Canada's radar leader has scored a coveted space deal with Ottawa.
MacDonald Dettwiler and Associates Ltd. has landed a $706-million contract with the Canadian Space Agency, bolstering the satellite technology developer's key Radarsat Constellation project, which is being touted as crucial for defending Canada's Arctic sovereignty.
MDA's seven-year contract is for constructing three new Radarsat satellites, launching them in 2018 and overseeing initial operations. The major component of surveillance will be covering Canadian territory and neighbouring property, notably monitoring of land and water in the Arctic.
"In Canada, one of the keys is we need to take care of our vast country and our coastal zones in the North, and the way to do that is through radar surveillance," MDA chief executive officer Daniel Friedmann said in an interview Wednesday from the company's head office in Richmond, B.C. "You cannot keep an eye on Canada's Arctic without radar. So if you don't know what's going on up there, you don't own it and other people can do what they want."
The deal closes a controversial chapter in MDA's history, nearly five years after Ottawa blocked the Montreal-based company from being effectively sold to a U.S. space and weapons manufacturer because it ruled the transaction would not be of net benefit to Canada. The potential loss of robotics technology, rooted in the iconic Canadarm, was a major impediment.
The first Radarsat satellite was launched in 1995 and the second in 2007. The next three satellites will build on the expertise that MDA developed through its first two Radarsat missions, Mr. Friedmann said.
The Radarsat Constellation project will provide detailed data as the three satellites work together to detect any movements affecting Canadian territory of strategic and defence interest, with images taken several times a day. Key users of satellite images and information will include the Department of National Defence, Fisheries and Oceans Canada, Public Safety Canada and Environment Canada.
"This is about Canada's sovereignty. This is a very, very large country, and we have bad weather and lots of ice. On radar, you can see a lot of detail about that ice," he said. "We have to be able to look at our own territory, and this radar is the tool to do so. In the winter, it's dark a lot of the time in the Arctic. With radar, you can see a ship at night. You can see when it's snowing or raining or through clouds."
MDA complained last year that the federal Conservative government neglected to extend funding for the Radarsat venture amid a budget squeeze at the Canadian Space Agency. But on Wednesday, Industry Minister Christian Paradis said Ottawa is committed to financing the final stage of the project, whose roots date back to the 1990s.
"Our government is ensuring we have the tools to assert our sovereignty, monitor and manage our resources, and keep watch over our vast territory and coastal areas," Mr. Paradis said in a statement from the Montreal suburb of Sainte-Anne-de-Bellevue, Que., where MDA's satellite systems division is located. The Canadian Armed Forces and the Canadian Coast Guard will be among the beneficiaries of the new technology.
With the Radarsat Constellation deal now on its order books, MDA's backlog of contracts has climbed to $2.9-billion, including projects with commercial applications for television, Internet and mobile.
Mr. Friedmann said he is pleased with how events have unfolded and that the cloud of uncertainty has lifted over Radarsat Constellation's funding. "We want to be world leaders and we want to be in Canada. It's the right thing for Canada and it's the right thing for us," he said.
Once the three next-generation satellites are in operation, MDA will be able to take other types of global data gleaned through radar and sell non-classified information to customers beyond the Canadian government. The company is optimistic it will be able to raise new revenue by providing service to a range of industry sectors, including oil and gas, mining, defence and security, Mr. Friedmann said.
The Canadian government has certain rights to obtain all the data that it requires, notably about Canada's Arctic and coastal regions, but that still leaves a huge amount of capacity to take images of other parts of the world and market that information to Canadian and foreign customers in the private and public sectors, he said.
Naser Iqbal, a technology analyst at Salman Partners, said MDA fulfills an important national function since no other company in Canada has the expertise, size or scope to take on the role of prime contractor with the Canadian Space Agency. MDA has more than 5,000 employees located in Canada, the United States and other countries.
With the Canadian government's need to keep defence and strategic data classified, MDA is the natural choice for the Radarsat Constellation project, even though there are larger foreign players such as Boeing Satellite Systems and Thales Alenia Space, Mr. Iqbal said. "You don't want to give Canadian defence secrets to other countries," he said.