Prentice defends decision to block MDA sale

Praxius

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Dec 18, 2007
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Industry Minister Jim Prentice responds to a question during question period in the House of Commons in Ottawa on Thursday, April 10, 2008.

http://www.ctv.ca/servlet/ArticleNe...0410/radarsat_sale_080410/20080410?hub=Canada

Industry Minister Jim Prentice is defending his decision to block the sale of Canada's largest space technology firm to an American arms maker, saying the proposed deal wouldn't provide net benefits to Canada.

Prentice has sent a formal rejection letter to Alliant Techsystems Inc. (ATK), a U.S. company that has been trying to purchase a division of MacDonald, Dettwiler and Associates, the Canadian firm responsible for the Radarsat 2 satellite, Canadarm, and the space robot Dextre.

Prentice said he told ATK the sale will not be allowed unless the company can offer new and compelling information.

"At this point I've made it very clear to ATK the transaction as proposed doesn't meet the net benefits test and it's certainly up to them to sit down with our officials and put for any proposals that they think are worthy," Prentice told reporters on Thursday.

ATK has 30 days following Prentice's preliminary decision to adjust their proposal.
Prentice said he looked at the case carefully before tentatively rejecting the deal.

"A lot of due diligence has been done," Prentice told CTV's Mike Duffy Live on Thursday. "A lot of work has been put into it and it's important that we welcome foreign investment to Canada, so a decision like this is a unique case that has to be dealt with carefully."

Alliant had offered US$1.325-billion for the purchase of the Vancouver-based MDA.

But the deal faced opposition from politicians, scientists, some MDA staff, and labour groups. Critics claimed Canada, which subsidized some of the company's projects, could lose access to its own technology and images for the Radarsat 2 satellite images in the future if the technology ended up under U.S. control.

Prentice told reporters he made his decision based on Section 20 of the Investment Canada Act, which requires the minister to review such transactions and ensure that Canada's best interests will be met.

While the Tories said the notice does not kill the sale to the American arms-maker, CTV parliamentary correspondent Roger Smith said judging from the strong language used by Prentice and the prime minister in the House of Commons, "it sounds like the deal is all but dead."

"(Prentice) is right out in front, saying the deal doesn't amount to a 'net benefit' to Canada," said Smith.

"It would be amazing for them to back down after that."

Smith added, however, the government is being careful to point out that this is not a sign that Canada is becoming protectionist, in case other American companies interpret this move as Canada being closed for business.

Support for the decision

The former head of the Canadian Space Agency, Marc Garneau, told CTV's Canada AM on Thursday that the government has made the "right decision in this case."

The former astronaut said Canadian taxpayers helped build MDA. He said the sale of some of its most prized technology would "mean that we would essentially be back at square one in terms of trying to rebuild the capability that took us decades to (develop)."

NDP industry critic Peggy Nash said it is the first time Canada has ever blocked the sale of a domestic firm to a foreign buyer -- and she agrees with the decision.

"We believe the minister has made the right call here," she told CTV Newsnet.

Some proponents of the deal had said the sale of MDA to an American company would have saved jobs by allowing its current staff to work on new U.S. defence projects.

But critics pointed out that such contracts would be classified and could have meant that Canada would lose access to the results of years of research and funding.

U.S. opposition

On Thursday afternoon, former U.S. defence secretary William Cohen offered his opinion, siding with the U.S. company. Cohen, who served under president Bill Clinton from 1997 until 2001, said there are ways to address Canadian concerns. He also noted that some concerns were more emotional than substantive.

International trade lawyer John Boscariol told Mike Duffy Live that if Prentice permanently blocks the sale, legal experts will be poring over law books to determine whether his actions were legally justified.

Yeah I remember what they said, claiming that if the US bought out this technology that we'd still have acess to Radarsat 2 just as they currently have acess to it... but the big difference is that we control what it does and when it does it. The US asks us for shots from it, we determine if they are justified and then proceed. Without this, they could use the Radarsat 2 to check anything they wanted, whenever they wanted, wherever they wanted and the paticular thing about Radarsat 2 is that it is made with our technology and uses such things as image capturing through clouds and a slew of other things.

Sorry, but I don't want any other forign country in control of our national defences and at the same time them being able to use them for whatever they wish.
 

