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Evaluation report

Evaluation of the Canada/ESA Cooperation Agreement
PROJECT #04/05 02-02

Prepared by the
Audit, Evaluation and Review Directorate

November 2004

Executive summary
1.0 Background
2.0 Historical background
3.0 Cost and effectiveness of the agreement
4.0 Follow-up on recommendations of the 1997 evaluation report
5.0 Findings
6.0 Conclusions and recommendations
- 6.1 Conclusions
- 6.2 Recommendations
Appendix 1 - Collection and analysis of Canada/ESA cooperation agreement data
Appendix 2 - Information on ESA programs funded by Canada as an ESA member state
Appendix 3 - Executive summary of the audit of the management framework for the Canada/ESA cooperation agreement
Appendix 4 - Management action plan
Appendix 5 - Acronyms
Appendix 6 - Bibliography

Executive summary

Description of the Agreement

Canada has been working in cooperation with the European Space Agency (ESA) for 25 years. The first cooperation agreement was signed in 1978 and came into force on January 1, 1979 This cohabitation has benefited both partners, who share similar objectives. Canada is the only non-European country with cooperating member status that participates in ESA programs. One of the goals of these agreements is to open up the European market to Canadian companies in the Earth Observation, Satellite Communications and Space Exploration sectors.

Under the terms and conditions of the latest Canada/ESA Cooperation Agreement (the "Agreement"), Canada is committed to contributing financially to the general budget, except for costs related to the Scientific Program and Technological Research Programs (TRP), at 50% of the GNP-based rate. Canada may also choose to contribute to optional programs. These optional programs are described in Appendix 2. The value of contracts awarded to Canadian companies is proportional to Canada's financial contribution.

When the Agreement was renewed in 2000, Canada planned to concentrate on the Satellite Communications and Earth Observation programs and invest in the field of satellite navigation and positioning. The ceiling on contributions under the Agreement is set at $30 million per year for 10 years.

The main objectives of Canada's participation in ESA programs, as set out in the terms and conditions of the submission to Treasury Board (TB) are the following:

Diversify international partnerships;
Support implementation of the Canadian Space Plan;
Develop and demonstrate advanced technology systems;
Sustain the competitiveness of Canadian space industry;
Position Canadian space companies, most of which are small- and medium-sized enterprises (SMEs), with large European prime contractors;
Facilitate strategic alliances between Canadian and European companies;
Obtain timely information about emerging European technologies;
Encourage the two-way transfer of technology.

BACKGROUND TO THE EVALUATION

In March 2000, Treasury Board (TB) approved the renewal of the Canada/ESA Cooperation Agreement. In June 2000, TB issued a new policy on transfer payments that required that a results-based management and accountability framework (RMAF) be implemented for every grants and contributions program. The new policy also provided that grants and contributions programs renewed before the coming into force of this policy would have to be resubmitted to TB by March 31, 2005. Another provision of the policy required that a program evaluation be carried out for each and every program. For these reasons, we conducted a formative evaluation of the Agreement.

SCOPE OF THE EVALUATION

The evaluation was designed to determine the following:

1. To what extent does the Agreement meet industry, technological and political objectives set out in the TB submission?
- What were the results achieved for the period under evaluation?
- What adjustments should the CSA make to meet its program objectives?
2. How did the CSA take action to respond to the recommendations made in the 1997 evaluation?
3. What parts of the program need to be improved?
4. What alternative means could be used to open up European markets and reap similar benefits?

The evaluation covers program expenditures from 1997 to 2003, continuing on from the 1997 evaluation, which covered the period from 1979 to 1996.

METHODOLOGY AND LIMITATIONS

The evaluation was carried out in compliance with the CSA's usual evaluation methods and procedures and according to the general guidelines issued by the Treasury Board Secretariat. The process was intended to be associative; to this end, facts were validated with all interested parties.

We conducted a literature review, analysed data compiled by ESA and forwarded to the CSA and interviewed the program's managers. These preliminary studies helped us to define our evaluation framework. We reviewed the recommendations made in the 1997 evaluation to follow up on them and assess the degree to which they were implemented.

The CSA sent a questionnaire to 29 businesses, not-for-profit research organizations and government departments that had received several ESA contracts. We then contacted the designated representatives of these organizations and interviewed them by telephone or at their offices. Complementary data were obtained from the CSA and departments whose dealings with the stakeholders concerned were considered relevant to the evaluation. It should be noted that all information compiled for the report that pertained to businesses was kept confidential and cannot be taken individually or used for any purpose other than this study. Thus, in certain cases, in order to maintain this level of confidentiality, the authors were unable to give more detailed explanations or carry out more in-depth analyses of the results.

These methods were used to compensate for the lack of results regarding certain aspects of the Agreement. We also diversified the data sources, which included the CSA, ESA and past studies, in order to ensure greater data integrity.

One of the characteristics of the space industry is the rapid pace of change in this environment. Companies are continually merging or going out of business. Positions of the CSA, ESA, the EU and governments are always in flux. Strategies are not fully defined, and the close relationship between ESA and the EU is changing the environment in the European market.

ECONOMIC ENVIRONMENT

The Canadian space industry comprises approximately 195 private enterprises employing nearly 5,800 people. The Satellite Communications sector dominated all other space industry sectors in Canada. Despite their strengths, Canadian space companies are relatively small players compared with their European competitors and are facing serious challenges. The Canadian space industry counts on the Government of Canada to help it open up foreign markets and maintain jobs in the sector. It must rely on its strengths and forge strategic alliances among Canadian companies to build the critical mass needed to take on major projects and become principal contractor for ESA contracts. In this environment in which foreign markets are becoming increasingly difficult to penetrate, the Government of Canada will have to maintain its participation in these international programs to keep Canada's space industry healthy and open up foreign markets.

RESULTS

The total cost of the Agreement for the period from 1997 to 2003 was $166.64 million. Canada, like ESA member states, commits to a percentage when it announces its intention to take part in a given ESA program. Fluctuations in exchange rates, inflation, delays in implementation schedules and changes in the scope of projects under one particular program are some of the factors that affected the availability of funds relating to Canadian participation in ESA programs.

Fluctuations in exchange rates are difficult to predict, and the CSA must plan accordingly to mitigate the risks of these fluctuations, which affect total costs and the availability of funds for the Agreement.

Several technologies and skills have been developed and improved through the participation of Canadian companies in ESA programs. Some businesses have integrated these technologies into products that they were then able to sell in markets other than European ones. Our surveys of businesses showed that the economic spin-offs totalled $128.3 million, a return of 1.27 times the amount invested. In addition to generating revenues, the development and improvement of space technologies also created or maintained specialized jobs. Our surveys of ESA contract recipients showed that the Agreement generated an average of 100 person-years throughout the terms of the direct contracts. An estimated 75 person-years of employment were created by the sales of goods and services ensuing from ESA contracts.

These results are relatively good, given the following factors:

The ratio approaches those observed in other studies carried out using different methodologies in the United States, Europe and Canada. Results for those studies showed a ratio between 2.7 and 4.9.
In the space industry, it takes several years for a technology to progress from the development stage to commercialization, and many companies stand to reap substantial revenues in the future.
Some contracts awarded to Canadian companies in the Space Science sector do not necessarily result in sales of goods or services.
It was difficult to collect complete data for a seven-year period, given the time that has elapsed since. Corporate memory was often no longer present, and data were not always available. It would have been more efficient to collect these data gradually on a yearly basis.
Some indirect revenues from these contracts involve the telecommunications market. This market suffered a significant downturn in 2001, and companies in that field were affected by the slump. The economic environment thus had an impact on the results obtained during the period of the Agreement under evaluation.

There is a consensus to the effect that the program is generally beneficial in terms of opening up the European market and developing business relationships. For some companies, the recognition they gained for developing technologies under the Agreement helped open up markets in South America, China and India.

This cooperation has promoted the establishment of alliances and closer ties between Canadian and European corporations. It has allowed companies on both sides of the Atlantic to learn more about their respective commercial practices and business cultures. Canada's industrial return has been consistently satisfactory for optional programs but was quite low for activities under the general budget during the 1990s. Corrective measures have been taken, and the industrial return has since improved. As of December 31, 2003, the return was $1.11 for each dollar invested in ESA, less administrative costs. At that date, Canada ranked second among all countries with an overall return coefficient over 1.0.

In the field of earth observation, the experience Canada gained through the ERS program facilitated the development and operation of RADARSAT-1 and helped Canada to develop industrial capabilities in this field. The experience acquired by Canada through these programs contributed to the quality of the ENVISAT program and contributed to the development of RADARSAT-2.

The total value of contracts awarded by ESA to Canadian companies breaks down as follows: companies received 80%, while government departments and agencies, not-for-profit organizations and universities together shared 20%. Contrary to the data from the 1997 evaluation, industrial return was divided among a greater number of companies. In 1997, three major companies received nearly 78% of all contracts. From 1997 to 2003, 11 organizations received 78.8% of the contracts. Furthermore, the regional distribution of these contracts also shows a more balanced distribution of returns under the Agreement compared with 1997.

FOLLOW-UP ON RECOMMENDATIONS OF THE 1997 EVALUATION

When the program was evaluated in 1997, recommendations for improving its management and promoting the achievement of results were made. The recommendations addressed four subjects: program management and relations with ESA, industrial strategy, space cooperation alternatives and new opportunities for cooperation with ESA. Our discussions with program managers and a review of the documentation showed that measures have been taken to address some of the recommendations. In Section 4, we explain in detail how these recommendations were implemented and restate those recommendations that are still relevant today.

FINDINGS

Canada has a good reputation with the Europeans, as the 25 years of cooperation between ESA and Canada clearly demonstrate. Canadian companies have made a significant contribution to the many technologies developed in the areas of earth observation and satellite communications.

Participation in ESA contributes to the achievement of Canada's objectives for these two components of its space strategy. The $166.64 million spent to participate in ESA programs generates 1.27 times that value in economic spin-offs.

Several businesses have developed business relationships with Europe thanks to the Agreement, and all stakeholders in the program agree that these relations could continue, provided that Canada maintains it financial contribution to ESA. Canadian businesses have cultivated alliances with each other to benefit from or facilitate access to European markets through ESA programs under the Agreement.

Some not-for-profit organizations who participated in ESA optional programs have developed technologies that they then transferred to industry, such transfers being part of the objectives set out in their mandates. The same was true of the two main government departments that benefited from contracts. They handed over a large portion of these revenues to industry in the form of contracts awarded to Canadian SMEs. Their role is explained in more detail in the report on the collection and analysis of interview data.

Another of the Agreement's objectives was the diversification of international markets. This objective was achieved by virtue of the nature of business relations that Canadian companies have with Europe.

Canada's participation in ESA programs also allows it to take part in discussions during the meetings of various ESA decision-making and management committees. Canada has access to the same strategic information as ESA member states. Canada is given the opportunity to voice its opinion but acknowledges that it is a small player compared with European powers and has limited influence.

Canada has been in partnership with ESA for 25 years and encourages Canadian companies to take advantage of the many opportunities the Agreement offers for maintaining business ties with Europe. Canada is aware of impending changes and is attempting to negotiate agreements that will ensure the continuation of this fruitful cooperation that has benefited both Europe and Canada alike.

The management control framework of the Agreement has been audited, and an executive summary of the audit report can be found in Appendix 3. Recommendations concerning the management of this program were made. We recommend that readers refer to this audit report for more information.

When we conducted our interviews with companies, we asked about their opinion of the consultation process for choosing programs and about their views on the effectiveness of the process for disseminating/promoting information about optional programs. On the subject of the consultation process, 28% of respondents said they were satisfied, 32% had no opinion and 40% were dissatisfied. This topic is dealt with in more detail in the audit report. With regard to program promotion, 36% said they were satisfied, 12% had no opinion and 52% were dissatisfied. There is thus good reason to conclude that improvements will have to be made to these processes.

Canada has a good reputation in the space field among its European partners. The Agreement helps diversify and open markets and aids in the achievement of objectives under the Canadian Space Plan respecting earth observation, satellite communications and space exploration.

Most participants agree that additional funding is required to reap the benefits of the leverage effect that participation in ESA programs should create.

Several respondents mentioned the assistance they received from Canada's representative in their efforts to operate in European markets. This adviser on space programs also helped CSA program managers to administer the Agreement and attended ESA meetings to protect Canada's interests and advocate our country's point of view.

SMEs have difficulty taking part in ESA programs and require greater support, not only to access these markets, but also to develop expertise so that they can continue doing business in these markets after their initial participation in ESA programs.

Implementation of the recommendations made in our evaluation report will allow Agreement managers to carry out their duties more effectively, efficiently and economically, ensure compliance with policies and program terms and conditions, make informed decisions and measure the Agreement's performance for accountability purposes.

More specifically, the CSA should consider the following to improve efforts to achieve the Agreement's objectives:

ACHIEVEMENT OF AGREEMENT OBJECTIVES

The CSA should review the technology transfer objective, which is not being met, according to the information gathered from businesses.
The CSA should review its methods of helping the industry, especially SMEs, to penetrate the European market and thereby increase its competitiveness. This recommendation is linked to the one made in 1997.
The CSA should help Canadian industry to develop alliances with European partners to increase the chances of Canadian proposals being selected and of Canadian companies receiving ESA contracts.

To this end, the following actions should be taken:

Continue information sessions promoting ESA programs.
Increase programs that could offer flight opportunities to Canadian companies so as to increase the chances of commercializing Canadian products.
Ensure that information given to industry covers all relevant political aspects so as to allow companies to prepare tenders that meet the requirements of ESA calls for tenders. More specifically, this information should cover the Canada/ESA context of the program, funding, the European competition and the prime contractor likely to be chosen by ESA.
Identify and bring together Canadian firms interested in establishing domestic alliances or consortiums to prepare tenders for ESA calls for tenders.
Identify or organize trade missions in partnership with other agencies or departments to help Canadian SMEs commercialize their goods and services with view to marketing them to ESA and Europe.
Strengthen Canadian efforts and actions in Europe to promote and support companies that have submitted tenders to ESA.

