B. In today's dollars, only adjusted for inflation, that's $4.2B. MDA is asking for $1-2B over 20 years. Big numbers right? But break it down and it works out to $50M - $100M per year. In the context of comparing it to Canada's investment in the International Space Station, it's actually quite modest. Of course this doesn't include the investment needed for the Medical contribution Canada wants tot make. But that would be a much smaller sum. And of course this doesn't include the funds needed or wanted by other stakeholders. In the LTSP II the $2.7B over 10 years was broken down as follows; $496M for the International Space Station $421M for RADARSAT $350M for Earth Observation $330M for Satellite Communications $364M for Space Technology $311M for Space Science $61M for Canadian Astronauts Other funding $278M Reserve $146M Here's a what if scenario. If we took that $2.7B and used the inflation adjusted $4.2B over the next 10 years for Canada's space program that would work out to an average of $420M per year. I will note that if the space budget was set at that average yearly rate we would still be below what we need to be to remain competitive if you look at the OECD Space and Innovation report of 2016. Regardless, let's continue with this exercise. The current Canadian Space Agency base funding is $260M per year and next years forecast budget for the Canadian Space Agency is $311M. So if Budget 2019 included increasing the Canadian Space Agency budget to $420M there would be enough funds for the low end of MDA's LOP-G wish along new funding for other programs. Space was important to Canada in 1994, it's more so now. Just a small quibble This really is a small quibble. When Ms. Leona Alleslev (Conservative MP - Aurora—Oak Ridges—Richmond Hill, Ontario) asked Greenley about Canada's program and its importance, he touched on many of the relevant points. However in talking about Earth Observation (EO) he focused on radar, and as we know MDA and Canada are leaders in the area of Synthetic Aperture Radar (SAR). However, beyond SAR and the upcoming launch of the RADARSAT Constellation Mission which is a SAR mission, Canada has no new EO satellites planned, no EO strategy and we rely too heavily on U.S. and European assets for other EO data. A national forum on EO will take place next month at CSA headquarters. Greenley however, missed an opportunity to expound on this very important area. EO is not only important for the benefit to Canadians, there is an economic opportunity ready for the taking for those nations and companies willing to step up. Prepared statement by Mike Greenley, Group President of MDA Thank you. As mentioned, I'm Mike Greenley. I'm group president of MDA. MDA is Canada's space company. We have about 2,000 employees across the country in five sites. I'm also representing several hundred other Canadian companies today that are engaged in Canada's space industry. I'd just like to speak for a few minutes about our role in space, involving projects around space robotics. We have an updated submission, from what we had done before. We'll hand that out quickly, so you have a copy of it. As I talk about this, my colleagues and I across the country would like the committee to consider a time in space 12 years from now. There will be a new space station operating in orbit around the moon. On that space station will be the third generation of Canadarm. That's the project that we're talking about today. If we imagine the next generation of Canadarm space robotics on this new space station, there would two components—a large robotic arm that would be used to assemble the space station over the next seven years, and then the small dextrous arm that would support robotic operations helping astronauts. This small arm would also be able to crawl inside the space station and maintain and operate it during times when there are no astronauts on the space station. Today, as you know, Canada has robotics on the current International Space Station that is in orbit around the earth, about 400 kilometres away. This next generation space station that'll be operating a decade from now will be 400,000 kilometres away in orbit around the moon. This next generation of robotics, as a result, will be absolutely the most advanced robotics in the world with an extensive amount of artificial intelligence-based control systems and operating algorithms in it, leveraging the AI community from Waterloo through to Montreal and across the country. Canada is expected to, and has been asked to, contribute the robotics to this next generation space station. If we imagine this world 12 years from now, when this is all operational, it will have been operating for five years. The international community wants to launch the next space station in 2024 and have it operational in 2025. During this period of time over the next few years, this project will have generated a little over 45,000 jobs, will have engaged about 500 companies across the country and will have caused about $3 billion of economic activity here in Canada as a result of the project. Based on comparisons to past space projects in Canada, it will have most likely generated about $2 billion dollars over the next decade in additional spinoff exports on terrestrial applications of robotics here on earth, in addition to commercial robotics that will be used in low-earth orbit around the earth, doing in-orbit servicing, space mining, space manufacturing, in addition to—with the privatization of the operation of the current International Space Station—putting robotics on that. We have about $3 billion of economic activity from this project and about $2 billion of additional follow-on exports. To make all of this happen, budget 2019—this budget that we're discussing—and decisions by government in 2018 have to be made. The Government of Canada needs to recognize space as a national strategic asset, based on the 50 years of experience we've had. It needs to polish a long-term space plan for Canada, and this next budget must make a commitment for Canada to contribute the AI-based robotics to the next space station, the lunar gateway. That is a $1 billion to $2 billion commitment. NASA and the international community need to see that Canada has made that commitment so that