Maritime Launch Services Takes it Vision to the Finance Committee in Person

Maritime Launch Services Cyclone 4M rocket. Credit: Maritime Launch Services.

Maritime Launch Services (MLS), which one days hopes to open a spaceport in Nova Scotia to launch rockets from a variety of providers, took advantage of the federal Finance Committee’s pre-budget in-person consultation opportunity to talk about its business and why it’s important to Canada.

Engaging parliamentarians

As we outlined in an earlier article, Canadian organizations submitted more briefs to the Finance Committee’s 2019 pre-budget consultation this year than the last few years combined.

The process though allows for organizations to pro-actively request to speak in person to the committee as it holds hearing every fall. It’s an opportunity that really shouldn’t be passed on if you really want to engage with parliamentarians in a public, on the record setting.

Two organizations took advantage of that so far this fall, MLS and MDA.

Below is the prepared statement by MLS along with the Q&A that followed during the meeting.

From the Q&A we learned a few new facts about MLS’s plans.

  • MLS has been in discussion with Telesat to launch some of their satellites.
  • MLS has put in about $5M of its own money with some of the funding coming from unnamed Canadian companies.
  • MLS is looking to close its Series A round for around $20M.
  • MLS has interest from investors in the longer term debt of the approximate $210M it needs. Those investors are interested in taking on about 3/4 of that debt.
  • MLS has around $500M in Letters of Intent (LOI) including one from Canada, as well as from Italy, Israel and the U.S. They also have another one pending from Canada. They also have pending LOI’s from the Netherlands and South Africa.
  • Steve Matier, MLS CEO, is all in, having moved his family to Nova Scotia.
Part of an MLS community open house brochure in handed out December 2017
Part of an MLS community open house brochure in handed out December 2017. Credit: Maritime Launch Services.

Prepared statement by Steve Matier, CEO MLS

Good morning and thank you, Mr Chair, to you and to your honored colleagues for the invitation and opportunity to be here today to speak with the House of Commons Standing Committee on Finance and to answer any questions I can.

I am the president and CEO of the Nova Scotia start up company, Maritime Launch Services. My near 30 year background in the aerospace industry includes 16 years as an engineering manager at the NASA White Sands Test Facility where I led teams in the development and test of propulsion systems including those onboard the Space Shuttle. During that time, I was honored to receive two safety commendations including the astronaut’s Silver Snoopy award. The past near 14 years I have been an independent consultant working directly in the US commercial space industry on building and licensing spaceports and working with launch vehicle operators from around the world. In 2016, in partnership with two other small businesses, we started Maritime Launch Services Ltd to provide launch services to the growing commercial satellite market. I am now living in Nova Scotia and am focused on delivering on the development of what will be Canada’s first ever orbital launch capability.

There is a new space race. Ever since the retirement of the Space Shuttle in 2011 and coupled with the significant changes in technology that has miniaturized the typical satellite, private industry has stepped in to utilize low earth orbit for a host of communication and science related activities to study our earth and its changing environment. Many new start up companies are developing and maturing their launch platforms to serve this growing market. These start ups recognize that the global space industry is on the cusp of major change, one characterized by more frequent launches of smaller, short-lived, satellites, many of which will go into sun-synchronous polar orbits. This appetite for space-based services and information is growing asymptotically. This is especially true for internet-related developments and the need for more precise information (agronomic, economic, meteorological, hydrological, etc.) about specific localities. Perhaps most important, space-based remote sensing is now much more dynamic, with information becoming more perishable and the demand for frequent resampling growing geometrically. Being able to support the new demands of the market will require low-cost solutions that can be rapidly tailored to individual customer preferences. In other words, a customer focused launch site in support of commercial satellite customer needs that can put the satellites where they are needed in space instead of just as ride-shares on government missions. Moving quickly is the key to capitalize on this market in the area of launch vehicle design and construction, launch services, and engineering and expand those programs as they currently exist in Canada, including in Nova Scotia. Rapid establishment of a brand/reputation, within the context of the first Canadian spaceport initially and world-wide eventually, will cement the positioning of Nova Scotia as a pathfinder model in the emerging scientific, economic, commercial, and strategic global relationships.