TERMS AND CONDITIONS ACCORDING TO THE TB SUBMISSION

To meet the requirements under the terms and conditions of the Agreement, the CSA should implement a well-structured and transparent process for holding consultations with industry to support the selection of and promote optional programs.
Agreement managers should review the Results-Based Management and Accountability Framework (RMAF). The CSA should provide them with the resources they need to implement the RMAF so that information can be collected on a regular basis and ensure accountability for performance.
The CSA should use tests to verify the information it receives from ESA concerning contracts awarded to Canadian corporations so as to ensure that the data used to measure the performance of the Agreement are reliable.

COMPLIANCE WITH THE POLICY ON TRANSFER PAYMENTS

In consultation with TB, the CSA should implement a mechanism for mitigating the risks of exchange rate fluctuations and inflation.

MAINTAINING COOPERATION

The CSA should intensify its efforts to secure a cooperation agreement with the European Union that will ensure that Canada maintains a presence in European markets. The CSA should study the possibility of developing a program for companies that want to use the European Union's Sixth Framework Programme to penetrate the European market. The program should complement the existing Agreement.

1 BACKGROUND

In March 2000, Treasury Board (TB) approved the renewal of the Canada/ESA Cooperation Agreement (the "Agreement"). In June 2000, TB issued a new policy on transfer payments that requires that a results-based management and accountability framework (RMAF) be implemented for every grants and contributions program. The new policy also provided that grants and contributions programs renewed before the coming into force of this policy would have to be resubmitted to TB by March 31, 2005. Another provision of the policy required that a program evaluation be carried out for each and every program. For these reasons, we conducted a formative evaluation of the Agreement.

The evaluation was designed to determine the following:

1. To what extent does the Agreement meet industry, technological and political objectives set out in the TB submission?
- What were the results achieved for the period under evaluation?
- What adjustments should the CSA make to meet its program objectives?
2. How did the CSA take action to respond to the recommendations made in the 1997 evaluation?
3. What parts of the Agreement need to be improved?
4. What alternative agreements could be used to open up European markets and reap similar benefits?

1.1 APPROACH AND METHODOLOGY

Evaluation standards- The evaluation was carried out in compliance with the CSA's usual evaluation methods and procedures and according to the general guidelines issued by the Treasury Board Secretariat (TBS). The process was intended to be associative; to this end, facts were validated with all interested parties.

Evaluation period- The evaluation covers program expenditures from 1997 to 2003, continuing on from the 1997 evaluation, which covered the period from 1979 to 1996.

Data collection- We conducted a literature review, analysed data compiled by ESA and forwarded to the CSA and interviewed the program's managers. These preliminary studies helped us to define our evaluation framework.

Data collection instruments, interview guides and questionnaires were developed during this preliminary phase.

The evaluation framework includes the various questions that require answering before the grants and contributions program can be renewed.

Data analysis and synthesis- Data analysis was carried out in three steps: (i) a comparison of results with objectives, (ii) an audit of the management framework and the program's efficiency and (iii) a consideration of alternatives to the program. The results were compared with objectives to determine if the Agreement is on the right path to achieving them in the areas of technology transfer and development, investment returns and business networking.

Follow-up to the last evaluation- We reviewed the recommendations made in the 1997 evaluation to follow up on them and assess the degree to which they were implemented.

Report- Appendix 1 contains an executive summary of the report on the results of the collection and analysis of data obtained from beneficiaries of the Agreement regarding economic spin-offs, technologies developed or transferred and alliances forged. There is also an executive summary of the audit report on the Agreement's management control framework which can be found in Appendix 3. The full reports are available upon request.

1.2 LIMITATIONS

Collection of results

One of the difficulties encountered in collecting results data was that no such data existed for the development and transfer of technology and the creation of corporate alliances. In order to obtain data on these results, we had to design a questionnaire specific to this issue and carry out a survey of businesses in this field. It would have been easier to accumulate data on an ongoing basis, rather than collect them at the very end of a relatively long period of time, as we had to do. In some companies, those individuals who hold the company's corporate memory were no longer working there, or the data for the earliest years studied were unknown.

To minimize the impact of these constraints, we collected results from companies that still do business with ESA and those that received the most contracts. We also diversified the data sources, which included the CSA, ESA and past studies, in order to ensure greater data integrity.

1.3 METHODOLOGY FOR COLLECTING DATA FROM PROGRAM PARTICIPANTS

2 HISTORICAL BACKGROUND

Canada first started working with ESA in 1976. At that time, ESA contacted the Canada Centre for Remote Sensing (CCRS) about a possible agreement and also approached the Department of Telecommunications, which led Canada to pursue closer cooperation with ESA to counterbalance the preponderant influence of the United States in this field.

Canada has been working in cooperation with ESA for 25 years. The first agreement was signed in 1978 and came in to force on January 1, 1979. It was renewed in 1984, 1989 and 2000. This collaboration has benefited both partners, who share similar objectives. Canada is the only non-European country with cooperating member status that participates in ESA programs. One of the goals of these agreements is to open up the European market to Canadian companies in the earth observation, satellite communications and space exploration sectors.

Canada is committed to contributing financially to the general budget, except for costs related to the Scientific Program and Technological Research Programs (TRP), at 50% of the GNP-based rate. Canada may also choose to contribute to optional programs. These optional programs are described in Appendix 2. The value of contracts awarded to Canadian companies is proportional to Canada's financial contribution.

This principal is the foundation of all ESA member states' participation in the organization. ESA operates on a "geographical return" basis, which means that ESA awards contracts for space activities to industries in member states in amounts roughly equal to each country's respective contribution, less administrative costs. A fair industrial return on activities carried out would ideally have a value close to 1.

When the Agreement was renewed in 2000, Canada planned to concentrate on the Satellite Communications and Earth Observation programs and invest in the field of satellite navigation and positioning. The annual ceiling of contributions under the Agreement is set at $30 million for the next 10 years.

2.1 OBJECTIVES OF THE AGREEMENT

The main objectives of Canada's participation in ESA programs are set out in the submission to TB:

Diversify international partnerships;
Support implementation of the Canadian Space Plan;
Develop and demonstrate advanced technology systems;
Sustain the competitiveness of Canadian space industry;
Position Canadian space companies, most of which are small and medium enterprises, with large European prime contractors;
Facilitate strategic alliances between Canadian and European companies;
Obtain timely information about emerging European technologies;
Encourage the two-way transfer of technology.

2.2 CSA ACTIVITIES

During the period under evaluation, the Canadian Space Program (CSP) was divided into seven segments: Earth and Environment, Satellite Communications, Human Presence in Space, Space Science, Space Technology, the David Florida Laboratory and Coordination and Executive Services. The graph below shows a breakdown of expenditures by segment.

Source : Financial Management Report (FMR) 1997-2003

Although the CSA's budgets have remained constant, Canada has increased the number of optional programs in which it participates, thereby diluting its financial outlays. Canadian participation has fallen year over year compared with other ESA member states. The table on the following page shows Canada's contributions from 1991 to 1996.

For example, when ESA initiated the Olympus program in 1978, Canada was the third largest contributor to the program, investing $89.7 million, or 10% of the project's costs. Canada also invested $79.3 million in the ERS-1 program, which represented 6.1% of costs at Phase C/D of the project and 7.3% at Phase E. Today, Canada's participation in optional programs represents only 0.8% of ESA's total budget. The CSA invests nearly 10% of its overall budget in the Agreement. A breakdown of these funds by ESA program is shown in the following table:

TOTAL EXPENDITURES- CANADA/ESA COOPERATION PROGRAM ($ thousands)¹

Service line/program	1997- 1998	1998- 1999	1999- 2000	2000- 2001	2001- 2002	2002- 2003	2003- 2004	TOTAL
General budget
GENERAL BUDGET	5,498	6,045	6,335	4,976	4,812	6,088	5,451	39,205
GSTP	354	635			1,045	2,128	1,277	5,439
Sub-total - General budget	5,852	6,680	6,335	4,976	5,857	8,216	6,728	44,644
Earth observation
EOPP	1,237	1,788	1,680	1,273	1,081	1,393	838	9,291
ERS-02	3,551	1,938	1,514	412				7,415
POEM/ENVISAT	5,527	6,660	5,442	2,744	1,532	2,435	1,521	25,861
EOEP				3,160	3,534	6,072	3,766	16,532
Earth Watch - GMES						247	356	603
EOEP - Phase 2						838	2,552	3,390
TERRA SAR							171	171
Sub-total - Earth observation	10,315	10,386	8,636	7,589	6,147	10,985	9,204	63,262
Satellite communications
DRTM/ARTEMIS	590	212	275	1,076	38	120	95	2,405
ASTP	3,277	6						3,283
ARTES - old programs	4,358	4,523	7,826	4,381	4,572	6,884	3,047	35,591
ARTES 1 - PSI 4					24	102	91	217
ARTES 3 - Phase 3					165	978	7,531	8,674
ARTES 5 - Phase 4					256	1,054	1,506	2,816
GALILEOSAT DEFINITION				791	2,568	841	261	4,461
Subd-total - Satellite communications	8,225	4,741	8,101	6,248	7,622	9,978	12,531	57,446
Technology and exploration
Aurora						408	883	1,291
Sub-total - Tech & Exploration						408	883	1,291
Total	24,392	21,807	23,072	18,813	19,626	29,587	29,346	166,644
% of CSA expenditures	10.7%	6.4%	6.8%	5.9%	5.8%	9.0%	10.5%	7.7%
CSA expenditures	227,732	341,287	337,653	317,799	336,559	329,551	280,640	2,171,221
% of ESA expenditures	0.6%	0.5%	0.6%	0.4%	0.4%	0.5%	0.6%	0.5%
ESA expenditures(in euros) ²	6,641,700	6,756,000	6,944,200	7,066,000	7,453,000	8,893,000	7,998,000	51,751,9000

¹: Data provided by Finance - Corporate Management
²: ESA Annual Report, 1997-2003

2.3 CANADIAN INDUSTRY

Economic environment

The Canadian space industry comprises approximately 195 private enterprises employing nearly 5,800 people. In 2002, total revenues for the Canadian space sector were $1.8 billion, down 4% or $71 million compared with results for 2001. The drop in revenues in 2002 can be attributed in large part to a decline in export revenues. The fall in export revenues accounts for 94% of fluctuations affecting total space industry revenues ($67 million out of the total $71 million drop in revenues).

In 2002, the Satellite Communications sector dominated all other space industry sectors in Canada, generating 63% of all reported space revenues, or $1.13 billion. In 2001, this sector accounted for 67% of the industry's revenues.

The Earth Observation sector was ranked second, posting a modest 5.8% increase in revenues ($13 million) over figures for 2001. Earth observation activities produced 13% of total revenues. The Navigation sector experienced an increase in revenues of 6% ($10 million) compared with 2001 and accounted for 9% of total revenues.

Exports accounted for 40% of the space market, most of these exports being to the United States (46%). Revenues from exports to Europe represented 21% of the market, while the share for Asia was 10%. All other regions accounted for the remaining 23%. The domestic market was valued at $1.073 billion.

The top 30 Canadian companies in the space industry accounted for 98% of total revenues in this sector in 2002. ³

Despite their strengths, Canadian space companies are relatively small players compared with their European competitors and are facing serious challenges. The Canadian space industry counts on the Government of Canada to help it open up foreign markets and maintain jobs in the sector.

The Canadian space industry is also relatively small in comparison with other international players. It must rely on its strengths and forge strategic alliances among Canadian companies to build the critical mass needed to take on major projects and become principal contractor for ESA contracts. Such alliances are also required to increase Canadian industry's chances of receiving major contracts from ESA.

Apart from the Agreement, there is also an agreement between Canada and the European Union in Science and Technology that gives Canadian companies opportunities to access European markets. However, businesses must find financing in Canada to carry out these projects when they are awarded contracts.

In this environment in which foreign markets are becoming increasingly difficult to penetrate, the Government of Canada will have to maintain its participation in these programs to keep Canada's space industry healthy and to open up foreign markets.

³: State of the Canadian Space Sector 2002 (CSA)

3 COST AND EFFECTIVENESS OF THE AGREEMENT

3.1 COST OF THE CANADA/ESA COOPERATION AGREEMENT

The total cost of the Agreement for 1997 to 2003 was $166,644,000. A breakdown of the costs appears in Section 2.2.

Fluctuations in exchange rates, inflation, delays in implementation schedules and changes in the scope of projects under one particular program are some of the factors that affected the availability of funds relating to Canadian participation in ESA programs.

Exchange rates had a significant impact on Canada's participation in ESA programs. In recent years, exchange rates varied in different ways. The currency used changed several times between 1997 and 2003. From 1990 to 1996, the currency used to make payments was based on the AU (accounting unit) established by ESA, which was more or less equivalent to the European Currency Unit (ECU). From 1997 to 1999, ESA used the ECU, and Canada calculated its payments on this basis. Since 2000, the euro has been used by ESA member states. The following table shows fluctuations in exchange rates from 1990 to 2004.

Canadian Space Agency - Actual Expenditures 1997-2004

Another factor that can affect budgets under the Agreement is cost overruns. The optional programs to which Canada contributes are R&D envelope programs. Managers said that the envelope programs Canada takes part in are structured such that the established budgets and Canada's funding commitments cannot be exceeded.