Canada can continue its leading role in the provision of space robotics to the international community. It must be in this budget. If it's not in this budget, then it will fade away as an opportunity. Other countries have published their space ambitions. The United Kingdom wants to be in the top 10% of the global space market by the year 2030, during this same period of time. Countries as small as Luxembourg have committed hundreds of millions of dollars to invest in space exploration and expansion in their sectors. The United States, Germany and Japan all want to put robotics on the next space station, but that space is reserved for Canada, based on our 30 years of experience providing space robotics, thus far. Ipsos conducted polling this spring to ask Canadians what they think about this topic, and 80% of Canadians are supportive of developing the country's space sector and think it's a good decision to increase the amount of investment in space for this next generation of activity. Some 90% of Canadians agree that maintaining leadership in space robotics—especially the Canadarm—is good for our country, and important. As well, 85% of Canadians would like to see Canada maintain this role in a new lunar mission. We have significant voting power and interest from Canadians, indicated by Ipsos, in this topic. Conversely, 85% of Canadians expressed concern that Canada might lose its position that it has established in the space sector over the last 50 years by not committing. There are a lot of votes to be lost at the same time. Our community is asking us to make this commitment to provide AI-based space robotics to the next generation space station called the lunar gateway, and to not let go of our position. If we let go, other countries will take it. We will lose the position that we have established over 60 years. We will lose our position in AI-based robotics where we can be the world leaders moving forward, and we will lose the opportunity to continue our leadership role in the international space community, which gets us all of our astronaut missions as well. Thank you. That's our submission. Committee member questions (in order) Ms. Leona Alleslev (Conservative MP - Aurora—Oak Ridges—Richmond Hill, Ontario) Alleslev – Thank you very much. Thank you very much for your presentations. Mr. Greenley, there are those who would argue against a space strategy because they say it's a luxury for rich countries that we don't necessarily have. Yet we need it for our competitiveness. It's a national strategic asset that was identified as a key industrial capability generating $5.5 billion in revenue, 10,000 direct jobs, 22,000 indirect jobs and $2.3 billion in contribution to GDP. While the exploration of outer space with AI and the next generation of Canadarm is a very romantic notion, could you give us an idea of the other elements of the space strategy that are maybe a little more down-to-earth, such as mid-earth orbit, low-earth orbit, RADARSAT, both military and civilian, so we can fully appreciate that this is not an outer space notion? It's actual command and control communications. Canada has been a world leader and is now at risk of not being a world leader. Greenley - The first thing to talk about is space exploration and the number of jobs and stuff that come from that, which is all factually correct. Those jobs are very high-quality positions in the country in terms of the economic base. The expansion of artificial intelligence and robotics in space generates, in the companies that are involved in it, approximately 70%, in our examples, of STEM jobs: science, technology, engineering and math-based jobs. It's a very high-quality sector in terms of participation in the economy, even though the application is in space. The spinoffs of that work have affected medicine and advanced manufacturing, so far in our 30 years of experience. When Canada chose to be the third country in space, it established this sector and has benefited greatly, both in the jobs that participated in space and the spinoff benefits, even from things like AI and robotics. Beyond AI and robotics, the sector that we call space exploration includes rovers—advanced vehicle design and manufacturing for rovers on the moon and Mars. Canada has been on Mars for 14 years now. In addition, there is medicine. We're now getting into remote monitoring of astronauts on the moon and Mars. Telemedicine means being able to put sensors on astronauts to monitor and diagnose their health, and have new forms of medical treatment and coaching from 400,000 kilometres away. Obviously, the spinoffs in telemedicine for rural communities on earth will be extraordinary as a result. Alleslev – What about satellite communication? Greenley - The next two areas will be satellite communications and earth observation. Canada established itself as a leader in satellite communications in the 1960s. It was the first country to have a domestic communications satellite, the first country to have direct-to-home TV broadband from space, and the first country to have two-way Internet access across the country, in 2004. Canada was also one of the first countries to have earth observation, where we use radar-based satellites to monitor the climate, ice, agriculture, natural disasters, transportation, maritime traffic and the like. We have studied all these benefits, and we have calculated that each individual Canadian interacts with space-based data or space-based benefits about 20 to 30 times a day. Alleslev – What happens without a space strategy? We had one 25 years ago and now we're at the end of that ramp. If we don't have one now, are we at the leading edge or are we at risk of losing it? Greenley - Yes. Your own consultant said that Canada is currently bleeding off the edge of a strategy that is over 20 years old. There is no doubt now.... When we started this in Canada, we were the third country in space and one of the six countries in the current space station, having our space agency a few decades ago. Now, we have 50 countries with domestic satellite programs, and 72 countries with space agencies. They all want in. The countries with ambition and budget are going to get the industrial base and the jobs that go with that, in addition to the economic benefits of