This global space economy has reached $340 billion dollars (USD) per year in 2016 and is growing 2 to 3 percent per year on average. The launch industry segment of this economy, which is the backbone of the industry, is only about $5 billion (USD) per year and is the bottleneck for the industry. MLS recognizes that the commercial global satellite market needs additional reliable launch capacity in a trajectory that the eastern shore of Nova Scotia can provide. We also recognize that the numerous start-ups developing rockets today will take time to mature fully and that partnering with the world-class, experienced, cost effective and reliable launch vehicle manufacturers, Yuzhnoye and Yuzhmash in Ukraine, will bootstrap our spaceport and deliver to our growing list of satellite customers in a timely manner. By maturing our launch service offering based on the Ukrainian technology first, we can then provide the opportunity for other launch vehicles including Reaction Dynamics, to be folded into our global offering.

With the launch vehicle offering defined and planned, that leaves finding the best launch site location as the other key piece. Not just any location is acceptable. The key attributes our location near Canso, Nova Scotia provides is a launch trajectory in the direction desired by our clients, an expanse of several thousand kilometers of open ocean underneath that trajectory, available land that is both remote from the general public but close to seaports, airports, roads, power, water and other infrastructure, but most importantly, in a location with local community support. The best site is preferred to be in North America where the largest satellite manufacturing community exists globally and in a country with a mature space industry and robust global partnerships. The site in Canso has all of these key determinants above more than a dozen other sites we studied across North America before selecting this location.

We believe this commercial spaceport development to be a groundbreaking and timely addition to Nova Scotia and Canada as a whole and fits in directly with many federal government initiatives. Your progress on the Canada Innovation Agenda, Atlantic Growth Strategy, Connect to Innovate, the Strategic Innovation Fund, the implementation of the Canada Infrastructure Bank and the revised Space Policy Initiative, all align perfectly with our goals of introducing a new industry to Atlantic Canada and the economic benefits it will bring to the rural economy in the Municipality of Guysborough. The communities of Canso, Hazel Hill and Little Dover within the municipality played a vital role in Transatlantic cable communication over a hundred years ago, and are now at another key intersection for Canada. We will be a pivotal part of the solution to provide broadband service across Canada and the globe with the constellation platforms being developed by industry, including corporations in Canada, and will offer a natural priority to domestic launches in part due to our location and in part due to our launch capacity matching dedicated client needs and not as a secondary ride share. With our medium class launch vehicle based on heritage proven technology manufactured in Ukraine and with a satellite payload capacity of over three tons, we are positioned to meet the global market demands. Our vision intersects key initiatives in Canada with global broadband, high end employment in a rural community in Atlantic Canada, supporting Canada’s growing role in the commercial space world community and showcasing the strong ties between Canada and Ukraine.

The other key aspect of the collective initiative to build rockets and launch them is the effect it has on our youth. The enthusiasm for Canada’s space program has always been strong and many of our youth are seeking opportunities in science and engineering, as a result. Unfortunately, to date, most of them have had to leave Canada in order to pursue their careers. Imagine an operational domestic launch site that has internships and employment, domestic cubesats being launched, domestic broadband satellites being launched, domestic rockets delivering them to space, domestic student rocketry programs holding annual competitions, and more. Once operational, payload customers from across the globe will be bringing their satellites to Canada. Then the anchor tenancy that the spaceport represents will be surrounded by other economic opportunity and employment for our youth. There will be opportunities to design, develop, test and manufacture satellites, adding to the existing segment of job opportunity for our students to grow into.

Our collective request of the government of Canada is to actively focus their support on the budding industry so that Canada can capture the market share that is obviously ours for the taking. Spaceport development and launch vehicle development initiatives in other countries including New Zealand, the United Kingdom, Australia, Mexico and others, are just now gearing up and those governments are finding ways to support the infrastructure development and the launch vehicle development. All the assets are here and in place except for active and streamlined government support for this global opportunity. As with the other countries and programs mentioned, there are significant numbers of investors ready to participate in the development of the opportunity, now that their governments have openly supported and seeded the initiatives with investment dollars. For Maritime Launch Services, and as the language in Connect to Innovate states, we see ourselves as a part of new backbone infrastructure in rural and remote communities across Canada for our launch site development and for our mission to support global broadband priorities. Building this infrastructure is the modern equivalent of building roads or railway spurs into rural and remote areas, connecting them to the global economy. This backbone infrastructure is the basis for the launch vehicles and satellites that are needed in todays connected world. For our budding launch vehicle development initiatives, more streamlined opportunities to seed their development through NSERC, SIF and others are needed. In all aspects, MLS has been glad for the positive response to our initiative to date across the country and look forward to collaborating with government and industry to see the vision succeed.