3.2 INDUSTRIAL AND TECHNOLOGICAL BENEFITS

Several technologies and skills have been developed and improved through the participation of Canadian companies in ESA programs. Some businesses have integrated these technologies into products, allowing them to sell these products in markets other than European ones. Our surveys showed that the economic spin-offs totalled $128.3 million, a return of 1.27 times the amount invested. In addition to generating revenues, the development and improvement of space technologies also created or maintained specialized jobs. The following are a few examples of the technologies and skills in question:

Space Hardware Skills

Battery related skill sets (automated welding, high power DC testing, etc), RF/Digital electronics skill enhancements (ASIC & FPGA programming, RF modeling/simulation), high-speed modulators, UHF/VHF RF electronics for space, MM wave RF electronics.
Knowledge of the strident requirements related to the space environment, simulation and modeling techniques for optical instruments.
Applications of optical-electronic design techniques to space requirements; development of optic fibres, sensors and amplifiers to meet space requirements.
Acquisition of new skills in the fields of: fibre lasers, fibre sensors, microphotonics, and microwave photonics.

Ground Segment Skills

New navigation, guiding and control technology for autonomous satellite operations.
Integration of IP cores into FPGAs and simulation of IP cores. New tools to simulate FPGAs (not paid for by the contract). The expertise in designing complex systems has carried over to present work.
Ka Band terminal design capability.
RF systems, cryogenically cooled, LNA, HPA (20kW); passive inter-modulation avoidance.
Optic test equipment for the space sector.
Acquisition of know-how in navigation (GPS).
Extending the average expected life of the cathode in the microwave and millimetre wave tubes.
Development of advanced satellite failure detectors and software qualifications; acquisition of know-how on signal structure receiver design for GPS, eventually applicable to the manufacturing of receivers.
Development of hubs and terminals for wideband satellite communications.
ESA contracts keep our people on the leading edge, which helps remain competitive on international markets for consulting and end-to-end services in the area of satellite operations.

Space Technology Applications

Radarsat applications led into the web-based databases, allowing targeting government market in rice-growing countries.
BOD technology, remote network management, tele-medicine software development, marine sitcom.
Wide area augmentation for GPS (GNSS WAS)
Our remote sensing team has gained a diversity of skills working with overseas partners developed through ESA, such as the understanding of InSAR capabilities, algorithm development/image processing techniques.
DEMs, subsidence mapping, better software.

3.3 SUCCESS OF THE INDUSTRY

Direct and indirect economic spin-offs

We collected data from organizations that had received contracts under the Agreement. One goal of these interviews was to determine the extent to which the Agreement had achieved the objectives laid out in the submission to Treasury Board.

We selected organizations from a database provided by ESA. We then questioned 23 companies and 3 government agencies. We selected the organizations on the basis of the number of contracts they received from ESA. The sample represents 35% of all companies, 78% of all contracts and 90% of the value of all contracts concerned. Of the 23 companies, 16 were SMEs, and 8 were big businesses (one company is located in two cities). An executive summary of the report analysing the results obtained from the interviews with the companies can be found in Appendix 1 of this report.

We measured the direct and indirect economic spin-offs of contracts awarded by ESA and contracts or sales arising out of technologies developed under the Agreement. Revenues generated by improving technologies represented a rate of return of 2.76 times the value of ESA contracts. The rate of return for new technologies was 0.18, making the combined return 1.27 times.

These results are relatively good, given the following factors:

The ratio approaches those observed in other studies carried out using different methodologies in the United States, Europe and Canada. Results for those studies showed a ratio between 2.7 and 4.9.
In the space industry, it takes several years for a technology to progress from the development stage to commercialization, and many companies stand to reap substantial revenues in the future.
Some contracts awarded to Canadian companies in the Space Science sector do not necessarily result in sales of goods or services.
It was difficult to collect complete data for a seven-year period, given the time that has elapsed since. Corporate memory was often no longer present, and data were not always available. It would have been more efficient to collect these data gradually on a yearly basis.
Some indirect revenues from these contracts involve the telecommunications market. This market suffered a significant downturn in 2001, and companies in that field were affected by the slump. The economic environment thus had an impact on the results obtained during the period of the Agreement under evaluation.

With regard to jobs, surveys of ESA contract recipients showed that the Agreement generated an average of 100 person-years throughout the terms of the direct contracts. An estimated 75 person-years of employment were created by the sales of goods and services stemming from ESA contracts.

There is a consensus among the organizations that received ESA contracts under the Agreement to the effect that the program is generally beneficial in terms of opening up the European market and developing business relationships. For some companies, the recognition they gained for developing technologies under the Agreement helped open up markets in South America, China and India.

Relations between Canada and ESA led to the development of cooperation agreements for a number of markets, including Satellite Communications and Earth Observation. For example, Canada developed RADARSAT-1 and uses Band C technology. Europe developed a complementary technology, ENVISAT, and the two parties are negotiating contingency agreements to provide back-up for the systems on a voluntary basis should one or the other experience technical difficulties.

In the field of Earth Observation, the experience Canada gained through the ERS program facilitated the development and operation of RADARSAT-1 and helped Canada to develop industrial capabilities in this field. The experience acquired by Canada through these programs contributed to the quality of the ENVISAT program and contributed to the development of RADARSAT-2.

The Agreement benefited Canada in several ways. Canada boosted its visibility in European markets. Canadian contractors see the Agreement as a means of cultivating business relationships. The Agreement also fosters regional development and access to other markets by virtue of the successes of companies in Europe. Furthermore, Canada expanded its knowledge and technology in fields such as weather and ice movement forecasting, earth observation data, satellite communications technologies, environmental monitoring and security.

Source : CSA database, 1997-2003.

3.4 ANALYSIS OF THE INDUSTRIAL RETURN OF THE CONTRIBUTION TO ESA

When calculating the industrial return, ESA assigns a weighting factor based on the technological value of the contract. A contract with little value in terms of technological development (for example, ground equipment or printing services) is given a weight of 0.25. A study, consultation or technology development project is assigned a weighting factor of 1. ESA uses these factors to calculate the geographic return coefficient for each member state.

The ESA convention stipulates that ESA should ideally award contracts such that all overall return coefficients equal 1. Formal reviews of the geographic distribution of contracts take place every five years, with an interim review being conducted before the end of the third year. The geographic return should not vary significantly from the ideal value. The lower threshold of the combined return coefficient is established periodically for all member states. The latest value was 0.9, set in 2002. This value represents the minimum return guaranteed by ESA. If a review shows that a member states' return coefficient is too low or too high, special measures are taken to correct the situation.

The Canada/ESA Cooperation Agreement guarantees Canada a fair industrial return on activities carried out under the general budget, except for those related to the Technological Research Program (TRP). For optional programs, ESA guarantees that Canada will be treated according to the same rules that apply to member states.

The table below shows Canada's industrial return coefficient as of December 31, 2003. The rates are better than those observed at the time of the last program evaluation, in 1997.

Industrial return coefficient	December 2003	December 1996
Overall	1.11	0.90
General budget	1.00	0.50
Earth observation	1.08	0.95
Satellite communications	1.02	1.01
Navigation	1.12	-
Other programs	-	0.73
Source : ESA Industrial Policy Committee, February 13, 2004.

The following table shows a breakdown of contracts awarded to Canadian organizations that generated industrial returns through ESA programs. The total value of these contracts was €78 million, or approximately $125 million.

Contrary to the data from the 1997 evaluation, industrial return was divided among a greater number of companies. In 1997, three major companies received nearly 78% of all contracts. As the table below shows, from 1997 to 2003, 11 organizations received 78.8% of the contracts.

Breakdown of Contracts for Canadian Organizations
(January 1997 to December 2003)

Contractor	Percentage of industrial return
SPAR Aerospace Ltd	20.6%
SED Systems Inc.	12.4%
MacDonald, Dettwiler & Associates	9.8%	42.8%
Department of Energy, Mines & Resources	7.7%
Novatel Inc.	6.1%
C-Core Centre Cold Ocean Res.	5.9%
Telesat Canada	4.2%
Canada Centre for Remote Sensing	3.6%
Bomem	2.9%
Cal Corporation	2.9%
MPB Technologies Inc.	2.7%	78.8 %
Atlantis Scientific	2.6%
Com Dev Ltd.	1.8%
National Optics Institute	1.4%
Varian Canada Microwave Div.	1.2%
IMT Communications Systems Inc	1.1%
Vistar Telecommunications Inc.	1.0%
Amec	1.0%
Other	11.1%	100 %
Source : CSA database, 1997-2003.

These companies are dispersed throughout Canada's provinces. The following table illustrates the regional distribution of these contracts and also shows a more balanced distribution of returns under the Agreement compared with 1997.

Regional Distribution of ESA Contracts

Provinces	Contracts, in Millions	% of Total in 2003	% of Total in 1997
British Columbia	€ 9.2	11.7%	28.6%
Prairies	€ 15.5	19.8%	0.9%
Ontario	€ 23.7	30.2%	29.8%
Quebec	€ 24.0	30.6%	37.8%
Atlantic	€ 6.0	7.7%	0.4%
Source : CSA database, 1997-2003.

3.5 OTHER FACTORS INFLUENCING INDUSTRIAL RETURNS AND THE AGREEMENT

The following are some of the factors that may affect Canada's industrial return:

Canada is not a member state with the same status as the others. Canada's contribution is only half of what it would normally pay into the general budget, and we do not take part in all programs. Canada is considered a cooperating state.
Canada's presence in Europe and influence with ESA is limited.
Most Canadian companies are far away from Europe, which means money is required to establish alliances and do business with Europe. Some Canadian companies are already established in Europe, which makes it easier to do business.

4 FOLLOW-UP ON RECOMMENDATIONS OF THE 1997 EVALUATION REPORT

Our discussions with program managers and a review of the documentation showed that measures have been taken to address some of the recommendations.

4.1 MANAGEMENT OF THE AGREEMENT

1. Management of relations with ESA

A Department of Foreign Affairs representative in Paris takes on a portion of duties relating to lobbying the European Space Research and Technology Centre (ESTEC) by maintaining close cooperative ties with the organization and advocating Canada's point of view. There are also a number of Canadians who work for ESTEC, and several Canadian companies have a presence in Europe, thereby maintaining ties with the organization. These individuals provide valuable information to the CSA, which then passes on this information to other Canadian companies.

According to program managers, we need to cultivate relationships with staff in high-ranking positions to have any sort of impact on decision making.

Several respondents to the investigation conducted further to this evaluation mentioned the Canadian representative's important role as Space Counsellor. The Space Counsellor reports to the Department of Foreign Affairs, acting as liaison between the CSA and ESA on an ongoing basis. The Space Counsellor's continued presence in Europe and involvement in this program and political relations with ESA help improve program delivery. This work is most appreciated and is key to reaping benefits under the Agreement.

2. Consultations

There is no formal process per se for consulting with other government decision makers to support decisions concerning program selection. Several representatives from key departments have attended official ESA meetings and are therefore aware of possible program opportunities and potential activities for Canada. There are several advisory committees made up of space-sector stakeholders that review and provide advice on strategies for the CSA.

Companies and other departments were invited to take part in the information days held and organized by the CSA. Consultations were held with the industry through annual information sessions. At every presentation of space technology, the CSA is always sure to add a component on cooperation with ESA.

However, some industry representatives said there were unhappy with the CSA's process for consulting with them, and some said CSA support was lacking. There was also some dissatisfaction regarding the role the CSA plays in disseminating information about ESA programs.

Several business leaders told us about their unhappiness with the process for selecting programs, which determines the chances of doing business with ESA. Some also mentioned the negative impact of the CSA's slowness to decide whether or not to take part in or provide additional funding to optional programs. They claim that Canada is missing out on business opportunities because it takes too long to make decisions or make funding available.

3. Risk management

The CSA has not yet implemented a mechanism to protect itself against fluctuations in the value of the euro. Program budgets were established using a very conservative estimate to establish a reserve to compensate for exchange rate fluctuations. The real exchange rate is now very close to this provisional rate, leaving the CSA open to a greater risk of cost overruns.

Inflation also affects program costs and must be taken into account when risk mitigation mechanisms are eventually implemented.

4.2 INDUSTRIAL STRATEGY

1. Development

The Space Industrial Strategy was adopted in May 2003, and an implementation plan is currently under development. Agreement managers are attempting to conduct a technology and opportunity watch. They choose optional programs according to the Canadian industry's strengths.

2. Involvement of SMEs

ESA is setting up initiatives for SMEs that have not yet done business with them, but would like to. Canadian SMEs are eligible for these business opportunities. Several SMEs are taking part in ESA programs. Furthermore, the CSA holds information days and specific sessions concerning programs and business opportunities offered by ESA. In 2001, the CSA organized a cross-Canada tour for 15 European managers, giving them a chance to get to know Canadian companies better. Information sessions on EMITS (ESA's tendering database) were held to inform business about its potential. A directory of the Canadian industry was distributed in Europe.

The number of SMEs taking part in the Agreement was up over 1997. However, they did not receive a larger share of contracts. According to the data provided for the period from 1997 to 2003, government departments, not-for-profit organizations and universities were awarded €14.4 million in contracts, while SMEs received €10.2 million. Large companies received contracts totalling €53.8 million.

4.3 ALTERNATIVES TO THE AGREEMENT

1. Cost-benefit analysis of alternatives

The review of alternatives is an ongoing process at the CSA. Signing bilateral agreements and developing national programs are some of the options the CSA uses to fulfil its mandate. Canadian companies also have a responsibility to diversify and seek out new markets. Each alternative has its own advantages and disadvantages that must be taken into account when making a decision. Nevertheless, the Agreement has the potential to open up markets, create alliances and generate benefits that would not be possible through other means available to the CSA.

However, the close relationship between the European Union and ESA poses a certain risk to the chances of Canada's continued participation in ESA. A survey of businesses and government departments revealed an uneasiness about the effect this close relationship could have on Canada's place within ESA. Others see an opportunity for additional business. The CSA is taking steps to reach a treaty or other form of agreement with the EU to maintain business relations between Canada and Europe.

