Budget 2013 – Space Sector: Please Hold a Little Longer

The government is pretty much in status quo mode after delivering today’s budget, at least for the space sector. The message was simple, we’re examining the recommendations of the Aerospace Review and we’ll get back to you.

Here’s the official quotes:

The Government is carefully reviewing the advice of the Aerospace Review, and will take action over the coming year to improve the focus and coordination of programs and practices of relevance to the aerospace and space sectors.

And referring specifically to the space sector:

The Government is reviewing its policies and programs specific to the space sector
to better support Canada’s space capabilities.

And further down:

The Aerospace Review has made important recommendations with respect to policies and programs specific to the space sector. The Government is currently examining these recommendations carefully.

What this means is that we still don’t know when work might start on a long-term space plan. Nor do know if or when the creation of a Canadian Space Advisory Council or a new deputy minister-level Space Program Management Board might happen as recommended by the Aerospace Review.

However we did get some clues. Strategic plans, the Canadian Space Advisory Council and other relevant Aerospace Review recommendations were highlighted in one paragraph:

Strengthening Canada’s Space Capacity: Developing a series of strategic plans outlining the Government’s space priorities over the short, medium and long term; establishing a Canadian Space Advisory Council to advise the Government on the development of these plans; stabilizing the budget of the Canadian Space Agency over the next 10 years and establishing cost-sharing models to support the development of new space projects; and implementing measures to expand the level of space-related commercial activity in Canada.

This would suggest along with other statements mentioned above that some action can be expected in the next year.

What the budget did include was ongoing stable funding of $1 billion for the Strategic Aerospace and Defence Initiative (SADI) over five years but with little information on how the money will spent or how it will be distributed over five years. The government did include mention of companies who had received funding but they were all in the aero part of the aerospace sector.

Also announced was $110 million over four years starting in 2014-2015 for a new Aerospace Technology Demonstration Program (ATDP). After the initial four years $55 million will be allocated to the program.

According to budget the ATDP “program will support large-scale technology projects that exhibit strong commercialization potential and promote cross-industry collaboration, including simulation trials, systems integration testing and refinement activities. A component of the program will support research costs at post-secondary institutions that serve wider industry needs.

As well a portion of the funding for ATDP will come from SADI, up to $20 million annually as recommended by the Aerospace review.

Along with ATDP the government will begin consultations with stakeholders in the coming months for the creation of a National Aerospace Research and Technology Network which will be led by Industry Canada. The consultations are designed “to identify strategic technology areas and facilitate collaborative research and development“.

There was one mention of the Industrial and Regional Benefits program which was a hot topic of interest to space sector companies at the recent Commercial Space Resource Utilization Forum.

The Government endorses Mr. Jenkins’ proposal to use key industrial capabilities as a means of fully leveraging defence procurement projects to support economic opportunities for Canadians. A key opportunity for doing so is by targeting, as estimated by Mr. Jenkins, the $49 billion in Industrial and Regional Benefits obligations that foreign prime contractors are expected to accumulate by 2027 to support high-skill and high-value opportunities and jobs in Canadian industries. These opportunities would be selected based on the needs of the Canadian Armed Forces, the potential to access global markets, and the potential for increasing investments in Canadian research and innovation. In addition, the Government will actively promote the significant export opportunities for Canadian-produced goods and services.

There will be one change to the Scientific Research and Experimental Development (SR&ED) program effective January 1, 2014 that forces claimants to provide more detailed information on about SR&ED program tax preparers and billing arrangements or face the possibility of a $1000 penalty.

In particular, in instances where one or more third parties have assisted with the preparation of a claim, the Business Number of each third party will be required, along with details about the billing arrangements including whether contingency fees were used and the amount of the fees payable. In instances where no third party was involved, the claimant will be required to certify that no third party assisted in any aspect of the preparation of the SR&ED program claim. This information will facilitate the identification of SR&ED program claims with a higher risk of non-compliance.

While the budget has some good news for the aero part of the aerospace sector, the space sector itself will have to wait a little while longer for government direction.

About Marc Boucher

Marc Boucher
Boucher is an entrepreneur, writer, editor & publisher. He is the founder of SpaceRef Canada Interactive Inc, CEO and co-founder of SpaceRef U.S., advisor and co-founder of the Canadian Space Commerce Association, and director and co-founder of MaxQ Accelerator Inc. Previously he was the founder of Maple Square, Canada's first internet directory and search engine which he sold.

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