Canadian space firm making shift to U.S.
Canada’s iconic and largest space firm, behind the creation of the Canadarm and key spacecraft such as Radarsat-2, will become a U.S. company within two years.
The Conservative government in 2008 blocked the sale of MacDonald, Dettwiler and Associates to a U.S. firm.
But now through a merger and acquisition of another company, MDA has become Maxar Technologies and will transform itself into a fully incorporated U.S. company by 2019.
But the American who leads the new company says Canadians don’t need to worry since the country will still retain overall control of the Radarsat-2 surveillance satellite, and he has no plans to cut jobs in Canada.
Conservative MP Maxime Bernier, however, says Canadian taxpayers will ultimately be hurt by the deal as government-financed high technology heads south of the border.
In October, MDA finalized a US$2.4 billion deal to buy the U.S.-based satellite imagery firm DigitalGlobe. It then rebranded itself into Maxar Technologies and announced plans to become a U.S. incorporated company.
MDA will continue to keep its name for its Canadian operations but will be a subsidiary of the U.S.based Maxar Technologies.
Howard Lance, who was president of MDA and now heads Maxar, acknowledges the fact the company will become a U.S. firm. “If you want to view a definition of a company as where their headquarters is, then I think the answer would, of course, be ‘Yes,’ ” he explained.
But “we are as committed to return the level (of) innovation the level of technology development and to be an important taxpayer,” he added. “As a corporate citizen, none of those things are changing.”
Lance said the move to become a U.S. firm will not affect the Canadian operation, which has 1,800 employees in Richmond, B.C., Brampton and Ottawa, as well as Montreal and Halifax. “We have no plans as a result of our merger to significantly move any jobs from Canada to the U.S,” he added.
But Bernier, who is the opposition critic on the industry and science file, said he is concerned the U.S. will eventually gain control of strategic Canadian assets and technology. “In this deal, it is the Canadian taxpayers who lose,” he said, noting that large amounts of government dollars have gone into financing MDA technology.
Bernier said the Conservative government thought MDA was critical enough for the country that it stepped in to stop its purchase by Alliant Techsystems of the U.S. in 2008. That deal would not be “a net benefit” to Canada, the government noted at the time.
The proposed purchase to Alliant sparked national protests, debates in the Commons, and ultimately the refusal by Canada to allow the deal to proceed.
Officials with the Prime Minister’s Office, Department of National Defence, and Innovation, Science and Economic Development have all been provided with information by Lance and his officials on Maxar’s plans. The Liberal government has not raised any concerns about the deal.
Lance said the situation is different this time around. There is no actual purchase of MDA by a U.S. firm. In addition, Canada will retain control of key space assets such as the Radarsat-2 surveillance satellite, he added.
Lance also points to the high level of collaboration between the U.S. and Canada and the exchange of intelligence information.
Lance said MDA had limited prospects of growing if it only focused on Canada. To obtain work in the U.S. space and defence market requires meeting specific requirements with having U.S. personnel and U.S. operations.
A U.S. presence and increased capital will strengthen the firm, ultimately benefiting Canadian operations, Lance noted.
The deal is the second major move in Canada’s space industry in the last year.
In 2016, U.S. firm Honeywell International purchased Canada’s second largest space firm, Com Dev of Cambridge, Ont., in a deal that was not opposed by the Liberal government.
But two months ago, Honeywell announced it was laying off Com Dev employees because of a downturn in the space and satellite industry.
Honeywell did not provide any information on the numbers of employees being laid off but local media outlets reported that over 140 of the 400 employees at the facility were let go.