2. Observer status on the European Space Advisory Board

Canada relies on our representative with Foreign Affairs in Paris to keep abreast of what is going on in ESA. Our representative also provides excellent support to CSA managers who take part in a number of ESA decision-making committees. The CSA's president and External Relations staff have taken steps to find out about the intentions of ESA and the EU regarding Canada's participation as a partner in the European space program. Canada is well represented, and CSA staff keep close watch over the interests of Canadian companies and other government departments.

However, CSA has a limited budget, and its participation is shrinking in proportion to that of other major ESA partners. In 2004, Canada's share of funding for ESA programs was €18.01 million, or less than 1% of the total ESA budget.

4.4 RENEWAL OF THE AGREEMENT

The renegotiation of the Agreement took into account a number of the recommendations made in 1997, including the need to secure a return on the general budget portion.

With respect to Canada's status as an equal partner, there is no hope of Canada obtaining such status under current conditions. Canada only pays half the ESA membership fee that other European partners do and has a relatively limited budget. Canada chooses programs that hold out the most promise for Canadian companies.

5 FINDINGS

The following are the findings of our analysis of available data regarding the program's relevance, objectives, results achieved to date and impact and the effectiveness of the program's management.

5.1 RELEVANCE OF THE AGREEMENT

To what extent is Canada's participation in ESA programs still relevant?

Does Canada's participation in ESA programs allow it to meet the needs of stakeholders, including the space industry, SMEs and the regions?
Are the aspects that need improving the same as those already noted in the 1997 evaluation?

Since the beginning of the original agreements, the space sector has changed considerably, with respect to both the industry and the European and Canadian governmental bodies involved.

The programs have evolved as well, moving toward less mission-oriented "envelope programs" to which Canada commits for five-year periods. The following table shows the percentage of Canada's participation in programs for the two periods evaluated.

Type of program	Percentage of participation
Type of program	1997 - 2003	1980 - 1996
General budget	27%	14.3%
Earth observation	38%	44.2%
Communications and navigation	34%	33.1%
Other programs	1%	4.6%
Source : 1997 Evaluation Report and CSA database.

Another factor influencing the Agreement's operation is the admission of new European member states to ESA. The political landscape is changing rapidly. The EU is becoming more closely tied to ESA, and together they are initiating a number of long-term, jointly financed programs.

ESA is still perceived by the CSA as a means of diversifying its partnerships and the only international organization that, because of its structure, is conducive to such partnerships. Canada can discuss issues and do business with many European countries thanks to its participation in ESA.

Stakeholders raised a number of issues concerning Canada's participation in ESA programs.

First, there was the issue of available budgets. The CSA increased the number of optional programs in which it takes part, thus reducing the percentage of its participation in each program. Several persons interviewed said that additional funding would be required to improve our chances of seizing technology development opportunities and to benefit from leveraging to increase economic spin-offs under the Agreement. Canada participated in eight Earth Observation programs during the period under evaluation, compared with four such programs for the period evaluated in 1997. In Satellite Communications, seven programs were undertaken during the period covered by this study, compared with six in 1997.

Second, the number of Canadian businesses benefiting from ESA contracts has increased since 1997. A greater number of businesses are sharing the return on contributions paid out by Canada to ESA. A greater involvement of SMEs was also observed in this evaluation. Involvement in international markets requires special, more costly financial investment, which is sometimes an insurmountable obstacle for some SMEs.

ESA aims to involve European SMEs in the space sector. To this end, ESA has set up initiatives to give them access to this market. These initiatives are open only to SMEs that have never taken part in space programs before, the goal being to give them a chance to break into this field. Several Canadian SMEs have taken advantage of this program. A total of 19 SMEs received ESA contracts together worth €1.3 million, and 6 of those companies received 2 with a total value of €0.6 million.

Some SMEs find it difficult to maintain business ties with Europe, in part because of distance and the complexity of the market. Universities and some not-for-profit and governmental organizations also benefited from ESA contracts.

Third, the close ties between the EU and ESA with respect to the funding of optional programs such as Galileo is cause for concern for some Agreement stakeholders but represents for others an opportunity for Canada to seek closer ties with the EU and sign a treaty to help maintain the European markets that have opened up to Canadian industry.

5.2 ACHIEVEMENT OF OBJECTIVES

To what extent does the Agreement meet set objectives?

To what extent does the Canada's participation in ESA programs meet industry, technological and political objectives?
To what extent does the Agreement support the achievement of objectives under the Canadian Space Plan?

The objective respecting technology transfers from Canada to ESA and vice-versa was not met under the Agreement. Few companies are willing to transfer their technology. Instead, they jealously guard intellectual property rights over the technologies they develop. Canadian and European companies learn from one another when they work together, and both benefit from these exchanges. In our interviews, the only case mentioned in which intellectual property rights could not be retained over technology developed through Canadian cooperation with ESA was the Galileo optional program. Under this program, ESA negotiated with ESA member states the right to reserve intellectual property rights for ESA. Instead, licenses were given to Canadian and European companies taking part in the development of this technology. The length of the program and ESA's need to be free of any limitations in pursuing this program or maintaining its components during the course of the program's operations phase were cited as grounds for the exceptional way this program was handled.

The objective of generating new markets and opening the European market to Canadian companies was achieved in part. Companies had access to this market, in that ESA must award contracts to industry in each member state in proportion to their financial contributions. Canadian companies are viewed as competitors to European companies, and Canadian companies sometimes compete against each other instead of joining forces to obtain contracts from ESA. Indirect economic returns disclosed by Canadian companies were in a ratio of 1.27.

5.3 IMPACTS

What are the technological, industrial/economic and political impacts of the Agreement?

To what extent does the Agreement contribute to technological development?

As previously mentioned, the Agreement allows Canadian corporations to develop technologies and acquire new knowledge in the space sector. A list of these improvements can be found in Section 3 of this document. Several companies were able to integrate these technologies into space-related services or goods, earth-based applications or applications in other sectors. For some companies, these services and goods allowed them to develop other markets, such as India, China and the United States.

Several corporations that received industrial returns through ESA contracts awarded to them said that these contracts allowed them to maintain or create specialized jobs in the space sector.

For some Canadian companies, their experience with European markets through ESA was not as fruitful, and they did not think the Agreement was to Canada's advantage. For other Canadian organizations, the funds invested by Canada were insufficient to allow them to reap the benefits of becoming prime contractors for various major ESA contracts, which would have allowed them to develop systems and technologies, rather than subsystems to be integrated into the overall project.

The following technologies were developed by Canada between 1997 and 2003:

Joint source & channel coding
FPGA-based turbo-decoder
Bandwidth on demand
Ka band terminals
Li Ion Small Cell Battery
High Speed Modulator ASIC
Predictive Erosion Resistance Software (PERS)
Testing of materials
Small S-Band Data Relay User Transponder
Detector and Sensor Technology
DVB-RCS Interoperability
High Capacity Multimedia Comm. By Satellite, Geo Case
Pointing Calibration System
REMSAT

Conexpress Phase B
Interactive Breadboard Amerhis
Multimedia Ground Terminal
Phase A System Study for Earth Care Mission
Very Low Cost Satellite Interactive EMS
Skylan Geo satellite clusters
Integrated applications and user terminals
Sustainable integrated applications using satcom
Harsh Environments Initiative
Pipeline monitoring
Encroachment management service software

Direct contracts from ESA under the Agreement allowed Canada not only to develop these technologies, but also to improve and refine the development of technologies.

The following is a brief list of such improvements:

Modelling of space instruments/development of test instruments;
Reflex klystrons and high-power amplifier for cloud radar;
Force-moment sensor;
Ultrasonic Erosion;
Uncooled bolometer;
Inter-satellite links;
Ground receivers;
Low-loss fibre-optic microwave link;
Remote Raman spectroscopy as a water prospecting tool for planetary surfaces/development of a prototype software system to retrieve wind.

5.3.1 POLITICAL IMPACT

During the period under evaluation, Canada took part in earth observation programs mainly through contributions to the Envisat program (subsystems and equipment) and the Earth Observation Preparatory Program (EOPP). The experience Canada gained through the ERS allowed quality technological contributions to be made to the ENVISAT program, thus bringing subsequent benefits to Canada's RADARSAT-2 program. Canada and ESA are studying other potential joint activities, particularly in the area of disaster management, that would establish closer cooperation between the ERS and RADARSAT systems and, in the long term, lead to a harmonization of the two agencies' respective programs.

In the area of satellite communications, it should be noted that Canada contributed to the Payload and Spacecraft Development and Experimentation (PSDE) program, the Advanced Systems and Technology Program (ASTP), ARTEMIS and several components of ARTES (particularly ARTES-1, 5 and 9). It should also be noted that Canada has expressed a keen interest in ESA's multimedia program since its inception in 1998 and contributed to the ARTES-3 program element (Phase 1).

The third area of interest to Canada is related to generic technology activities. In this area, Canada signed an arrangement to participate in the General Support Technology Program (GSTP) in 1996.

Apart from their bilateral relationships, ESA and the CSA work together in a multilateral partnership on the International Space Station. Both agencies are also active members of multilateral decision-making bodies such as the Committee on Earth Observation Satellites (CEOS).

It should also be noted that Canada participates in part in relations between ESA member states when space issues are studied by certain international decision-making bodies (COPUOS, etc). ⁴

ESA has set up working committees to harmonize technologies and is working on implementing a structure for chosing companies that receive contracts so that Europe can become self-sufficient in terms of the availability of expertise. ESA aspires to self-sufficiency and independence in the space sector vis-à-vis the United States. This technology coordination process is part of a comprehensive space technology plan that will provide an overview of all current and future technological activities in Europe.

The technology harmonization process will take into account the numerous European developments and available resources and will focus on the complementarity of the roles of various partners with common objectives.

Parallel to this, the European Union, through the European Commission, is in the process of negotiating the development of a seventh Framework Program covering the science and technology and space sectors.

⁴ : History of and prospects for cooperation with Canada (ESA).

5.4 EFFECTIVENESS OF THE MANAGEMENT OF THE AGREEMENT

The management control framework of this Agreement was audited, and an executive summary of the audit report is included as Appendix 3 to our evaluation report. We recommend that readers of our evaluation take note of the audit's findings.

6 CONCLUSIONS AND RECOMMENDATIONS

The conclusions and recommendations of this evaluation are based on an analysis of information obtained from various partners and contract recipients and on the findings reported in the preceding sections of this report. The conclusions are presented under the four main headings of the program evaluation: relevance of the program, achievement of objectives, impacts and the effectiveness of the program's management.

6.1 CONCLUSIONS

Relevance of the program

The Agreement continues to benefit Canadian industry in terms of opening markets and providing technology development opportunities. However, distance and high costs sometimes make it difficult for SMEs to access these markets.

Achievement of Agreement objectives

Most of the people contacted as part of this evaluation said that there had been no technology transfers per se, but there had been sales of subsystems. The program helped them to develop technologies in partnership with European businesses involved in the same programs. The companies did not sell the expertise or technologies they had. In the case of the Galileo program, intellectual property rights were retained by ESA, and Canadian businesses had to negotiate licenses to use the technologies they developed.

The alliances created under the Agreement are beneficial to both parties and were made possible by funding from both Canada and ESA. Termination of the Agreement could have serious repercussions on Canadian industry's ability to maintain those alliances with the Europeans. Some alliances were achieved in the domestic market to increase the chances of winning contracts.

Thanks to its participation in ESA as a cooperating state, Canada sat on a number of management and strategic planning committees, which gave Canada regular access to information on European policies and trends. This participation also gave us opportunities to influence European strategies in the space sector. Canada will use the lessons learned from this partnership to improve its own strategies, systems and procedures.

Impacts

The Agreement contributed to an increase in Canada's technological capabilities through the development and improvement of Earth Observation, Satellite Communications and navigation technologies. However, this did not necessarily generate as much economic spin-offs as other sectors. Over the period evaluated, the direct and indirect spinoffs in terms of the integration of technologies and sales of goods and services were calculated to be 1.27 times the amount invested. Large companies received the largest portion of European contracts. A greater number of Canadian corporations received contracts between 1997 and 2003.

Canadian corporations formed alliances with each other to carry out projects with ESA. Several companies wanted the CSA to provide them with information to help them identify opportunities for creating such alliances with a view to submitting tenders for ESA contracts.

The success of Canadian corporations in developing technologies and integrating them into European systems helped those corporations to maintain the good reputation that Canada has earned over the 25 years it has been cooperating with ESA.

The studies, R&D components and results and subsystems developed under the Agreement do not necessarily offer commercialization opportunities and thus limit access to certain markets. Canada's limited budgets do not allow Canadian corporations to develop entire systems or regularly obtain contracts as prime contractors. Canada takes part in a large number of programs in an attempt to keep European markets open to numerous Canadian businesses working in a variety of sectors and specializations. This choice reduces the potential leverage effect Canada could gain by investing larger sums in targeted programs.

The European Union's close relationship with ESA is an important factor to be taken into account when considering Canada's ability to keep the Agreement relevant. The EU is playing a greater role in the funding of space programs in Europe. Canada is evaluating the impact that this could have on our participation in ESA as a cooperating state, in terms of both the influence Canada can wield and Canada's continued participation in ESA. Canada needs closer ties with the EU to keep informed about major impending developments in the space field in Europe and must be in a position to evaluate the consequences of these closer ties. Canada must be vigilant and negotiate an agreement with the EU to keep European markets open to Canadian corporations.

Management and cost-effectiveness of the Agreement

The effectiveness and transparency of the process for choosing optional programs must be improved in order to address the concerns of beneficiaries of the Agreement. Those who said they were satisfied with the Agreement reported that they have personal, one?on-one contact with program managers. Several respondents said that they were not familiar with the consultation process.