Walter

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Jan 28, 2007
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Lost in space

Terence Corcoran, National Post Published: Friday, April 11, 2008
Backed by the usual nationalist suspects -- i.e., out-of-office Liberals, unions, special interests, Canada Research Chair profs, the Toronto Star, even a National Post columnist -- the Harper Tories appear set to relaunch Canada's space rocket.
That's just a metaphor, of course. Canada has never had any rockets for space work. It also has never had much of a space program to speak of, outside the Canadarm, a $1.4-billion contribution to the U.S. space station that, while a source of pride to Canadians who respond to collectivist icons, will disappear as a meaningful space venture when the U.S. space station program comes to an end soon.
Then there's the Canadian Space Agency. Starved of cash and drained of motivation by the Liberals, the CSA dried up as a source of funds and creative energy more than a decade ago, largely under the neglectful eye of the Chretien government.
But now comes Jim Prentice, Tory Industry Minister, with what is shaping up to be a plan to get the government of Canada back into the space game. What he may also do at the same time, however, is bury the shareholders and private enterprise players who have given Canada the only genuine space outfit it has: the space systems group of Mac-Donald, Dettwiler and Associates (MDA), of Vancouver.
MDA plans to sell the system group to Alliant Techsystems of Edina, Minn., for $1.3-billion, a price that would deliver a big payoff for MDA shareholders. But in a move that knocked $160-million off shareholders' value in MDA yesterday, Mr. Prentice fired off a potentially deal-killing letter to Alliant. In a classic 1970s-style Canadian government stealth missile, Mr. Prentice tells Alliant that "I am not satisfied that your investment is likely to be of net benefit to Canada."
Note the first person power trip. Quoting language from the Investment Canada Act, Mr. Prentice then ties the company up in legal circuitry. Alliant, Mr. Prentice told the company, has 30 days to "make representations and submit undertakings." What kind of undertakings? The ego doesn't say. "At the end of this time period, I will notify you forthwith that I am satisfied that your investment is of net benefit to Canada or confirm that I am not satisfied that it is of net benefit."
We can only assume that when Mr. Prentice adds up the net benefit to Canada, he is taking into account the $1.3-billion in value that Alliant will transfer from Minnesota to the largely Canadian shareholders of MDA, including many MDA employees. That money would be in the pockets and treasuries of Canadians who could --as MDA certainly plans --invest in other business ventures that bring even greater benefit to Canada's economy.
Given the history of the Alliant-MDA takeover bid, however, it is not likely Mr. Prentice has investors at the top of his mind. From the very day Alliant announced the $1.3-billion bid, the voices of nationalist doom rose over the transaction.
First came concern that the revered Canadarm, symbol of national space prowess, was going to end up in U.S. corporate hands. That lasted a few days, before the realization that the Canadarm isn't worth anything as the U.S. kills its space station program.
With no traction on the Canadarm, Buzz Hargrove's Canadian Auto Workers -- which represents MDA workers -- cooked up a moral case against the takeover. Alliant also made land mines. How could Canada, world anti-land-mine crusader, tolerate a such a corporate monster? The CAW even managed to plant a story about a possible "revolt" among MDA employees, although only one made the news. "There's no way I would work for them," said Paul Cottle, a 31-year-old engineer who worked on satellite systems at MDA.
That story fizzled, and Mr. Cottle was soon replaced by bigger guns who fired up what has become the major focus of the MDA takeover fight:Radarsat 2. Lining up to protect Radarsat as a national treasure that cannot possibly be sold to Americans we find Michael Byers, Canada Research Chair in Global Politics at UBC; Marc Garneau, former astronaut and Liberal candidate; Scott Brison, Liberal industry critic; the Toronto Star; John Polanyi, Nobel laureate and Univerity of Toronto professor.
Launched this year, Radarsat 2 is reputedly something of a miracle, a high-tech eye in the sky that can record and send images of the Earth back from space, at a scale as fine as three metres. The commercial, military and practical uses of the technology are apparently vast --and lucrative.
The glue that holds the Radarsat story together as propaganda is a conceptual fabrication that each of our celebrity activists foisted on Canadians. They claim that Radarsat was funded with $485-million in government money. They call it "an investment" by the government, a "taxpayer paid" satellite. As Mr. Byers slyly put it, the government actually paid for "85% of the total cost of the satellite."
But the government didn't actually pay for the satellite. Radarsat 2 is controlled by MDA, which put it up under its own effort, orchestrating complex rocket deals and other schemes far from the role of government.
The government of Canada paid $445-million for priority rights to satellite images over a period of many years into the future. It was an advance on the product, not an investment in the satellite. The satellite is a private, commercial satellite service that collects revenues from many governments all over the world. It is, in fact, a great private-sector space success story. MDA developed the satellite, moreover, when it was controlled by another American company, Orbital. Why did the CAW not object to U.S. ownership in 1998?
If MDA's satellite systems were sold to Alliant, Alliant could use its U.S. base to sell products to U.S. buyers, thus expanding the company's Vancouver-based core of satellite expertise.
But Mr. Prentice apparently has a better idea. We don't know what that idea is, but he appears to be preparing to get the government back in the space business. Will the MDA satellite system -- and MDA shareholders --pay the price?
 