space. Canada's industrial base, which has been established for over 50 years as world-leading, would have to find its way to countries that do have space programs and budgets if we don't continue our leadership position. Alleslev – Right now, there's a chance that other countries would buy from us. If we miss the window, they will develop their own capability. Greenley - That's already occurring. As a representative of Canada's largest space company, in terms of the corporation that I run, I'm already seeing us set up in other countries where there are greater space ambitions and budgets. We're very committed in Canada. We want to see it hold its leading position. But it needs to do so, and the next 12 months are a critical time. This next budget is critical. Alleslev – To ensure that the Canadian— Hon. Wayne Easter (Chair – Liberal MP -Malpeque, PEI) Easter - Sorry, that's your time. Mr. Francesco Sorbara (Liberal MP - Vaughan—Woodbridge, Ontario) Sorbara - Thank you very much. In today's world, anywhere in the world, having access to the Internet is crucial for anyone's business success, and even just for information. It's like what the telephone became. Moving on to MDA, I have a quick question. I don't think most Canadians think of space every day in their common language. They probably think of their house, their job, getting their kids to school and so forth. MDA is a leader in Canada. You have operations in Richmond, Brampton—next to my riding—and obviously Montreal. What would be the biggest bang for our dollar—and when I say that, I mean the tax dollar—that we could put in place to help MDA and the related companies? We have a great education system, and we're doing a lot of good things for fundamental research and the funding of our universities. This is obviously leading research, and we want to be involved. Could you list one or two things we could do that could produce long-term results, but also results in the near term? Greenley - The way we're working at the moment, Canada's contribution of artificial intelligence-based robotics on lunar gateway is the biggest bang for the buck. This is because of the positions it creates and the number of companies that are engaged. The last project, Canadarm, was around 500, and we would expect the same again. The jobs are expansive across the country. In terms of the advancement of both artificial intelligence and robotics, on which a current study is being done by ISED, these are certainly areas that Canada wants to focus its expansion on. This is the leading edge of that stuff. It certainly drives that aspect of the economy. In addition, this type of program and Canada's contribution are what gets Canada's astronaut missions in trades. Our previous investments have earned us 18 astronaut missions, the latest of which will go up this year. Our current astronauts, the latest two, don't have missions. Without these commitments, they won't get missions. Those missions, and the programs around them, also massively engage our youth in their ambitions to enter into STEM education and the like. That's the “bang for the buck” side of it. Hon. Wayne Easter (Chair – Liberal MP -Malpeque, PEI) Easter - I just have one last question, for Mr. Greenley. I met with some people from NASA a while ago in the U.S., in Los Angeles. It's not well known, but the U.S. is going to start sending men and women into space from U.S. territory again, and I gather they're looking at putting a community on the moon sometime in 2020 or 2021, basically as a training ground for later going to Mars. This is one of the difficulties. You're saying that for our space strategy we need to be providing $1 billion to $2 billion over the next 20 years. I don't know whether you'd call it crisis management or what, but one of the problems with budgets is that you have the immediate issues of the day—infrastructure, Internet, health care, etc.—and some of the bigger, very important pictures aren't seen in the immediate term. Could you lay out how you would see that expenditure of money over time to get to where you want to go? There doesn't have to be $1 billion spent next year, but I think you are saying there needs to be a sincere commitment so your community can see that the federal government is there and is going to be there with money and put the meat on the bones over time. Can you respond to that? We need to hear, “All right, here's what we need for our participation in space,” which gives your companies opportunities A, B, C and D, if you follow what I mean. Greenley - Yes, I do. The first thing is that the international community will need to see Canada make a full commitment to something like lunar gateway. I'm talking about the AI-based robotics on the new space station lunar gateway. That is one element of what you were talking about—the return to the moon. That space station will be orbiting the moon while the astronauts are living on the surface, and it will provide support to them. They want to see that full commitment for Canada to stay in the club, and then, as you said, for the industrial base to be able to continue to do the work it's been doing for 30 years. If you take that $1-billion program over 20 years, the profile of that spending can be looked at in a couple of different ways. One would be the development money to build the technology that would go up to lunar gateway, which would fluctuate between $100 million and $125 million a year, probably for the first five or six years. Then it would go down to $50 million to $70 million a year for operations and maintenance support for the 15 years that follow. It's not like it's one big cheque on one day. It's activity happening every year during that 15- to 20-year period. In addition, there is an opportunity for Canada to own and operate the robotics on the space station. That opens up a different financial management conversation, such as when we own and operate a ship or a tank or an aircraft in our government, which is a large capital asset that is treated differently financially in terms of how you capitalize it. Owning and operating robotics on lunar gateway could also be treated in that way, which dramatically changes how it would be accounted for in terms of its spending profile. Easter - Okay. Thank you for that.