With regard to efforts to disseminate information concerning ESA programs and market opportunities, respondents said they were more or less satisfied. Several obtained information directly from ESA. Others took part in various information sessions held by the CSA. Some large corporations have subsidiaries in Europe in addition to their alliances with major European prime contractors. Big businesses and those who have been involved in activities under the Agreement for a long time are the most satisfied with this type of promotion.

Some partners had reservations about the effectiveness of how the CSA supports businesses throughout the selection process to which ESA decision makers subject Canadian tenderers. Respondents felt this kind of support was key to winning contracts.

Most participants agree that additional funding is required to reap the benefits of the leverage effect that participation in ESA programs should create.

Another issue raised was the essential role the Space Counsellor plays in achieving objectives under the Agreement. Several of those interviewed said the Space Counsellor was of considerable help in their efforts to operate in European markets. The Counsellor also supported CSA program managers in managing the Agreement and attended various ESA meetings to defend Canadian interests and advocate Canada's point of view.

6.2 RECOMMENDATIONS

The recommendations are based on the findings and conclusions of this evaluation. They address the achievement of objectives under the Agreement and the improvement of its management. They are aimed at maintaining the results attained over the Agreement's 25 years of existence and keeping European markets open. These recommendations are in addition to those formulated in the audit report, the Executive Summary of which can be found in Appendix 3 of this report.

1- Key issue: The European Union's close relationship with ESA is affecting Canada's opportunities for keeping European markets open to Canadian corporations.

Recommendation: The CSA should intensify its efforts to secure a cooperation agreement with the European Union that will ensure that Canada maintains a presence in European markets.

The CSA should study the possibility of developing a program for companies that want to use the European Union's Sixth Framework Programme to penetrate the European market. The program should complement the existing Agreement.

2- Key issue: Achieving the technology transfer objective.

Recommendation: The CSA should review the technology transfer objective, which is not being met, according to the information gathered from businesses.

3- Key issue: Achieving the objective of positioning SMEs with prime contractors in European markets.

Recommendation: The CSA should review its methods of helping SMEs to penetrate the European market and thereby increase their competitiveness. This recommendation is linked to the one made in 1997.

4- Key issue: Difficulty commercializing space products that have not received flight qualification.

Recommendation: The CSA should offer a wider choice of programs that could offer flight opportunities to Canadian companies so as to increase the chances of commercializing Canadian products.

5- Key issue: Consultation mechanisms are poorly publicized and do not facilitate industry participation in the selection of Canada/ESA programs, as instructed by the Program Terms & Conditions.

Recommendation: To meet program requirements, the CSA should implement a well-structured and transparent process for holding consultations with industry to support the selection of and promote optional programs.

6- Key issue: The industry feels it is missing out on many business opportunities because of a lack of information.

Recommendation: The CSA should continue holding information sessions promoting ESA programs.

The CSA should ensure that information given to industry covers all relevant political aspects so as to allow companies to prepare tenders that meet the requirements of ESA calls for tenders. More specifically, this information should cover the Canada/ESA context of the program, funding, the European competition and the prime contractor likely to be chosen by ESA.

The CSA should help Canadian industry to develop alliances with European partners to increase the chances of Canadian proposals being selected and of Canadian companies receiving ESA contracts.

The CSA should identify and bring together Canadian firms interested in establishing domestic alliances or consortiums to prepare tenders for ESA calls for tenders.

Strengthen Canadian efforts and actions in Europe to promote and support companies that have submitted tenders to ESA.

The CSA should identify or organize trade missions in partnership with other agencies or departments to help Canadian SMEs commercialize their goods and services with a view to marketing them to ESA and Europe.

7- Key issue: Managers are responsible for measuring the performance of the Agreement.

Recommendation: Program managers should review the Results-Based Management and Accountability Framework (RMAF). The CSA should provide them with the resources they need to implement the RMAF so that information can be collected on a regular basis and ensure accountability for performance.

The CSA should use tests to verify the information it receives from ESA concerning contracts awarded to Canadian corporations so as to ensure that the data used to measure the performance of the Agreement are reliable.

8- Key issue: Canadian funding is limited and subject to pressure from exchange rates and inflation. These factors limit the availability of funds for programs and may lead to cost overruns.

Recommendation: In consultation with TB, the CSA should implement a mechanism for mitigating the risks of exchange rate fluctuations and inflation.

ANNEXE 1 COLLECTE ET ANALYSE DES DONNÉES DE L'ACCORD DE COOPÉRATION CANADA/ESA

Executive Summary

The Canadian Space Agency (CSA) is conducting an evaluation of Canada's participation in the programs of the ESA (European Space Agency), and the impact of that participation on the space industry in Canada. The results of this evaluation will determine any coarse corrections that CSA may make in its ESA program, starting in April 2005.

To support this evaluation, DB Geoservices Inc interviewed Canadian organizations that have interacted with ESA, collected pertinent information, then reported on the findings.

The highest priority question to be addressed by this study is the extent to which Canada's participation in ESA has fulfilled the objectives mentioned in the Treasury Board submission in 2000. These objectives relate to the performance of private sector companies as indicated by:

Development of new technologies or enhancement of existing technologies, resulting products or services, and ensuing sales revenue;
Transfer of technologies between Canada and Europe; and
New or strengthened alliances between Canadian and European companies.

This study also addresses the effectiveness of the CSA in managing the ESA program. The study covers the period 1 January 1997 to 31 December 2003.

The consultants used a database of Canadian contracts with ESA, which was provided by the CSA. Thirty interviews were held with of 23 companies (one company was interviewed in two different cities), three not-for-profit organizations and three government organizations. The revenue figures of two of the not-for-profit organizations were included with the companies' revenues, because those organizations both seek R&D (research and development) contracts and reported ensuing revenue from the ESA contracts. The sample companies amount to 35% of the companies in the database; they received 79% of the contracts and the total value of their contracts was 90% of the total contract value for Canadian companies. Clearly, the sample included the larger companies, but it also included many small-medium enterprises too. Sixteen of the companies in the sample have less than 250 employees.

Many new technologies were developed and existing ones were enhanced under ESA contracts between 1997 - 2003. For the enhancements to existing technologies, the ensuing revenue was approximately 2.76 times the value of the ESA contracts. For the development of new technologies, that ratio is approximately 0.18. The same ratio for all technologies (new and existing) is 1.27. These results are considered quite good considering the following factors:

The ratio for enhancements to existing technologies falls in the range 2.7 - 4.9 that has been found in similar studies in U.S., Europe and Canada;
It usually takes several years to commercialize space technologies, and many companies are expecting substantial revenues from the new technologies and the existing technologies, so these ratios are expected to improve in coming years;
Many contracts performed for ESA by Canadian companies are Systems Engineering, Mission Definition/Analysis studies and development of space science instruments. These projects, which are a normal part of the space business, do not usually result in products and services with any substantial potential for ensuing revenue, so they dilute the statistics.
It is difficult to collect information of a seven year period at the end of that period. Some information that could have increased the figures of ensuing revenues may have been misplaced since 1997.
Much of the ensuing revenue from this period related to telecommunications. The crash of the telecommunications market in about 2001 was a major damper on ensuing revenues. Had the crash not occurred, we would expect to see much higher revenue figures.

Many companies said that, in addition to the R&D funds, a major benefit of ESA membership for them is the business relationships that result from ESA projects, and the opportunities to form consortia with European companies.

ESA contracts generated on average about 100 person-years of employment during the 1997-2003 years and contributed to maintaining core teams of highly skilled manpower in Canada's space companies. The ensuing sales attributable to ESA contributed to creating on average an additional 75 person-years, with a peak in 2001 and a rapid drop thereafter, reflecting the downturn in the telecommunications market.

In the ESA contract database, the consultants found some company names that were out of date, and some discrepancies and omissions. While these are not expected to effect the total figures substantially, the ESA contract database appears to be limited as a management information tool. In addition, this evaluation study has shown the difficulties for both the CSA and industry of reporting on key performance indicators (e.g., ensuing sales, employment, skills…) associated with ESA contracts completed a few years ago.

It is recommended that the CSA put in place ways and means to collect performance data on a yearly basis, as instructed by the government Policy on Transfer Payments, which refers to the Results-Based Management and Accountability Framework (RMAF). As a complement to this, CSA should verify and augment the information about Canadian ESA contracts, using the ESA database as one input, but not the only input.

Since technology transfer between Canadian and European companies was found to be an unrealistic objective, it is recommended that the objective of the Canada/ESA Program "to obtain timely information about emerging European technologies and encourage the two-way transfer of technology between European and Canadian industries" be modified in the revised Terms and Conditions of Contributions to the Canada/ESA Cooperation Agreement as follows: "to obtain and disseminate timely information about emerging European technologies".

A number of issues were identified regarding the effectiveness of Canadian industry to win ESA contracts and capitalize on them. Increasing economic returns on ESA contracts is an objective that both industry and government stakeholders are seeking to achieve; the issue is to how generate more spin-offs and how the CSA should support this objective.

Existing consultation mechanisms do not facilitate industry participation in the selection of Canada/ESA programs, as instructed by the Program Terms & Conditions. A structured industry consultation process needs to be accompanied by a set of well-articulated program selection criteria.

One of the objectives pursued by the Canada/ESA Programs is to provide flight opportunities for Canadian technologies. The findings show that the space qualification of technologies, systems or products is a critical condition to obtain space business and ensuing revenues.

Industry believes that they lose out or are at a disadvantage in gaining valued ESA contracts, partly because of lack of timely intelligence reports on opportunities and insufficient lobbying by CSA on behalf of Canadian companies in Europe.

In order to address these issues, it is recommended that CSA take a more active role in supporting Canadian industry to win strategically beneficial contracts, and to take maximum technological, scientific and commercial benefit from those contracts. The following methods may contribute to the satisfaction of this recommendation:

1. CSA should take the lead for formulating, in cooperation with industry and other government departments (OGDs), a strategy to support the generation of economic spin-offs from Canada investments in ESA, as well as in other space technology development programs. This strategy would include the following elements, among others:

a. Identification of niches where Canadian technology is advanced and Canadian companies perform well;
b. Identification of firms (particularly SMEs) that offer good chances of generating spin-off sales from ESA contracts;
c. Identification and monitoring of potential winners, i.e., the firms with good market opportunities for the products developed through ESA;
d. Establishment of measures, in cooperation with OGDs and provincial authorities, to financially and technically support the firms offering good market opportunities for the products developed through ESA.

2. The consultation process with industry to select Canada/ESA programs should be precisely defined and structured, and made visible to stakeholders. Program selection criteria and procedures should be prepared to guide the implementation of the consultations.

3. CSA should increase the number of Canada/ESA programs offering space flights to Canadian technologies.

4. CSA should hold regular briefing sessions and workshops with interested companies on a more regular basis.

5. CSA should ensure that the information provided to industry (through briefings or workshops) cover the "political context" relevant to an opportunity, so as to help industry position itself for preparing competitive proposals in response to ESA ITTs. The information would include intelligence on topics such as the Canada/ESA program context and funding, the ESA system of geographic returns, the European competition, and, where possible, the prime contractor likely to be selected by ESA.

6. CSA should identify, communicate with and put in contact Canadian firms interested in establishing a domestic alliance or consortium for submitting a bid to ESA.

7. CSA should help Canadian industry to develop alliances with European partners so as to increase the chance that Canadian proposals will be retained and receive an ESA contract.

8. CSA should strengthen Canadian actions and efforts in Europe with decision-makers to market and support companies that submit bids to ESA.

9. CSA should identify or arrange trade missions to help smaller Canadian firms to sell their products to ESA and Europe.

Since the European Union (EU) is taking more and more of a role in the management and funding of European space program, it is recommended that CSA consider expanding its relationship with the European Union to reflect the increased presence of that body in space matters. It is also recommended that CSA consider providing funds for Canadian companies that participate in the EU Framework Program. The best mechanism for doing this should be studied.

The overwhelming consensus of the interviewed companies is that the Canada/ESA Cooperation Agreement is generally beneficial and should be continued.

APPENDIX 2 - INFORMATION ON ESA PROGRAMS FUNDED BY CANADA AS AN ESA MEMBER STATE⁵

GENERAL BUDGET

The General Budget Program contribution to ESA is a mandatory payment and is allocated to corporate and administrative costs associated with the day to day functioning, and over-head costs of the agency. Canada is a cooperative member and not a full member of ESA. Canada contributes to the general budget fund at half the normal GDP rate. Full member countries pay fees toward the General Program, which are calculated and based on the average national income of each member state for the last three years in which statistics are available; as described in Article XIII.1of the ESA Convention. Although the General Budget covers the cost of the General Studies and Technological Research Programs, Canada does not have the right to participate in these programs, and therefore, contributes at a lower rate than full members of the program.

GSTP- General Support Technology Program

The GSTP is an optional program, which was initiated in 1993, and aimed at bridging the gap between the TRP and other preparatory programs, such as EOPP and ARTES-1. ESA periodically requests a Call for Ideas, and initiatives are selected according to the technology development priorities of the agency. The program is specifically designed to support the demonstration of flight suitability for technologies.

EARTH OBSERVATION FROM SPACE

ERS-1

ESA's first earth observation satellite, ERS -1, was launched in 1991. The satellite was designed to carry the latest in payload technology and was equipped with an imaging Synthetic Aperture Radar (SAR), a radar altimeter, and other powerful instruments, to measure ocean surface temperature and winds at sea. The satellite is a sophisticated earth observation spacecraft designed to collect data on the earth's land surfaces, including: agricultural areas and forests, oceans and polar caps, and coastlines and marine pollution.

The satellite was also used to monitor natural and man-made disasters on earth, such as flooding and forest fires, and to return significant data to earth so that a strategic plan could be developed to manage and find solutions to these types of problems affecting the earth's inhabitants. The ERS-1 satellite finally ran out of fuel in 1999, far exceeding its lifespan, which was estimated to be three years.

