Ruling on sale of Radarsat-2, Canadarm to U.S. arms maker delayed

The federal government is taking an extra 30 days before it makes a decision on the controversial proposed sale of the Radarsat-2 and the Canadarm technology to a U.S.-based arms maker.

The federal government is taking an extra 30 days before it makes a decision on the controversial proposed sale of the Radarsat-2 and the Canadarm technology to a U.S.-based arms maker.

Industry Minister Jim Prentice informed U.S.-based weapons and rocket manufacturer Alliant Techsystems, or ATK, on Thursday that he wouldn't meet the Saturday deadline to approve or reject the company's plan to acquire the satellite and space businesses of Richmond, B.C.,-based MacDonald, Dettwiler and Associates Ltd., or MDA.

Prentice had until Saturday to review the $1.3-billion deal under rules of the Investment Canada Act.

Critics of the sale, including former Canadian Space Agency head Marc Garneau, had called on Prentice to block the deal, arguing it handed over taxpayer-funded technology and, in the case of Radarsat-2, gave away technology designed to protect Canada's sovereignty.

Steven Staples, president of advocacy group the Rideau Institute and a critic of the deal, said Thursday the government's decision to extend the deadline is a good start.

"My view is the government is beginning to wake up to the impact of the sale on Canadian sovereignty," he said at a news conference alongside representatives of the Canadian Auto Workers.

Liberal and NDP representatives of a house committee discussing the proposed sale had urged Prentice to extend the deadline to give more people an opportunity to speak about the issue. Prentice, Garneau and MDA employee Hugh Thompson had already appeared before the committee.

ATK senior vice-president of communications Brian Cullin said in a statement to CBC News Thursday that his company was open to appearing before the committee if that was the government's wish.

'Strong case'

"ATK remains committed to full co-operation in a comprehensive [Investment Canada Act] process and we're presenting on the facts of this acquisition to the Canadian government," he said.

"We believe we will be able to make a strong case that this is a net benefit to Canada."

MDA declined to comment on the government's decision and did not say whether it would appear before the committee.

Last week, the company's shareholders overwhelmingly approved the proposed sale to ATK.

MDA is Canada's largest space technology firm but has decided to focus on its faster-growing information products business, which serves the property market with specialized mapping products.

The sale has raised concerns in part because of ATK's weapons business. The company derives more than half its $4-billion US in annual revenue from military contracts for items including cluster bombs, depleted uranium rounds and landmines.

Two MDA employees have quit the company in protest over the proposed sale.

Thompson, a spacecraft systems engineer at MDA, told the house committee two weeks ago he did not want to work for ATK.

"I do not want to be associated with a company doing this work," Thompson told the committee. "I cannot and will not work for ATK."

Larger concern

But the larger concern for some is handing over control of the Radarsat-2 satellite to a company outside Canada.

Radarsat-2 was launched in December and hailed by government, space and military officials as a tool to protect Canada's Arctic sovereignty. The satellite is capable of peering through cloud cover and darkness to detect objects at resolutions of up to three metres.

Under a deal between MDA and the government — which contributed $430 million to the project through the Canadian Space Agency — MDA owns the satellite and can generate revenues from commercial contracts with other nations, while federal government departments in turn will be able to access information from the satellite at no cost.

Critics have questioned whether or not Canada's access to that data would remain if the satellite was sold to a U.S.-based firm.

Cullin told CBC News ATK will honour MDA's agreements with Canada and provide the same access to imagery that they have with Radarsat under Canadian ownership.

"The conditions for preserving Canadian government access to the satellite in events of an emergent event or issues of national security will be retained intact with the same guidelines that currently exist," he said. "There's no nuancing to that. That is absolutely something we have agreed to."

With files from the Canadian Press