Industry Minister Jim Prentice says he will proceed with his earlier decision to block the foreign takeover of Canada's premier space technology firm.
In a news release early Friday, Prentice said the sale would not benefit Canada.
"I have confirmed my initial decision that I am not satisfied that ATK's proposed acquisition of the Information Systems Business of MDA would likely be of net benefit to Canada. I reached this decision after an extensive and rigorous review process," Prentice said.
He said the Investment Canada Act bars him from approving a transaction that doesn't demonstrate net benefit to the country.
The decision means Alliant Techsystems Inc.'s $1.3 billion attempt to take over the space division of Vancouver's MacDonald, Dettwiler and Associates, will not go forward.
Prentice first turned down the deal last month, saying ATK would have a 30-day period to argue the preliminary decision.
However, at the time all signs indicated the decision was final, with Prentice saying the key reason for his decision was the Radarsat-2 satellite, an Earth observation satellite built in partnership with the Canadian government.
Radarsat-2 has national sovereignty implications as it can allow the monitoring of surface ships sailing in the Arctic.
The federal government directed $445 million in contracts to MDA to help fund the development of the satellite and selling MDA to a foreign firm would have made the satellite subject to another country's legal system.
As a result, Canada could have lost access to the technology which was largely funded by taxpayers' dollars.
MDA is also responsible for designing and building the Canadarm and Dextre devices, which are currently being used at the International Space Station.
MDA had expressed concerns that if the sale were to be blocked, the company could be penalized by being banned from bidding on U.S. defence contracts -- which account for 81 per cent of the world's space spending.
But Prentice said MDA will remain in Canadian hands and the company will continue to be a vital part of the nation's space future.