ERS-2

ERS-2 was designed to overlap with ERS-1, and was launched in 1995. It too was designed to use SAR technology to observe the earth's atmosphere, but was equipped with the additional sensor technology to research, observe and measure the atmospheric ozone. Given the great success of ERS-1, ERS-2 was designed to be identical. The significant difference between the two satellites was that ERS-2 was designed to include an extra instrument to monitor ozone levels in the atmosphere.

The ERS-2 is expected to be operational for several more years. The information provided by ERS-2 has had a profound impact on the understanding of oceans, and polar ice caps, and is of immense benefit in many other areas of prime importance for Canada, including: ice-cover surveys, pollution and natural disaster monitoring, ship routing, and offshore exploration.

Earth Observation Preparatory Program (EOPP)

The EOPP is a transitional program leading to the Earth Observation Envelope Program, and is also known as the Living Planet Program. The two main components of the program are the Earth Explorer Component, which includes: the definition, development, launch and operations of Earth Explorer missions. Specifically, the EOPP incorporates numerous initiatives including mission concept studies, instrument concept feasibility studies, measurement campaigns, and technology pre-development. Both programs are designed to monitor and record the science of the earth's interior, oceans, atmosphere, cryosphere and land surface. The main goal of EOPP is to aid in the preparation and selection of future Earth Explorer and Earth Watch missions.

Poem-1/ENVISAT-1

ENVISAT, short for the environment satellite program, is the name chosen to describe this ESA satellite designed to monitor the earth's environment. The ENVISAT satellite is equipped with ten advanced sensors, giving scientists the most inclusive look ever at the earth's oceans, land, atmosphere and ice caps. ENVISAT was designed to have a five-year mission length and cost approximately 2 billion Euros to build. Launched on March 1, 2002, from Europe's spaceport in Kourou, ENVISAT was designed to work in conjunction with the satellite Artemis, to assist it in storing and returning data to earth. The satellite enables scientists to understand how changes to the earth's environment and atmosphere impact on each other, and in turn, impact life on earth. The data relayed to earth from this satellite provides answers to many questions scientists have on how the earth's present environmental condition, including the atmosphere surroundings it, are changing and adapting to the demands placed on it, and whether these changes have a positive or negative effect on the earth, and on life itself. The questions it is presently answering for scientists on earth are the following: How fast are the ice caps melting? What is the state of the rain forests? Is the ozone hole growing? What is the concentration of green house gases in the atmosphere?

Canada joined thirteen other contributing countries on the list of contributors to this program, including Austria, Belgium, Denmark, France, Finland Germany, Italy, Norway, Spain, Sweden, Switzerland, The Netherlands and the United Kingdom. ENVISAT is used in conjunction with the Canadian satellite, Radarsat -1, to assist in monitoring the changing ice patterns in the Gulf of St. Lawrence, to enable the safe navigation of Canada's primary commercial shipping channel.

EOEP - Earth Observation Envelope Program

The Earth Observation Envelope Program (EOEP) is focused on contributing to the four main thrusts of the ESA Space Strategy, which are: the pursuit of scientific knowledge; the enhancement of the quality of life on earth; European independence in EO; and finally, the promotion of the European space industry. The program itself comprises two main components. First, the Earth Explorer Component, incorporates programs focused on monitoring: the earth's interior, the physical climate, the geosphere, biosphere, the atmosphere, the marine environment and the anthropogenic impact. The second component, the Exploration Component, includes: earth observation preparatory activities, instrument pre-development, earth watch definition activities, mission exploration and market development.

Earth Watch - GMES

The overall aim of the Global Monitoring for Environment and Security (GMES) program is to support Europe's goals regarding sustainable development and global governance by providing timely, and quality data, information and knowledge. GMES is a joint initiative of the European Commission and ESA, which was initiated in 1998, and formally adopted by their respective Councils in 2001. GMES is designed to reconcile the political needs associated with current environment and safety issues, along with available scientific technology, offered by information technologies and earth observation technologies; e.g. earth observation satellites.

It is a program that seeks to unite the needs of society related to the issues of both environmental and security well being, with advanced technological and operational capabilities offered by earth and space borne observation systems. The GMES program is focused on meeting the needs of European society to response to environment and security issues related to global change, environmental stress, and natural and man-made disasters. GMES will combine data obtained from ENVISAT and other earth, aerial and seaborne observation systems and allow researchers, private companies and public authorities, to monitor climate change, track pollution and react to emergencies. It will be used to track the progress and implementation of the Kyoto Accord, among other important environmental goals.

In the field of safety and security, the GMES system will be used to monitor maritime and other traffic, improve cross-border responses, and enable the movement of refugees to be monitored. GMES will pool Europe's expertise, and activities in satellite observation and remote sensing. In 2002, ESA released its five-year plan to establish environmental information services from space with a budget of 83 million Euros. By 2008, the program plan suggests the GMES system will be operational.

EOEP - PHASE 2

Phase 2 of the Earth Observation Preparatory Program will run from 2003 to 2007. The second phase of the program will allow for the continuation of the existing Earth Explorer missions focusing on environmental and atmospheric observation via satellite. This phase is meant to augment the visibility and effectiveness of ESA's Earth Observation program.

TERRA SAR

The information found on this program refers to it as an Earth Watch mission in the study phase. The TERRA SAR (Synthetic Aperture Radar) is an earth observation device that is designed to utilize longer wavelength L-band radar that has been shown to be of greater use over vegetated surfaces. Vegetation such as loose soil can be difficult to view with other such devices, causing the image to become unclear. The objective of the program is to provide private, and institutional users, with space data for commercial use. The TERRA SAR program will consist of two satellites that are equipped with L-band SAR, and X-band SAR instruments. It will be used to create a self-sustaining business, and will also offer support to the GMES program.

SATELLITE COMMUNICATIONS

OLYMPUS

Olympus is a communications satellite, launched by the Ariane 3 in 1989, and design to test new technologies and payloads in space. Canada is listed as the third largest financial contributor to the program, contributing an eleven percent share. The satellite was assembled and tested at the David Florida Laboratory in Ottawa, which was renovated to accommodate the biggest telecommunications satellite ever built. Along with the prime contractor, British Aerospace, Canada's Spar Aerospace Ltd. is also listed as a major contributor.

Other major contributors to the satellite program include, Austria, Belgium, Denmark, Italy, Netherlands, Spain, and the United Kingdom. The satellite was hit by a meteor in August of 1994, and was unable to fulfill its five-year operational plan. After the meteor hit, the satellite continued to be functional, but in a lower altitude than it was designed for. The satellite lacked sufficient propellant to recover it and was, therefore, place in a graveyard orbit.

ARTEMIS

Canada signed on to the Artemis program in March of 1991, and agreed to contribute to the Technology Mission element of the program at a scale percentage of 0.75. Artemis (Advanced Relay Technology Mission), launched on July 12, 2001, is a satellite that has incorporated several significant technological advances in the field of telecommunications. Artemis is equipped with three sophisticated payloads for the execution of navigational, mobile communication and data relay missions over the next ten years. It has significantly improved the coverage of the European - wide communication system, including coverage over parts of Africa that previously lacked reliable communication facilities.

Artemis has enabled voice and data communication between mobile terminals, mainly trucks, trains and boats, in remote areas of Europe and North Africa, as well as the Atlantic. The satellite is equipped with inclination control thrusters that use ion propulsion technology, and these have eliminated the need for large amounts of chemical propellant usually used to maintain a stable orbital position. Two types of new thrusters are found on Artemis that are described as five times more efficient than traditional chemical systems, and have paved the way for lighter, less expensive and commercially attractive future satellite missions. Artemis has significantly reduced the time necessary to transfer data to earth from other satellites. The benefits of faster data relay are numerous, and have a significant impact on human life. The information relayed to earth can quickly alert ground inhabitants of potential danger and crisis, such as: flooding, earthquakes and other natural and man-made disasters.

It is important to note that Artemis did not originally reach its targeted elliptical orbit. It took a full eighteen months of pain-staking work to manoeuvre and coax the satellite, fifteen km at a time, into its proper orbital apogee, or position, at 35 853 km. Artemis has marked the world of space age telecommunications by demonstrating many first-time applications and rescue techniques of a satellite gone array. These firsts include: a first major reprogramming of a telecommunications satellite, a first orbital transfer to geostationary orbit using ion propulsion, the longest ever-operational drift orbit that provided the promotional opportunity and stimulus for future data relay services.

The DRTM program involves the launch of the ARTEMIS satellite and two Data Relay System (DRS) satellites. The function of the ARTEMIS and DRS satellites is to make available an operating system that could be used to control and monitor a variety of manned and unmanned spacecraft in a self-governing way.

Advanced Research in Telecommunications (ARTES)

ARTES - Former programs

ARTES is ESA's main telecommunications initiative. ARTES 1 through 9 deal primarily with the identification, development, testing, advancement and commercialization of emerging telecommunications technologies. These programs deal primarily with a number of envelopes, which will be funded by a specific sub-envelope. The main aim of the ARTES programs, divided into sub-envelope programs, is to maintain and improve the capability and competitiveness of industry in the field of world satellite communications. The programs are designed to define, assess and promote the use of satellites for broadcasting, multimedia and mobile communications, data relay, search and rescue, navigation and aeronautical services. Generally, the ARTES programs identify and experiment with new services to enlarge and promote the field of application for communication satellites. These programs will introduce and experiment with new techniques for designing satellites, and their operational systems, so that they are economically competitive and complement existing, or future, initiatives in the field of telecommunications. These programs identify and experiment with techniques and technologies in the field that require in-orbit demonstration to ensure their operational systems are flight ready. The ARTES programs were initiated in 1993, and will be completed in 2006.

ARTES 1 PSI 4 (Preliminary Studies and Investigation)

The ARTES 1 is essentially the foundation of the ARTES programs, and provides the seed funding from which new programs in the field of telecommunications are identified. The ARTES 1 program is designed to perform mission, system, and general configuration studies, as well as other activities, to prepare and continuously update the medium and long-term ESA program in the field of telecommunications. It is also used to perform laboratory experiments of system concepts used in the design of telecommunication satellites including antennas, simulations and software development. The program is used to define the technological needs necessary for the effective execution of ESA's telecommunications program. It is used to facilitate communication and networking with industry players, including other national space agencies, to determine future needs, define new programs, and explore potential areas of cooperation in the field of telecommunication satellites. The program funding is also used to perform prospective studies, market surveys and economic analysis, in order to identify future mission requirements and activities.

ARTES 3 Phase 3

The ARTES 3 program is specifically intended to assist the European industry to become a global player in the multimedia satellite market. Phase 3 specifically supports industry to help them remain current and informed of the on-going system-level maturation in the field of multimedia services via satellite. The focus of the program is simply defined to offer consumers interactive broadband services at affordable prices to enhance their daily lives. European and Canadian industry player have developed solid knowledge of satellite application in the field of multimedia, but need assistance to compete on equal terms with their US, and Japanese counterparts, in order to become global players. The program is divided into line categories; with Line 1 focusing on applications; Line 2 on development of satellite communication system elements; and finally, Line 3, focusing on pioneering novel systems. Line 3 of the ARTES 3 program is specifically focused on system studies and complementary analyses and simulations, as well as the development, and validation of advances in end-to-end satellite communication systems. In Canada, the program had supported the development of the Remote Communities Services Telecentre that has establishment nine remote rural telecentres in Newfoundland and Labrador, and has linked them to urban centres enabling the access and use of high-speed internet, videoconferencing, and digital imaging, to facilitate and link users with health, education and government services. It has also enabled the Integrated Emergency Medicine Network, which provides high-speed communication links to help emergency workers treat patients in remote regions by providing a real-time link with medical experts in urban centres. The service is used to send medical information, such as X-rays, for analysis to experts anywhere across the country, and is also used to monitor a patient's vital signs while they are being transported from remote or urban locations by land or air ambulances. The system is also designed to treat people in disaster situations. Finally, Canada has used funding under this program to develop the Marine Interactive Satellite Technologies (MIST) initiative. This initiative is used to enable marine vessels in Canadian waters to communication via satellite, and to facilitate a link between land and sea services, such as the transfer of information for medical and recreational services.

ARTES 5 Phase 4

The specific focus of the ARTES 5, the Advanced Systems Telecommunications Equipment program, is to ensure the long-term readiness of the industry in the field of technological innovation of equipment and applications, and in the development of enabling infrastructure that will permit these innovative concepts to be market ready. ARTES 5 funding is used for preparatory research and development in the area of satellite communications and navigation. Once a new opportunity has been identified, this program helps to fund the early stages of development of promising technologies. The program is used to encourage Canadian and European industry to develop cutting-edge technology, beyond the existing state-of-the-art, given that industry players are not investing in these innovative telecommunication systems. The goal of the program is to encourage the development of innovative technologies in the field to become market ready. It is also intended to ensure the presence of European and Canadian industry in the new wave of technological growth to ensure they remain in the forefront of new innovative developments in satellite communication, and therefore, continue to ensure next-generation broadcasting telecommunication systems. New initiatives classified under this program include: emergency response management, road-traffic monitoring, aeronautical communications and new navigational applications, all designed to expand the range of satellite services available to end-users.

GALILEOSAT DEFINITION

Galileo is a European satellite navigation and positioning system intended for civilian purposes that will provide highly accurate positioning and navigational services. It will enable users to determine their position using a single receiver. Presently, navigation satellite services are only available through the US GPS, or the Russian GLONASS, military controlled satellite systems that do not guarantee uninterrupted services for civilian users. Galileo will be interoperable with the US and Russian systems, and will guarantee operation to European navigators at all times, most importantly, in dire emergency situations. It will provide real-time positioning accuracy within one meter.