Thank you once again for your time and I am happy to take any questions you may have.

Stephen E. Matier
President and CEO
Maritime Launch Services Ltd

MLS artist rendering of the vertical launch area
MLS artist rendering of the vertical launch area. Credit: MLS.

Committee member questions (in order)

Ms. Leona Alleslev (Conservative MP)

Alleslev – Mr. Matier, I’d like to focus on the spaceport. For those of us who don’t know, because this is a highly knowledge-specific expertise area, could you give us an overview of low-earth orbit, mid-earth orbit and high-earth orbit, and what that sort of environment looks like from a satellite perspective? What part are you looking to target? What is the potential in terms of market, and where is that market in terms of maturity?

Why could Canada now be exceptionally well positioned to take advantage of that? That’s part of why you’re asking for what you’re asking.

Matier – The people of Canso asked, “Why Canso?” It’s a great place to start in answering your question.

They describe the place as, “It’s not the end of the earth, but you can see it from here.” It’s a great description when you want to launch a rocket over thousands of kilometres of open ocean.

On low-earth orbit, our highest altitude is 700 kilometres. The key differentiator I would point out is the sun-synchronous polar orbit. Most launches that have been happening over the decades have been equatorial launches, where you’re launching around earth and you’re staying over one place and communicating up and down.

When you have the earth spinning in this direction, and you’re coming from the other direction, you have much more coverage over the entire earth. A couple of times a day you have these satellites that are going over the same spot on earth and providing data down. If you could build a constellation, then that is meshed and surrounds the earth. Now you have an inter-network. You are providing global coverage, not only nearly real-time, but actually real-time data, real-time communication and real-time Internet in that sense.

That’s what the real opportunity is. It’s also really great for near-earth imaging. When you’re monitoring a forest fire, an earthquake zone or a hurricane, you are able to get that real-time data and observe our earth, not have that satellite go away and have this big gap. You have the ability to track that.

Alleslev – Further to that, could you expand a bit on Canada’s expertise in satellite technology and how its history of command and control systems and space strategy is also feeding into this being a great place to launch, because you have those two parts of the equation here?

Is that fair statement?

Matier – Oh yes, it’s absolutely a fair statement. MDA and Telesat, for example, are two potential key clients. We’re in discussions with Telesat in particular. They are a potential answer for the 5G from our previous discussion. You don’t need towers with 5G; 5G is satellite-based.

Telesat already has a satellite that they’re developing. They already have one flying. They already have an FCC-approved licence for the communication band that they’re talking about for providing broadband.

Alleslev – Where would they have to launch? They can’t—

Matier – Exactly. Would you rather write a $65-million cheque and send it to SpaceX in the U.S., or a $45-million cheque for really proven technology launching from the site in Canada?

It can be put in fairly simple terms like that, but there are also subtleties about the payload capacities. We can get up to five or six of their satellites on board each of our rockets, so when they’re looking at 120 satellites in their first fleet and 300 total, now we’ve become a real go-to for them.

In the launch world, you want to spread your risk among as many launch operators as you can, but there’s a real lack of launch operators. SpaceX has its own plans, so if there is any way for a global broadband—

Alleslev – We get in the back of the line.

Matier – We get in the back of the bus, so to speak. You’re absolutely right.

Alleslev – Excellent. We built this space strategy in Canada 25 years ago. It was incredible. We did great things, and then we ran out of runway. Now we have no national or federal space strategy.

Are you finding that’s an inhibitor, in terms of what you want to do for the next 25 to 50 years?

