Monday, September 29, 2008

Why block the sale of MDA when the Pentagon might buy the technology anyway?

It looks like the blocked sale of MacDonald, Dettwiler and Associates' (MDA) space division to U.S. arms manufacturer Alliant Techsystems back in April, with all the nationalist brouhaha that accompanied it, allowing the Conservatives to paint themselves as defenders of Canadian sovereignty might turn out to be, well, a lot of hot air. Recall one of the central criticisms of the deal, that the MDA technology, developed with the Canadian taxpayer footing the bill, should not be given away:
Prentice last month announced his rejection of the proposed foreign takeover of MDA's space and information systems divisions, which includes Canadarm, Dextre and the Radarsat-2 satellite, to Alliant.

Critics of the sale, including former Canadian Space Agency head Marc Garneau, had called on Prentice to block the deal, saying it handed over taxpayer-funded technology and, in the case of Radarsat-2, gave away technology designed to protect Canada's sovereignty.
A U.S. firm was ready to pay more than $1 billion for MDA's satellite division.

But critics warned the deal would compromise Canada's national security by transferring ownership of taxpayer-funded space technology to a foreign company. In particular, they raised concerns about the country's ability to retain control of the Radarsat-2, which the military uses to monitor Canada's Arctic interests. (emphasis added)
Note the national security element...transferring the technology to a foreign company. That was a central concern expressed at the time, in addition to the ability to retain control of Radarsat-2 technology here.

David Pugliese wrote on September 12th, around the time that Harper was announcing new foreign investment rules, that the Pentagon is eyeing the acquisition of a clone of the Radarsat-2 satellite that MDA has developed. Raising the question, why block the sale of MDA to a U.S. arms manufacturer when it's possible that the company is going to sell the technology to the U.S. in any event? I suppose the ownership of the MDA space division remains in Canada and Canada gets to use the technology, but the taxpayer-funded technology still ends up with the Pentagon:
After trying unsuccessfully for years to build its own radar satellite, the Pentagon is now turning to its allies for help and has been presented with a plan that would see it buying a clone of Canada's highly successful Radarsat-2 spacecraft.

The U.S. Defence Department asked for and received information this week from a number of foreign satellite consortiums on how they could help the Pentagon meet its surveillance needs for the future.

Defence analysts and space industry officials say the U.S. is looking over the short-term to buy surveillance information generated by existing satellites but could also purchase proven foreign satellite designs with an eye to launching such spacecraft in orbit starting around 2012.

MacDonald Dettwiler and Associates of Richmond, B.C., the owners of Radarsat-2, responded to the request, and although the company isn't providing specific details, the options presented to the Pentagon are believed to range from the selling of surveillance data from Radarsat-2 to building a clone of the spacecraft for the Americans. (emphasis added)
Would building a clone of the technology be OK with the Conservative government and their new foreign investment rules? After all, here's what Harper had to say on September 12th:
"We are the only country in the G7 without a national security test in its foreign investment reviews," Harper said, while picking up on a theme he first addressed at the time the MDA transaction was being considered.
And here's what MDA is saying about it's possible sale of a Radarsat-2 clone to the Pentagon:
Oldham said if MacDonald Dettwiler sold the U.S. a copy of Radarsat-2 it would have to receive permission from the Canadian government to export such a system. He, however, did not see that as a hurdle.
The "national security" test that Harper is referencing, then, likely won't prohibit such a deal to the Pentagon.

Something to watch going forward...the big nationalist show by Harper and Prentice to keep the taxpayer-funded Radarsat-2 technology here in Canada was likely a temporary public relations exercise. We'll see.