Praxius

Mass'Debater
Dec 18, 2007
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In a classic 1970s-style Canadian government stealth missile, Mr. Prentice tells Alliant that "I am not satisfied that your investment is likely to be of net benefit to Canada."

Note the first person power trip. Quoting language from the Investment Canada Act, Mr. Prentice then ties the company up in legal circuitry. Alliant, Mr. Prentice told the company, has 30 days to "make representations and submit undertakings." What kind of undertakings? The ego doesn't say. "At the end of this time period, I will notify you forthwith that I am satisfied that your investment is of net benefit to Canada or confirm that I am not satisfied that it is of net benefit."

We can only assume that when Mr. Prentice adds up the net benefit to Canada, he is taking into account the $1.3-billion in value that Alliant will transfer from Minnesota to the largely Canadian shareholders of MDA, including many MDA employees. That money would be in the pockets and treasuries of Canadians who could --as MDA certainly plans --invest in other business ventures that bring even greater benefit to Canada's economy.

That was quite the short-sighted view on the matter.... Oh.. we're getting some money and the potiential of more business to come our way. Whoopie doo.... We're already have a large potiential of more investments and businesses to come our way.

And money isn't always the final answer to a problem. Canada's Best interests are the security and protection of our nation and our technology.... money is secondary to that, and if it isn't... well get me my catapult cuz we're gonna have a few politicians shot into the ocean.

With no traction on the Canadarm, Buzz Hargrove's Canadian Auto Workers -- which represents MDA workers -- cooked up a moral case against the takeover. Alliant also made land mines. How could Canada, world anti-land-mine crusader, tolerate a such a corporate monster?

Well it's true and it doesn't make any sense... it's not just a moral situation, but a common sense situation. How would other countries deal with us if we were so contradicting on our nation's principles? You hear plenty about other countries who "Support Terrorism" well most in Canada feel Landmines are not all that great a weapon and cause more harm to civilians then whom they're ment for.... so why should we be making deals with a US based company which makes them?

In fact, why would an arms dealer want our technology except to put into new weapons? Come on people.... put two and two together.

Launched this year, Radarsat 2 is reputedly something of a miracle, a high-tech eye in the sky that can record and send images of the Earth back from space, at a scale as fine as three metres. The commercial, military and practical uses of the technology are apparently vast --and lucrative.

And so why would we want to sell this for a cheap 1.3 billion? We just got the damn thing and now the US wants to buy it out from under us.... technology which also has tax payer's dollars put into it as well.

The glue that holds the Radarsat story together as propaganda is a conceptual fabrication that each of our celebrity activists foisted on Canadians. They claim that Radarsat was funded with $485-million in government money. They call it "an investment" by the government, a "taxpayer paid" satellite. As Mr. Byers slyly put it, the government actually paid for "85% of the total cost of the satellite."

But the government didn't actually pay for the satellite. Radarsat 2 is controlled by MDA, which put it up under its own effort, orchestrating complex rocket deals and other schemes far from the role of government.

The government of Canada paid $445-million for priority rights to satellite images over a period of many years into the future. It was an advance on the product, not an investment in the satellite.

Irrelevent... tax payer's money went into it... if it was sold to the US and then the US decided to d*ck us around and then we're restricted on that access, then that tax money would have gone to nothing, and then guess who is held liable for that waste of our money? The Government... and who will take the fall? The same people who made the smart idea to block the deal.... hince the deal does not benifit Canada, nor would it have any of our interests at play.

Keeping the technology in our hands doesn't hurt our interests, it protects them. Selling the tech opens the door for losing any benifits we already put money into. The RadarSat 2 is bran-friggin new. I can see perhaps selling it in a few years when the money put in has given us some benifit, but not right after we just got the damn thing.

That's like Canada going to the US and saying "Hey! Here's a few billion dollars, give us your nuclear sub specs." ~ The US would be completely stupid to do that, and we'd be stupid to do this.