Matier – I’ve found that enthusiasm is hard to refresh with a 20-year-old document, to put it politely. There is some real interest in doing this on the part of the federal government, and certainly in the provincial governments in my work over the last couple of years, but there is certainly some catching up to do.

Alleslev – Do we need to create a focus on space strategy from a federal perspective and make sure that’s in the budget, in addition to what you’re looking for from NSERC?

Matier – That’s correct.

Alleslev – Is there anything else the federal government can be doing to support the space strategy?

Matier – Well, we’re one piece of it. We co-submitted for this committee with a couple of other firms.

There are some budding launch operators that are developing rockets here in Canada. We partnered with Reaction Dynamics for this submission. They’re based in Montreal. They’re designing and developing a rocket out of the university infrastructure, and they have some seed funding through the Space Agency. They are one of three companies in Canada that have reached out to us and are looking at spring boarding from our site as well.

Alleslev – Is there room in the market for all of them?

Matier – Oh my gosh, yes. There are several thousand cube satellites that are planned to be launched over the next few years, and most of them are ride-shares and back-of-the-bus kinds of things. There are dozens of launch operators that are trying to get going globally. You know, the Rocket Lab, Virgin Orbit, and a number of others are trying to get going.

There is certainly plenty of space for it. They’re at 150- to 200-kilogram capacities, and we’re at three tonnes, so we’re a different market segment. There’s plenty of room in the market, especially at the growth rate that we’re seeing.

Alleslev – Are we late to the game, or are we still in a position where we could have a command and market share, and a leadership position?

Matier – We can certainly have a leadership position by springboarding with the partnership with Ukraine that we have going right now. Yuzhnoye and Yuzhmash have been flying rockets since the 1960s, and no one has anything more mature across the globe, period—not even NASA.

They’ve launched 675 times in various aspects under various guises, as part of Sea Launch, as part of Russia, as part of the European Space Agency and as part of Orbital ATK’s Antares rocket. They’re a part of all of those, and they’ve been going for decades.

By utilizing them as part of our springboard for getting our site up and running, we’re meeting our clients’ needs, but we’re also offering that opportunity for the small satellite launchers to fit in and tuck underneath.

At the end of the day, I’m a rocket guy. Rockets are hard, and you don’t want to rush them. There is opportunity there, certainly, but it will take maturing of the rocket technology for the smaller companies to advance.

Hon. Wayne Easter (Chair – Liberal MP)

Easter – Mr. Matier, before we go to Mr. Fergus, what would be the As, Bs, and Cs the federal government would need to do to get the refresh on the space program you’re proposing?

I’ve talked to Rodger Cuzner about this a few times. What do we need to do from our end to get there?

Matier – The “A” part is, of course, refreshing the pre-existing documentation. There is, for instance, a suborbital/orbital launch regulatory framework, and the last date on it is 1999. We’ve started to work collaboratively with Transport Canada, but they’ll admit it has been rather ad hoc. I’ve come to the table with this proposal, and they’ve been gracious enough to work collaboratively with us to pull in the CSA to review some documentation along the way, but a concerted effort in the framework for that regulatory environment is key to this.

Probably most important, though, is public support. You’ve seen a lot of the go-public support by the federal government for this initiative. There have been bits and pieces—the space policy initiative, some seed funding from the CSA. There’s been a large push recently by the aerospace community to try to bring this to the forefront of priority. Much like you have the rural broadband initiative as a focus, having this anchor tenancy of the spaceport will be a big part of the draw for the entire commercial aerospace industry in Canada.

It’s that focus that is really going to bring it all together. I have investors who are looking to know whether the federal government and provincial government are going to be on board with this thing. It’s really about that vocal support for a Canadian commercial launch facility.

My first visit was in Moncton, to Transport Canada, and I told them to be willing to throw me out of the room if they didn’t want to hear my story. It was the best briefing opportunity to hear about rocket launches and stuff like that that they’d had in a while, so they weren’t going to send me away. But the whole idea was that they could throw me out of the room if they didn’t want to embrace this.

Everybody’s allowing this initiative to go forward, but nobody has been standing next to us and running with us. I feel like a marathon runner, alone. I’ve gotten a few water bottles along the way with this initiative, but it would be good to have some people running alongside me, especially within the federal government. As you pointed out, MP Cuzner has been a real advocate for us and supporting us, for sure.

