Monday, March 24, 2008

Ottawa delays ruling on sale of Canadian space firm

The country's largest space company will remain Canadian for at least another month.

It was confirmed Thursday that Industry Minister Jim Prentice will delay deciding whether he will approve the sale of a branch of MacDonald, Dettwiler and Associates to U.S. firm Alliant Techsystems for 30 days. The U.S. company's $1.325 billion purchase offer for the Richmond, B.C.-based company's space-related assets was announced in January.

Under the Investment Canada Act, the sale of MDA must be approved by the federal industry minister because it involves a foreign investor making a purchase valued at more than $285 million.

According to Prentice's communications director, Bill Rodgers, the minister sent a letter to Alliant on Wednesday indicating "the review process under the Investment Canada Act would be extended 30 days from the date of the letter."

Among MDA's signature technologies is the $524 million Radarsat-2 satellite - the high-tech imaging satellite launched last December which taxpayers paid more than $420 million to develop.

Despite the large amount of public money that went into its development, MDA was able to retain ownership of Radarsat-2.

However, the Canadian government obtained access to the imagery it can provide - including detailed pictures of the remote stretches of Canada's Arctic territories.

Rodgers said Prentice would not be commenting publicly on the reasons for his decision.

Alliant spokesman Brian Cullin said the delay was "all part of the process" and that the U.S. company would continue to co-operate with Ottawa as it awaited a final decision on the proposed deal.

If it proceeds, the sale would involve 1,900 MDA employees, including those working at facilities in Richmond, B.C., Brampton, Ont., Toronto, Montreal and Halifax, Cullin said.

Various stakeholders in Canada's aerospace industry, as well as a number of MPs, have criticized the potential MDA sale, suggesting Canada could lose access to the Radarsat-2 satellite imagery.

Conservative MP Art Hanger said "it is a very good move" to delay approving the potential deal.

Hanger called on those with knowledge of the Canadian space industry to go public with their concerns about the deal before there is no chance left to do so.

"There are a lot of people out there that know what the importance (of MDA) is and they are holding back for whatever reason," he said. "I'm trusting that more of these expert types will come forward."

NDP Industry Critic and MP Peggy Nash said she, too, was "glad to hear" Prentice would delay making his decision on the proposed deal, but expressed concern the sale could still be approved.

"Based on what we have heard so far, I am very concerned about the impact of a sale," she said, suggesting that MDA was "the jewel of Canada's space industry."

Members of Ottawa's Rideau Institute and the Canadian Auto Workers also held a press conference on Parliament Hill Thursday to highlight reasons why they believe the proposed MDA-Alliant deal should not be approved.

Steven Shrybman, a lawyer retained by the Rideau Institute, suggested the proposed deal will give the U.S. the right to decide who can make use of MDA's remote sensing technologies and how they are used - including Radarsat-2

"The U.S. government can restrict what information is provided to other governments, including Canada," he said.

Shrybman added any deal involving the Radarsat-2 requires the consent of Foreign Affairs Minister Maxime Bernier, because the transfer of a satellite license requires his approval under the Remote Sensing Space Systems Act.

Carol Phillips, an assistant to CAW president Buzz Hargrove, said the union welcomed "the fact the government is giving this sale some more thought."

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