Galileo will be the cornerstone of the Global Navigation Satellite System (GNSS), and will allow positions to be determined accurately most places on earth. It will provide better coverage at high latitudes, and will therefore, be particularly useful to areas in northern Europe that are not well covered now by GPS. Galileo will provide many ground navigational services including, air and sea traffic control, and ground transportation, and will also be used in the domain of crime prevention, urban planning, agriculture and fisheries. The Galileo system will be built around thirty satellites (twenty-seven operational and three reserve craft) occupying three circular earth orbits. This configuration will provide excellent coverage of the planet. Two Galileo control centres will be established in Europe to control satellite operations, and manage the navigation system.

Galileo represents the first time a project will be carried out jointly by the European Space Agency and the European Union. It is estimated to cost approximately 3.2 billion Euros and to proceed in three phases. Phase 1, began in 1999, and is called the "Development and in-orbit Validation Phase." It is projected to end in 2005, with an estimated cost of 1.1 billion Euros. Phase 1 will cover the initial design phase and the consolidation of mission requirements, including the development of satellites and ground-based components. The second, or "Deployment Phase," will involve construction and launch of the satellites, and will allow industry, and service providers, to develop commercial opportunities. This second phase is estimated to cost approximately 2.1 billion Euros and is scheduled to be complete by 2007. The third, and final "Commercial Operations Phase " is projected to start in 2008, and will mark the full operation and availability of the system. It is expected that this phase will be completely financed by the private sector and will be available to commercial and public service users.

TECHNOLOGY AND EXPLORATION

AURORA

The first objective of the Aurora program is to formulate, and then implement, a European long-term plan for robotic and human exploration of the solar system, including Mars, the Moon and asteroids as likely targets. The second objective of the program is to search for life beyond earth. The strategy calls for Europe to: explore the solar system; stimulate new technology; and finally, inspire the youth of Europe to take an interest in science and technology. Between now and 2015, Aurora will feature robotic missions both to the Moon and Mars, in preparation for human missions to both targets.

Aurora has been set up as a step-by-step approach that will see an increase in the mission's complexity over time, beginning with: the remote sensoring of the Martian environment, a robotic exploration and surface analysis, Mars sample return missions, a robotic outpost, and will culminate with the hopeful human exploration of Mars by approximately 2025. These missions were identified by the Exploration Program Advisory Committee (EPAC) from a number of proposals collected throughout Europe and Canada in 2001, and recommended to the Member States of ESA for endorsement. The EPAC is constituted of independent scientific and technical advisors to the ESA Director General.

Cooperation within ESA, and collaboration with European and Canadian industry, and academia, is considered paramount to the project. The Aurora Board of Participants (ABP) is made up of representatives of the ESA member states that have joined the program, including Canada. The Aurora program has a thirty-year outlook plan. Member states that participate in the optional program will be committing themselves for five-year program periods, and will be able to modify their level of involvement, or pull out at the end of each period. The Aurora program was adopted as an ESA optional program in November 2001. It is currently in the preparatory phase and will be completed at the end of 2004, when the next program period of 2005-2009, will be adopted and the amount of continued funding determined. Aurora documents indicate that available funding is paramount to the future of the program. The cost of the 2005-2009 program period is estimated to be 900 million Euros, representing less the seven percent of ESA's budget.

Canada signed on to the Aurora program on June 14, 2002. In the ESA literature found on the agency's web site, Canadian involvement is described as prominent and referred to on numerous occasions. MD Robotics is referred to as a prime contractor in Phase A studies, along with the company NGC Aerospatiale. Collaboration with Canadian companies is referred to as a key aspect of the project. The companies were chosen after a 2002 Call for Ideas was initiated to make the technology needed for these missions possible. Contracts were first awarded in September of 2003. As noted earlier, Canada has a voting position on the ABP, and has a clear voice in the future, and final decisions related to the project. The continued funding of Phase B of ExoMars is carefully qualified, and described as depending on the availability of future monies.

⁵: CSA website

APPENDIX 3 - EXECUTIVE SUMMARY OF THE AUDIT OF THE MANAGEMENT FRAMEWORK FOR THE CANADA/ESA COOPERATION AGREEMENT

The objective of this audit project is to evaluate the extent to which the systems and procedures used to manage the Canada/ESA Cooperation Agreement in all its aspects are effective, efficient and economical.

The current Canada/ESA Cooperation Agreement was signed on March 28, 2000 and will be in force until 2008-2009, subject to an agreement to renew its terms and conditions effective April 1, 2005. Up to $30 million in contributions will be paid out to ESA each fiscal year throughout the term of the Agreement.

Implementation of the recommendations made in this audit report will allow the manager of the Canada/ESA Cooperation Program to carry out the duties of this position more effectively, especially with respect to compliance with program policies and conditions, decision making and accountability.

More specifically, the audit report makes the following recommendations:

Complete administrative records for each optional program should be retained to ensure an adequate audit trail and support decision making.
Program approval documents (PADs) submitted to the Program Review Advisory Board (PRAB) with a view to obtaining approval for optional programs should contain all necessary information, as described in the program terms and conditions approved by Treasury Board (TB).
A process for holding consultations with industry stakeholders should be implemented with a view to supporting decisions respecting optional programs selected by Canada.
The rationale for considering the contribution to the General Budget as a generic expenditure related to various activities according to the new Program Activities Architecture (PAA) should be reviewed in line with the actual contribution to optional programs so that more accurate financial information can be obtained.
Monitoring of accumulated appropriations in ESA accounts should be carried out in early 2005 to ensure that they have actually been used when the next payment call occurs.
A mechanism for minimizing the risks of fluctuations in exchange rates should be implemented in consultation with the Treasury Board Secretariat (TBS).
Monitoring of expenditures related to optional programs should be carried out to ensure that cumulative payments match the amounts in foreign currency that the Canadian Space Agency (CSA) committed itself to, thereby allowing the detection of cost overruns.
The Risk-Based Audit Framework (RBAF) and the Results-Based Management and Accountability Framework (RMAF) should be implemented.

This internal audit was carried out in accordance with the Treasury Board Policy on Internal Audit and the IIA (Institute of Internal Auditors) Standards for the Professional Practice of Internal Auditing. In our professional opinion, the audit procedures followed and evidence gathered were sufficient and appropriate and support the accuracy of the conclusions in this report. The conclusions are based on a review of the situations in question using established audit criteria. The conclusions only apply to the entity examined.

APPENDIX 4 - MANAGEMENT ACTION PLAN

Ref.	Recommendation	Designated authority		Action plan details	Timetable
		Organization	Individual
1.0 Policy aspects
The european union's close relationship with esa is affecting canada's opportunities for keeping european markets open to canadian corporations.
i) Intensify its efforts to secure a cooperation agreement with the European Union that will ensure that Canada maintains a presence in European markets.		External Relations Foreign Affairs (Counsellors in Paris and Brussels)	External Relations Space Technology	Steps in this direction have already been taken (External Relations) since June 2004. More specifically, we are currently discussing the possibility of entering into a space cooperation treaty with the EU that would include a mechanism for providing funding to Canadian businesses wishing to bid on contracts relating to EU initiatives.	A precise timetable is difficult to establish, as it will depend on developments in international negotiations. For example, since October, a reorganization of branches of the European Commission has been holding up the debut of negotiations. However, the process itself has begun and is progressing.
ii) Study the possibility of developing a program for companies that want to use the European Union's Sixth Framework Programme to penetrate the European market. The program should complement the existing Agreement.		Space Technology External Relations Strategic Development Corporate Management	ESA Program Office	See above. The funding mechanism, if approved, would be coordinated with existing Agency programs and incorporated into its strategic framework.	See above.
2.0 Objectives
1 Achieving the technology transfer objective under the agreement.
i. Review the technology transfer objective, which is not being met, according to the information gathered from businesses.		Space Technology	ESA Program Office	The ESA Program Office will implement the recommendation. Program objectives will be clearly set out in the TB submission currently being drafted and submitted to the CSA's Executive Committee for approval. Once approved by the Executive Committee, the submission will be amended to take the objectives into account.	Presentation to CSA Executive Committee scheduled for December 2004.
2 Achieving the objective of positioning smes with prime contractors in european markets.
i. Review methods of helping SMEs to penetrate the European market and thereby increase their competitiveness. This recommendation is linked to the one made in 1997.		Space Technology External Relations	ESA Program Office	The ESA Program Office will continue its efforts in this regard and implement the recommendation. Once this issue has been given more in-depth consideration, a more detailed approach and/or plan will follow. Actions will be coordinated with the Industrial Policy Section, External Relations.	March 31, 2005
3 Difficulty commercializing space products that have not received flight qualification.
i. Offer a wider choice of programs that could offer flight opportunities to Canadian companies so as to increase the chances of commercializing Canadian products.		Space Technology	ESA Program Office	The ESA Program Office and Space Technology acknowledge that flight experience makes the commercialization of space products much easier. To this end, a program focusing on platforms for small and micro-satellites was created in 2003 and given long-term funding to demonstrate space systems and equipment. Furthermore, since 2000, the Space Technology Development Program (STDP) has included a component for funding flight demonstrations of new space technologies. The In-Orbit Technology Demonstration program element has already allowed several Canadian corporations to sell their products abroad on the basis of flight heritage gained through the Agency. Canada is also taking part in ESA's PROBA program, which provides flight opportunities for demonstrating advanced technologies. Furthermore, within the CSA itself, the recent small satellites program will also provide flight opportunities. Further to this recommendation, efforts will be made to increase funding for these programs and find additional flight opportunities for Canadian companies. The ESA Program Office will continue its already considerable efforts in this regard and implement the recommendation.	Ongoing process
3.O Consultation and promotion process
Consultation mechanisms are poorly publicized and do not facilitate industry participation in the selection of canada/esa programs, as instructed by the program terms and conditions.
i. To meet program requirements, the CSA should implement a well-structured and transparent process for holding consultations with industry to support the selection of and promote optional programs.		Space Technology	ESA Program Office	A well-structured and transparent process for consulting with the industry will be implemented to develop a consensus within the industry with a view to supporting decisions regarding Canada's selection of optional programs. The process will be implemented in time for the upcoming round of consultations leading to the selection of optional programs in which Canada wishes to take part once the December 2005 ESA Council meeting at the ministerial level is held. The ESA Program Office will implement the recommendation.	July 2005. A consultation process will be implemented in time to support Canadian decisions in preparation for the December 2005 ESA Council meeting at the ministerial level.
4.O Information/Promotion
The industry feels it is missing out on many business opportunities because of a lack of information.
i. Continue holding information sessions promoting ESA programs.		Space Technology Communications	ESA Program Office	We are already taking advantage of all events organized by the Technology Management Directorate to promote ESA programs (eg, Technology Days, STDP ministerial announcements, etc). ESA programs are promoted at national and regional conferences on a regular basis. Additional efforts will be implemented to disseminate information on ESA programs as widely as possible. Support from Communications will be key to achieving this goal. The ESA Program Office will continue its efforts in this regard and implement the recommendation.	Ongoing process
ii. Ensure that information given to industry covers all relevant political aspects so as to allow companies to prepare tenders that meet the requirements of ESA calls for tenders. More specifically, this information should cover the Canada/ESA context of the program, funding, the European competition and the prime contractor likely to be chosen by ESA.		Space Technology Space Counsellor, Paris	ESA Program Office	ESA Program Office managers continue to work towards carrying out the essence of the recommendation. It is integral to their work. For example, our managers are in constant communication with their ESA counterparts and are gathering information that can then be used by businesses interested in bidding on ESA contracts. The ESA Program Office is also in contact with other ESA member state delegations and takes part in working meetings attended by representatives of Canadian businesses and European partners or prime contractors. Generally speaking, CSA managers explain the Canada/ESA context and funding (this information is also available on EMITS). However, the prime contractor and European competitors are not always known. Our managers and the Counsellor in Paris are constantly making every effort possible to find out about the prevailing competitive situation regarding every given contract and to communicate this information in a timely manner to Canadian industry. The ESA Program Office will continue its efforts in this regard and implement the recommendation.	Ongoing process
iii. Identify and bring together Canadian firms interested in establishing domestic alliances or consortiums to prepare tenders for ESA calls for tenders.		Space Technology	ESA Program Office	Agreed. ESA Program Office managers continue to make every effort to achieve the essence of this recommendation. Our managers are very much aware of the capacities of the Canadian space industry as a whole and can thus put business in touch with each other so that they can work synergistically to prepare bids on ESA calls for tenders. However, Canadian businesses sometimes opt to compete against each other, so our manager must leave it up to market forces, unless of course they have good reason to intervene, such as cases in which the situation is judged to be not in the best interests of Canada. The ESA Program Office will continue its efforts in this regard and implement the recommendation.	Ongoing process
iv. Help Canadian industry to develop alliances with European partners to increase the chances of Canadian proposals being selected and of Canadian companies receiving ESA contracts.		Space Technology	ESA Program Office	Again, our managers will do everything possible to see that this recommendation is carried out in their everyday activities. Our managers are very familiar with major European prime contractors in the space and, though the contacts created within these large groups, are making every effort to represent our industry and foster alliances. It must also be understood that the awarding of contracts is subject to the ESA's firmly entrenched geographical return ("juste retour") policy and ultimately may be decided on the basis of whether or not a given country is owed industrial returns, insofar as the contract work is commensurate with that country's industrial capacity, of course. For these reasons, our managers' proactive efforts may have no impact on ESA bureaucracy. The ESA Program Office will continue its efforts in this regard and implement the recommendation.	Ongoing process
v. Strengthen Canadian efforts and actions in Europe to promote and support companies that have submitted tenders to ESA.		Space Technology Space Counsellor, Paris	ESA Program Office	Again, our managers are already doing everything possible to see that this recommendation is carried out in their everyday activities. Furthermore, the presence of a Space Counsellor in the Canadian Embassy in Paris increases the impact of Canada's efforts in this regard, in that it reinforces our efforts and actions aimed at influencing European decision makers and promotes and supports companies that have submitted tenders to ESA. It must also be understood that, as is the case in Canada, it is difficult, if not impossible (or even counterproductive), to influence the contract awarding process once tenders have been submitted. The ESA Program Office will continue its efforts in this regard and implement the recommendation.	Ongoing process
vi. The CSA should identify or organize trade missions in partnership with other agencies or departments to help Canadian SMEs commercialize their goods and services with a view to marketing them to ESA and Europe.		Space Technology External Relations	ESA Program Office	Based on our experience organizing such missions in Europe, we believe the best formula consists in adding a Canadian event on to a key ESA event and encouraging as many Canadian businesses as possible to take part. A good example of this is the ESA EO Business Day organized by ESTEC on November 6 and 7, 2002, as part of periodic consultations organized by ESA. The CSA's ESA Program Office used such an opportunity to hold a "Canada Day" immediately following the ESA event, allowing it to reach out to the many European industrialists and ESA decision makers attending ESTEC at that time. This formula was a hit with Canadian industrialists, who recognized it as offering good value for money. However, the CSA does not have any funding of its own for organizing trade missions, as such. Moreover, in our experience, Canadian SMEs in the space industry cannot necessarily afford to take part in such missions. The ESA Program Office will continue its efforts in this regard and implement the recommendation as its resources permit.	As opportunities arise. This approach makes us subject to the ESA's organizing events after which Canada could hold a "Canada Day".
5.0 Results-based management and accountability framework (RMAF)
Managers are responsible for measuring the performance of the agreement.
i. Review the Results-Based Management and Accountability Framework (RMAF).		Space Technology	ESA Program Office	The plan will be reviewed before the TB submission currently being prepared is finalized.	By December 8, 2004.
ii. Obtain the resources needed to implement the RMAF so that information can be collected on a regular basis and ensure accountability for performance.		Space Technology	ESA Program Office	Steps will be taken to obtain the resources needed to implement the RMAF so that information can be collected on a regular basis and ensure accountability for program performance. The exact nature of these measures has yet to be determined and will be communicated at a later date. Possible measures include the following: adding a person to coordinate and collect the data needed for RMAF purposes, providing additional funding so that a contract worker can be hired occasionally (at least once a year) to carry out data collection.	Development and confirmation of approach: end of Feb 2005. Budget planning for implementation of RMAF: 2005-2006 work plan. Implementation of data collection: as per RMAF.
iii. The CSA should use tests to verify the information it receives from ESA concerning contracts awarded to Canadian corporations so as to ensure that the data used to measure the performance of the Agreement are reliable.		Space Technology External Relations	Head, ESA Program Office Head, Industrial Policy Relations with Stakeholders	A mechanism for maintaining direct communications between ESA program managers and Canadian companies that have been awarded ESA contracts will be implemented to verify the integrity of data submitted by ESA. These verifications will be carried out once Canada has received quarterly statistics on the geographical return of ESA member states and Canada. The verification will also improve the general quality of the information (eg, the wording of the contract title) entered into the CSA database regarding the regional distribution of space contracts in Canada.	Immediately following the receipt of the next ESA quarterly report on geographical returns, or March 31, 2005 at the latest.
6.0 Risk
Canadian funding is limited and subject to pressure from exchange rates and inflation. These factors limit the availability of funds for programs and may lead to cost overruns.
i. In consultation with TB, the CSA should implement a mechanism for mitigating the risks of exchange rate fluctuations and inflation.		Space Technology Corporate Management/Finance Strategic Development	Head, ESA Program Office	Agreed. In consultation with the TB Secretariat, the ESA Program Office (together with other CSA decision makers with authority in this area) will take care of implementing a mechanism for mitigating the risks of exchange rate fluctuations. The CSA's current mechanism for managing risks could be used to manage this particular risk.	March 31, 2005