Peter Julian (NDP MP)

Julian – Mr. Matier, on your project itself, what is the overall capital investment that’s required to actually bring this to fruition?

Matier – That comes based on my experience in other spaceports that I’ve worked on before. The overall price tag to build the launch facility itself is $210 million. We have quite a number of people who are interested in the larger debt portion later on, and in some equity portions in the middle, but it’s that kick-off part that we’re really having trouble getting people on board with. We have a large amount of seed funding that we’ve put in to get this thing kicked off. It’s that next part, call it series A, that is really trying to get a hold.

Julian – So it’s $210 million, and currently you have investments lined up for….

Matier – We have investments for probably three-quarters of it, but they’re for when the risk is a little lower later on. It’s how the investment community works. They’re happy to get involved from a debt or venture capital perspective when they see the risk is less. We have almost $5 million into it so far, which we’ve invested as a group with some Canadian companies that have joined us. We’re looking at that next 10% or so, to really push it over the top into that realm where everybody feels that this is really a done deal, that we have that investment and that government support, and now the rest will fall into place.

Julian – Is there any provincial, municipal or regional economic funding?

Matier – No, we have not received any. We do have almost half a billion dollars in letters of intent from satellite clients, though.

Julian – Sorry, is that half a billion dollars?

Matier – We have half a billion dollars in what are called letters of intent. They’re soft contracts, basically, that are geared toward the firm contracts that will come later on. Those expressions of interest from the satellite community are part of what our investors are looking at. We’re building more of those all the time, and we expect to have more of them in the coming weeks.

Julian – Those companies that have signed letters of intent, where are they located? Are they North American companies, or are they from other parts of the world?

Matier – One is in Canada; one is in the U.S.; one is in Israel; one is in Italy. I have one pending in the Netherlands, one in South Africa and another one in Canada. We’re working with some firms that are building satellites as well. And there are a number in the U.S. So it is truly a global market as far as the satellite community goes. Even our original letters of intent are quite global already.

Julian – The letters of intent are over how many years? We’re talking about an intention to launch satellites. Are we talking about five years ahead or 10 years ahead?

Matier –The only thing holding them up from signing a launch contract is me telling them when I’m going to launch. They are multi-launch. One in particular has an annual requirement; they want to do science missions. Another one bundles; they aggregate CubeSats. They are quite good in the market already. They have quite a history already. They even sell their launch capacity online, and they’re ready to basically put us on their website and start selling space. As many as we can fly, they’ll fill.

Our financial model is based on eight launches a year. We know we can achieve 12 launches a year without any major manufacturing changes with the Ukrainian company, so at this point basically one a month is what we would see to fully realize the project.

Julian – I have one more question.

Who are your competitors? Worldwide, how many of these private launch sites, spaceports, would be either in the final stages or operational?

Matier – There are none in our class. There is one commercial launch site, Rocket Lab. They have a 150-kilogram payload. They’ve launched twice—one launch was successful—and they’re hoping to get going. But theirs is a baby rocket by comparison. They can’t even get one of Telesat’s satellites on board their rocket. It’s a 500-kilogram satellite for the global broadband. Those small rockets can’t even get one of those on board, whereas we can get five or six on board.

The others around the globe, whether it’s India, the European Space Agency, China or Russia, are all government-founded. All the U.S. launch sites are government-founded. While there are 11 spaceports that are licensed in the U.S., the launch operators are much fewer. Virgin Orbit is close to going operational with tourism, but they’re still a year or two away from doing small satellites of 200 kilograms.

Hon. Wayne Easter (Chair – Liberal MP)

Thank you, both.

I really liked your words, Mr. Matier. Transport Canada is “allowing” versus embracing. I think we have to get to that embracing, in terms of seizing the opportunity.

MDA

About Marc Boucher

Marc Boucher
Boucher is an entrepreneur, writer, editor & publisher. He is the founder of SpaceQ Media Inc. and CEO and co-founder of SpaceRef Interactice Inc. Boucher has 18 years working in various roles in the space industry and a total of 25 years as a technology entrepreneur including creating Maple Square, Canada's first internet directory and search engine.