Aerospace Review Report Cites Insufficient Policy Clarity and Calls for Greater Commitment to the Space Sector

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Aerospace Review

An independent Aerospace Review mandated by the government in its 2011 budget has completed an 11 month review of the aerospace sector and released its recommendations today. The two volume report, one focusing on the aerospace sector, the other on the space sector, could have far reaching consequences depending on whether the government pays heed to the recommendations.

Since SpaceRef is focused on the space sector this story will focus on volume 2 of the report.

It's been just over four years since Steve MacLean was appointed the president of the Canadian Space Agency (CSA) in September 2008 with an immediate mandate to lead an effort to create a long-term space plan for Canada. He did what he was tasked to do but the government chose not to approve the plan, nor release it.

This led to an unsettled space community and has left an international audience perceiving that Canada was not as committed to its space endeavours as in the past. Canada's space competitiveness relative to other spacefaring nations was lowered in successive years as measured by the independent analyst firm Futron in their annual index.

In an odd move the government mandated in the 2011 budget a comprehensive review of aerospace policy and programs even though the CSA had already completed its own review with broad input from the space sector.

We were back to square one.

The review process was to take 12-18 months according to the government when it was announced but in actuality took less than 11 months having started in earnest in January of this year.

The results of the review were released today and the executive summary makes it clear that Canada needs a clear policy going forward:

"Advancing the national interest through space-based activity and fostering a competitive Canadian space industry will require resolve, clear priorities that are set at the highest levels, and effective plans and programs to translate these priorities into practice. If the Canadian effort in space has been hampered over the past decade, it is partly because there has not been sufficient clarity of purpose, lines of authority among public agencies have been blurred, and processes for procuring space assets and services have failed to adapt to new global realities and the commercial capacity of space firms. In a sector whose undertakings are innovation-dependent, long term, expensive, and complex, it is critical to have concrete goals, predictable funding, and orderly implementation."

And the report outlined the following eight recommendations:

1. The government explicitly recognize the importance of space technologies and capacity to national security, economic prosperity, and sustainable growth, and that the Minister of Industry bring 10-year, 5-year, and annual government-wide priorities for the Canadian Space Program to the Cabinet Committee on Priorities and Planning, which is chaired by the Prime Minister, for discussion and approval each spring.

2. The government establish a Canadian Space Advisory Council, reporting to the Minister of Industry, with membership from industry, the research and academic communities, provinces and territories, and federal departments and agencies.

3. A deputy minister-level Space Program Management Board be created to coordinate federal space activities, project-specific arrangements be put in place to ensure disciplined project management, and all agencies and departments with a role in the Canadian Space Program be required to report on how they are implementing priorities set out by Cabinet.

4. The Canadian Space Agency's core funding be stabilized, in real dollar terms, for a 10-year period; major space projects and initiatives be funded from multiple sources, both within and beyond the federal government; and increased international cooperation be pursued as a way of sharing the costs and rewards of major space projects and initiatives.

5. The scope of space projects, project timelines, and performance requirements be finalized as early as possible in the project definition phase.

6. Space asset and service procurement processes be competitive in nature and proposals be assessed on the basis of their price, responsiveness to scoped requirements, and industrial and technological value for the Canadian space sector.

7. Total funding for the Canadian Space Agency's technology development programs be raised by $10 million per year for each of the next three years, and that it be maintained at that level.

8. Where costs are modest and there is no risk to public safety, the government create conditions conducive to the expansion of space-related commercial activity.

Aerospace Review Working Groups

Now that the report has been delivered to Industry Minister Christian Paradis the question is what will the government do with it? According to David Emerson who led the review the government can choose to follow the reports recommendations or not.

Commenting on the release of the report Industry Minister Christian Paradis said "I would like to thank Mr. Emerson and the members of the Aerospace Review Advisory Council and the Aerospace Industries Association of Canada for their committed efforts, our government is taking steps to ensure that Canada remains at the forefront of the global aerospace industry, and I look forward to thoroughly examining the Review's recommendations."

With the holidays fast approaching and budget consultations ongoing, it is unlikely we'll hear much on this topic from the government until the new year.

The 2012 Canadian Aerospace Summit is next week, a week after the report has been released. This will be a good opportunity for all the stakeholders to meet and discuss the reports findings and for Minister Paradis to comment on the report.

It's not only Canadians who will be waiting and watching what the government does, but also foreign governments, industry and those with an interest.

What the government says or does not say will have a significant impact on the industry.

The space sector was in part represented in the review by the Space Working Group (SWG) organized by the Aerospace Industries Association of Canada (AIAC). The AIAC played a critical supporting role in the review having created not only the SWG but five other working groups as well to form a broad representation of the aerospace community.

Commenting on the report avid Schellenberg, Chairman of the AIAC Board of Directors said "Mr. Emerson recognizes the critical juncture the aerospace and space industry is facing and the urgent need for government, industry, academia and unions to adapt to a rapidly changing and highly competitive global environment, early and effective implementation of these policies is critical to achieving the intended results. Canada's aerospace industry is ready and willing to do its part."

