The Canadian Space Agency’s serious budget limitations are hurting the Canadian economy and are harming Canada’s future in space

© SpaceRef/CSA/Liberal Party

TORONTO ON, November 2016 – With the first year of the new Liberal government in the rearview mirror, Students for the Exploration and Development of Space Canada (SEDS-Canada) would like to take the opportunity to respond to the Canadian Space Agency’s serious budget limitations, which are causing a drain on the Canadian economy and are harming Canada’s future in space. The new federal government should comply with the 2012 Aerospace Review, which recommended stabilization of overall CSA funding in real dollars. Increasing CSA funding would help to renew interest and activity in the lagging Canadian space sector. Historically, a well-funded space sector has generated improvements in the quality of life of all Canadians. When satellite-augmented devices became widespread they changed how Canadians communicated, participated in the economy, responded to natural disasters, and enjoy their leisure. A large part of this contribution comes from access to satellite communications networks and to the global positioning system (GPS). The benefits of living in the space age have become so pervasive that their creation and support has been taken for granted, but the investments required to sustain these public goods and to invent new ones require support from the Canadian government. Yet the Canadian government has chosen to tightly limit the CSA’s budget from 2016 to 2019, as shown in the figure below. This act is painful to those already established in the Canadian space sector and it is effectively pulling up the ladder on young Canadians eager to find a job, pursue advanced degrees, start businesses, or attend conferences in the space sector.

adam-svatos-csa-budget-chartData sourced from the CSA’s 2016-2017 Report on Plans and Priorities (RPP)

CSA spending produces high returns to the canadian economy

An article written in 2015 by Samuel Baltz and published by SEDS-Canada points out that the impact of the space sector on the Canadian economy is considerable:

“The Canadian space sector generates $3.5 billion every year, employing over 8,200 Canadians. Our overall aerospace sector generates $30 billion annually, and employs over 150,000 Canadians. But public investment in the space sector is tiny: the Canadian Space Agency’s $300 million budget, set in 1999, was about 0.1% of the most recent budget. This stagnant funding, falling far behind inflation, is in stark contrast with the local importance and global growth of space: according to theSpace Foundation, “the global space economy grew by 4% in 2013, reaching a new record of $314.17 billion.”

In fact, a 2002 article in the Journal of Technology Transfer estimated that the CSA’s investment in space exploration returned to the Canadian economy at a rate of $4 for every $1 spent. We can compare this to another government program: the scientific research and experimental development (SR&ED) tax credit. Broadly speaking, this tax credit allows companies to write off a percentage of their labour and capital costs if they were spent on R&D. According to a government consultation paper from 2007, this program costs about 3 billion dollars per year, or roughly ten times more than the CSA’s budget in either 2017-2018 or 2018-2019, and returns to the Canadian economy at a ratio of only $1.11 for every dollar spent on it.

How Canadians lost their space telescope

Even though the return to the Canadian economy is exceptionally high, funding for the CSA,  excluding additional earmarks for special projects, has remained at $300 million since 1999. With its purchasing power eroding through inflation, the CSA has been forced into uncomfortable situations. For example, it may be surprising to most readers that Canada has a space telescope. The Microvariability and Oscillations of Stars (MOST) space telescope was launched in 2003 and has been used to study over five thousand stars and a few exoplanets, even discovering a “super Earth” in a nearby solar system in 2011. In 2014 the CSA was forced to withdraw funding to continue operating MOST even though it was fully operational and scientifically productive. This decision, not reversed in the 2016-2017 budget, closed the door on Canadian students who wanted to continue to use MOST to study our universe, share their findings, and earn an advanced degree in the sciences.

Falling behind: Canadian students finding it harder to participate in the space sector

In this time of government cutbacks to the CSA, one might expect that the government is shuffling resources from the pure to the applied sciences. After all, the CSA stated in its 2016-17 RPP that it will “support the development of small satellites technology which will provide timely and cost effective responses to government needs”. While the CSA does provide the use of its facilities for the Canadian Satellite Design Challenge (CSDC), a competition between Canadian undergraduate teams to design, build, and test their own satellite, it does not financially support the teams. To support these students, who are doing work that is important to the national interests of Canada, the federal government should follow two recommendations suggested by the Canadian Space Commerce Association in its 2016 Pre-Budget Submission to the House of Commons Standing Committee on Finance.

  • An increase in funding to the Canadian Space Agency’s Space Technology Development Program.
  • … to fund the payload launch to orbit of the winners of three consecutive university led Canadian Satellite Design Challenges over a six year period.

The first recommendation is needed because the Space Technology Development Program was allocated only $22.5 million in the 2016-2017 budget, which is entirely inadequate for encouraging Canadian business and research in an area of the space sector that is poised to boom. There are currently over 1265 operating satellites in space, with plans to launch thousands of small satellites

By adopting the second recommendation, the CSA could provide an excellent incentive for participating Canadian students to unleash their ingenuity in the space sector by paying for the launches of the winners of this student challenge, at a cost of roughly $0.5 million per launched spacecraft every two years. Recall that the value created by investments in space sector research and development is about four to one.

Beyond those areas where spending is clearly justified by the return to the taxpayer, the 2016-2017 CSA budget comes up short in its support of increasing Canadian space expertise and proficiency, which it describes as “supporting research in private or public organizations and sustaining the development of highly qualified personnel in science and engineering”. The 2015 budget spent just $10.02 million on this important challenge, while the 2016 budget increases this only slightly to $10.07 million. The short-changing of Canadian students in the space sector has real effects. For example, the dissolution of the Canadian Foundation for the International Space University due to a lack of donations from the private sector. For twenty-eight years, this organization served as “Canada’s launch pad for tomorrow’s leaders” in the space sector. Normally, this organization would provide six to ten scholarships per year to students attending the ISU Space Studies Program – this year they will provide none.

By limiting the CSA to a core budget of $300 million per year without accounting for inflation, the government has forced the CSA to make cuts that fall disproportionately on new entrants into the space sector. New students find themselves worse off than their older peers. It is harder to find a job or internship and to pursue an advanced degree on CSA-funded research or instruments. In recent years, the CSA has failed to incentivize students to pursue opportunities in the space sector by not financially supporting initiatives like the Canadian Satellite Design Challenge or funding scholarships to professional development programs like the International Space University Space Studies Program.

The economic arguments are sound and the moral responsibility is clear. To allow Canadian students and workers to have the same opportunities as their predecessors, the new federal government should accept the 2012 Aerospace Review, which recommended stabilization of overall CSA funding in real dollars. This will help to renew interest and activity in the lagging Canadian space sector. A vibrant and productive space sector generates economic growth, scientific advances, and new technologies that improve the quality of life of all Canadians and are necessary for Canada to thrive in the Space Age. It is SEDS-Canada’s hope that the revitalised Canadian Space Advisory Board’s new space strategy, to be launched in June 2017 as explained by Innovation Science and Economic Development Canada (ISED) Minister Bains, will follow the aforementioned recommendations.

Adam Ladislav Svatos, PAC Member |
Simon Molgat-Laurin, Director of Advocacy |

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