The SWG was tasked to examine how the Government of Canada policies and programs can best be used to foster the economic growth and competitiveness of the Canadian space industry in order to meet public policy objectives and capture commercial opportunities.

Each working group created a report which was then forwarded to Emerson and the Advisory Council to decide what from each of these reports would be included in the final report. All six working groups reports were released today and are available below. Of note, in the executive summary of the SWG is this telling statement:

"Once a leading spacefaring nation, Canada is falling behind its competitors in almost every measurable aspect. We have not had a space policy that outlines overarching government priorities or that emphasizes the importance of industrial development since 1994 - meanwhile, our competitors are realigning their policies towards more economic and export-driven objectives."

The SWG executive summary outlines a few of their key recommendations:

the urgent development of a long term space policy framework that reaffirms the strategic significance of space to Canada and the importance of a domestic space industry and a supportive academic sector;
a renewed emphasis on space technology development in industry, flight demonstration of new technologies and applications, and space science programs;
the intelligent use of government procurement as an instrument of industrial development;
a review of the planning and management of the Canadian Space Program to reflect a whole-of-government national approach to national priorities; and
a revitalized partnership between government, industry and academia to guide Canada's space program

It's clear from these recommendations that the community not only wants a long term space plan in place, it needs it to move forward. As well, it's obvious that the community feels its important that more money needs to be allocated to the sector. One of other the recommendations which this government should take to heart, is the need to streamline procurement.

Another obvious problem as mentioned in the executive summary of the SWG report is that "Our space program is managed at the departmental level rather than at the national level."

This is a fundamental issue that goes back to the creation of the Canadian Space Agency. Originally the CSA was to have been a stand-alone organization that would have been highly autonomous, similar to a Crown corporation. But that changed just before it was created and basically left our national civil space program powerless* and at the mercy of the Industry department and whoever was appointed to be Industry Minister at the time.

It is perhaps time that the government consider rectifying this issue. After all, our space assets are now a part of our critical national infrastructure that Canadians rely on on a daily basis. Shouldn't the priority of our space program be elevated to national level on par with other departments or a separate Crown type organization? Something that most other countries with similar or larger space programs have already done.

Unfortunately the report released today does not advocate such a position but rather recommends a Canadian Space Advisory Council and a deputy minister-level Space Program Management Board be created with the Deputy Minister of Industry serving as Chair and the President of the CSA as Vice-Chair. All agencies and departments with a role in the space program would be required to report to the board.

From left to right at the Montreal Roundtable: David Emerson, Review Head, Jacques Roy, Sandra Pupatello and Jim Quick, Advisory Council Members and, Sylvain Cofsky, GARDN's Executive Director.From left to right at the Montreal Roundtable: David Emerson, Review Head, Jacques Roy, Sandra Pupatello and Jim Quick, Advisory Council Members and, Sylvain Cofsky, GARDN's Executive Director.

Dale Boucher from the non-profit Northern Centre for Advanced Technology (Norcat) who was a member of the SWG said of the report:

"The Emerson Review process was an inclusive and serious evaluation process. I am more than happy to have been invited to participate in the process. I am also pleased that the Canadian Government recognized there were some issues in the space sector and saw fit to examine these issues with an eye to correcting any imbalances which may have been identified. I am a big supporter of this type of review process, as they can often lead to innovative solutions to global problems. At the very least, the review created an environment of dialogue between stakeholders in the sector, including non Prime Contractors, which I trust will continue into the future. The sub-committees upon which I served worked long and hard to address the questions posed by Emerson. I truly hope that our collective responses are treated seriously and that actions are forthcoming."

Advisory Council member Sandra Pupatello meets with representatives of the Brazilian Space Agency

Aside from the working groups which met on several occasions in person and virtually, Emerson and members of the Advisory Council had the opportunity to meet with representatives across the country in a series of roundtables, private meetings and also participated in site visits to the United States, the United Kingdom, France, Germany, China, Japan, Russia, and Brazil.

Members of the Aerospace Review Space Working Group

When contacted about the report Geoffrey Languedoc of the Canadian Aeronautics and Space Institute and who was also a member of the SWG said "The Space WG chaired by Dave Caddey of MDA had two dozen members representing a broad cross-section of Canadian space sector stakeholders. The final report chronicles Canada's emergence as one of the world's leading spacefaring nations. It reviews the role that national governments play in domestic space industries. It explains why exploitation of space increasingly is considered to be an important strategic capability for Canada. It examines why Canada is failing to keep pace with other first-tier spacefaring nations. Finally it proposes measures that will help to restore the global stature and competitiveness of Canada's space industry."

"CASI was honoured to have participated in this top-level review and formulation of recommendations for the future of Canada's space sector. We trust that the Space WG report has met the objective set by the Minister and that it will foster a reinvigorated approach to space on the part of our federal government."

The Space Working Group released four recommendations on space policy, industry development policy, procurement policy and the Management of the Canadian Space Program.

1. Space Policy: Recommendation 1

That the Government of Canada gives urgent priority to the development of a space policy framework for the Canadian Space Program that:

provides a long-term vision and planning for Canada's space activities - government, private sector and academe;
re-affirms that the development, manufacture and operation of space systems is of strategic importance to Canada;
identifies the development of a competitive space industry as a fundamental objective;
reflects a whole-of-government approach including export controls, risk capital for R&D commercialization and regulatory functions;
specifies international cooperation as an essential element;
promotes the use of Canadian commercial space capabilities and services to the maximum extent possible, consistent with national security considerations and industrial development objectives; and
requires extensive consultation with all stakeholders (governments, industry, academia, international partners) during the planning, development and implementation of the Canadian Space Program.

2. Industry Development Policy: Recommendation 2

That the Government of Canada articulates a space industry development policy applicable to all departments and agencies that:

identifies technology development, flight demonstration of new technologies and applications, and space science programs as core activities of the Canadian Space Program and ensures a minimum of 25% of the A-base budget of the CSA is allocated to these areas;
encourages technology and applications development and demonstration in a broad range of commercially-viable applications in addition to those supporting the needs of government;
ensures all government space system procurements, grants and contributions are supportive, to the maximum extent possible, of the development of an indigenous, internationally competitive space services and manufacturing industry;
ensures, to the maximum extent possible, that government-funded space R&D is conducted in industry with the support of Canadian academia as appropriate; and
ensures relevant regulations (e.g. data policy regulations, regulatory fees, and ownership restrictions, etc.) support the development of the Canadian space services industry.

Figure 6 from the Space Working Group report.Figure 6 from the Space Working Group report. It should be noted that since the OECD report was released the U.K. recently outlined an aggressive plan for its space program and a major boost to its civil space budget which will put it ahead of Canada.

3. Procurement Policy: Recommendation 3

That the Government of Canada adopts space program procurement policies that:

recognize industry development as a specific goal in both civilian and military procurements;
promotes industry competitiveness by acting as the "first-user" or "first-buyer" of innovative Canadian technologies;
encourage competition only in cases where competition will aid the development of a competitive industry;
require contract recipients to implement contracts in a manner that supports the industrial development objectives of the government;
are based on a statement of objectives and high-level functional requirements (as opposed to detailed specifications);
use international competitiveness of a bidder and its ability to bring these technologies into a wider export market as one selection criteria;
are flexible in order to accommodate the schedule and financial needs of commercial suppliers and in order to respond to narrow-time-frame opportunities; and
are timely.

4. Management of the Canadian Space Program: Recommendation 4

That the Government of Canada reviews the management and priorities of the Canadian Space Program with a view to ensuring:

the planning and management of the program reflects a whole-of-government approach;
space program decisions are taken at the national level, reflecting national priorities;
effective coordination of the civilian and military space programs in order to maximize industrial development;
existing budgets and priorities are appropriately aligned; and
expenditures in industry are maximized.

The Aerospace Review has done its job well. It consulted a broad representative group from coast-to-coast and internationally, and collected and digested an enormous volume of information. The next step is up to the government as all interested parties, domestic and foreign, keep watch for a reaction and guidance.


SpaceRef will have a more detailed analysis available in the next issue of our magazine Space Quarterly which is being released next week. Please subscribe.

References - Reports:

- The Aerospace Review Report - Volume 1 - Aerospace
- The Aerospace Review Report - Volume 2 - Space
- The Space Working Group Report
- The Technology Development, Demonstration and Commercialization Working Group Report
- The Market Access and Market Development Working Group Report
- The Aerospace-Related Public Procurement Working Group Report
- The People and Skills Working Group Report
- The Small Business and Supply Chain Development Working Group Report - Part 1 Small Business
- The Small Business and Supply Chain Development Working Group Report - Part 2 Supply Chain

References - Research Reports:

- International Overview of Space Governance and Policies for the Canadian Aerospace Review, by Euroconsult
- The State of the Canadian Space Sector, by Hickling Arthurs Low
- A Report on the Development of a National Space Infrastructure to Support the Global Competitiveness of the Canadian Space Industry, by Lansdowne Technologies Inc.
- Canada's Space Sector: The Essential Enabler of Canada's Northern Strategy, by Norstrat Consulting

References - Other

* Michael M. Atkinson, William D. Coleman, Obstacles to organizational change: the creation of the Canadian Space Agency (1.6MB PDF), Canadian Public Administration / Administration Publique du Canada, Volume 36, NO. 2 (Summer/Ete), pp. 129-152.

References - News Articles:

- Aerospace Review in Full Swing
- Space Sector Gains Visibility as the Government Releases Details of the Review of Aerospace and Space Programs and Policies
- Harper Government to Review Aerospace Policy and Programs

Updated Nov. 30, 9:47 am ET.