APPENDIX 5 - ACRONYMS

ARTES	Advanced Research in Telecommunications Systems
ASTP	Advanced Systems and Technology Program
CSA	Canadian Space Agency
CSP	Canadian Space Program
DRTM	Data Relay Technology Mission
EO	Earth Observation
EOPE	Earth Observation Programme Envelope
EOPP	Earth Observation Preparatory Program
ERS	European Remote Sensing Satellite
ESA	European Space Agency
ESTEC	European Space Research and Technology Centre
EU	European Union
GMES	Global Monitoring for Environment and Security
GNP	Gross National Product
GSTP	General Support Technology Program
POEM/ENVISAT	Preparatory Program of the First Polar Orbiting Earth Observation Mission/Environment Satellite Program
R&D	Research and Development
RMAF	Results-Based Management and Accountability Framework
SAR	Synthetic Aperture Radar
TB	Treasury Board
US	United States

Appendix 6 - Bibliography

Documents

Canada, Affaires étrangères. 2004. Une oeuvre en devenir; Le Canada et la nouvelle UE. Regard sur le monde 22 (été).

Canada; Affaires étrangères. 28 mars, 2000. Accord de coopération entre le gouvernement du Canada et l'agence spatiale européenne.

Canada; Agence spatiale canadienne (ASC). 2002. État du Secteur Spatial Canadien 2002. St. Hubert: ASC/ Relations extérieures.

Canada; ASC. 12 novembre, 2003. La Stratégie spatiale canadienne: Pour servir et inspirer les Canadiens. St. Hubert: ASC.

Canada; ASC. novembre 2004. Répertoire spatial canadien. St. Hubert: Relations extérieures. Accédé le 15 mai, 2004. Disponible sur www.asc-csa.gc.ca/pdf/csd_f.pdf.

Canada; Le Conseil du Trésor. 21 février, 2000. Accord de coopération entre le Canada et l'Agence spatiale européenne (ESA).

Commission européenne. 2002 décembre. The 6th Framework Programme in Brief. Accédé le 22 juin, 2004. Disponible sur europa.eu.int/comm/research/fp6/index_en.html.

Commission des communautés européennes. 23 octobre, 2001. Communication from the Commission to the Council and the European Parliament: Global Monitoring for Environment and security (GMES). Accédé le 6 mai, 2004. Disponible sur www.gmes.info/library/files/Reference%20Documents/com2001_0609en01.pdf.

Commission des communautés européennes. 11 novembre, 2003. Livre Blanc. Espace une nouvelle frontière européenne pour une Union en expansion; Plan d'action pour la mise en œuvre d'une politique spatiale européenne. Accédé le 22 juin, 2004. Disponible sur www.europa.eu.int/comm/space/whitepaper/pdf/whitepaper_fr.pdf.

Commissions des communautés européennes. 21 janvier, 2003. Livre Vert. Politique spatiale européenne. Accédé le 2 août, 2004. Disponible sur www.europa.eu.int/comm/space/doc_pdf/greenpaper_fr.pdf.

Crichton, Meneses R. 6 juin, 2004. European Space Technology Master Plan. Paris: ESA.

Dotto, Lydia. mai 2002. European Space Agency. Canada and the European Space Agency Three Decades of Cooperation. ESA Publications Division: Noordwijk, The Netherlands.

Agence spatiale européenne (ESA). octobre 2003. Agenda 2007 - A Document by the ESA Director General. ESA Publications Department . Accédé l'août, 2004. Disponible sur esamultimedia.esa.int/docs/BR-213.pdf.

ESA. 19 juin, 2001. A European Approach to Global Monitoring for Environment and Security (GMES) Towards meeting User's Needs. Commission of the European Communities. Accédé le 28 juin, 2004. Disponible sur www.gmes.info/what_is/index.html.

ESA. 19 août, 2002. Agreement for the Protection and Exchange of Classification Information. Accédé le 3 mai, 2004. Disponible sur www.fco.gov.uk/Files/kfile/CM%205936%20.pdf.

ESA. Report annuel 1997 à 2002. Accédé le 10 août, 2004. Disponible sur esapub.esrin.esa.it/annuals/annuals.htm.

ESA. 2003. Aurora - European Space Exploration Programme - Executive Summary. Accédé le 6 mai, 2004. Disponible sur esamultimedia.esa.int/docs/AuroraProgrammeExecutiveSummary.pdf.

ESA. 1998. Canada and ESA: 20 Years of Cooperation. ESA Bulletin 96 (novembre): 71-78.

ESA. 30 mai, 1975. Convention portant création d'une Agence spatiale européenne. Accédé le 3 mai, 2004. Disponible sur www.fd.uc.pt/CI/CEE/OI/ESA/convencao_esa-FR.htm.

ESA. mars 2003. Convention portant création d'une Agence spatiale européenne & Règlement Intérieur du Conseil de l'ASE. Accédé le 3 mai, 2004. Disponible sur esamultimedia.esa.int/docs/SP1271Fr_final.pdf.

ESA. Final Report for GMES Initial Period (2001 - 2003). Accédé le 6 mai, 2004. Disponible sur www.sso.admin.ch/Themes/02-Earth_observation/pdf/GMES_Initial_Period_Report_Final_100204.pdf

ESA. GMES Global Monitoring for Environment and Security. GMES Newsletter N.1. Accédé le 6 mai, 2004. Disponible sur www.gmes.info/library/files/Newsletter/GMES_Newsletter_1.pdf.

ESA. 28 mai 1999. Historique et perspectives de la coopération avec Canada. Comité des Relations Internationales. Paris: ESA.

ESA. 31 décembre, 2003. Industrial Policy Committee; Geographical distribution of contracts. Paris: ESA.

ESA. 3 octobre 1997. La situation du secteur spatial européen. Paris: ESA.

ESA. 9 novembre, 2000. Towards a European Space Agency for the European Union. Accédé le 5 juillet, 2004. Disponible sur esamultimedia.esa.int/docs/annex2_wisemen.pdf.

ESA. 7 décembre, 2001. Vers une politique européenne de l'espace: Communication de la Commission au Conseil et au Parlement européen. Disponible sur www.europa.eu.int/comm/space/doc_pdf/spacetoward_fr.pdf.

ESA. 12 janvier 2000. Vingt-cinq ans de relations internationales à l'ASE 1975 - 2000. Paris: Comité des Relations Internationales, ESA.

Guillemette, Raymond. 2003 février. INFO Space Technologies & Application INFO Days; European Space Agency (ESA): Canada; Agence spatiale canadienne /Bureau du programme ESA.

Hickling Corporation. mai 1997. Evaluation of Canada's Participation in the Programs of the European Space Agency: Final Report. Ottawa, Ontario: Hickling Corporation.

Jha, V., Giroux, M., and Leclerc, G. 13 mars, 2002. Report on the Review of Canada's Cooperation with the European Space Agency; Presentation to the Executive Committee. St. Hubert: Canada; ASC.

Web Sites

Canada, Affaires étrangères. 28 juillet, 2003. L'UE en bref. Accédé le 3 mai, 2004. Disponible sur www.dfait-maeci.gc.ca/canadaeuropa/eu/about_eu-fr.asp.

ASC. 2003. Le Canada participera au programme européen de navigation par satellite Galileo. Bulletin électronique (27 novembre). Accédé le 5 mai, 2004. Disponible sur www.asc-csa.gc.ca/fra/apogee/2003/11_galileo.asp.

Canada; Agence spatiale canadienne. 31 décembre, 2002. Description des programmes de l'ESA. Accédé le 10 mai, 2004. Disponible sur www.asc-csa.gc.ca/fra/programmes/esa/description.asp.

ASC. 8 octobre, 2003. Le Canada participera au programme européen de navigation par satellite baptisé Galileo. Accédé le 5 mai, 2004. Disponible sur www.asc-csa.gc.ca/fra/media/salle_nouvelles/communiques/2003/031008.asp.

COM DEV Space Canada. 24 mai, 2001. Com Dev Switch info. Accédé le 2 août, 2004. Disponible sur www.comdev.ca/space/products/products_switch.html.

European Space Agency (ESA). 28 octobre, 2002. About Swift. Accédé 12 août, 2004. Disponible sur www.esa.int/export/esaLP/ESAAE0UHN6D_swift_0.html.

ESA. 17 octobre, 2002. A new candidate mission for the Living Planet Programme. 17 octobre, 2002. Accéde12 août, 2004. Disponible sur www.esa.int/export/esaLP/ESACRRTHN6D_swift_0.html.

ESA. 23 décembre, 2002. Artemis nearly there. Accédé le 6 mai, 2004. Disponible sur www.esa.int/export/esaCP/ESASH58708D_index_0.html.

ESA. 12 juillet, 2002. Artemis, one year after launch. Accédé le 6 mai, 2004. Disponible sur www.esa.int/export/esaCP/ESAW0ZUUJ3D_Improving_0.html.

ESA. 8 octobre, 2003. Artemis team receives award for space rescue. Accédé le 6 mai, 2004. Disponible sur www.esa.int/export/esaTE/SEM1LT0P4HD_index_0.html.

ESA. 28 janvier, 2004. Artificial island arises off Dubai: TERRASAR. Accédé le 4 mai, 2004. Disponible sur www.esa.int/export/esaEO/SEMKRXZO4HD_index_0.html.

ESA. 3 juin, 2004. A 'Swarm' of satellites for a unique look inside the Earth. 3 juin, 2004. Accéde le12 août, 2004. Disponible sur www.esa.int/export/esaLP/SEMXZH2VQUD_swarm_0.html.

ESA. 30 janvier, 2003. Aurora: Arrow Missions. Accédé le 7 mai, 2004. Disponible sur www.esa.int/SPECIALS/Aurora/SEM9JVZKQAD_0.html.

ESA. 23 février, 2004. Aurora: ESA prepares mission to search for life on Mars. Accédé le 4 mai, 2004. Disponible sur www.esa.int/esaCP/SEM0DX1PGQD_index_0.html.

ESA. 30 septembre, 2003. Aurora: Flagship mission. Accédé le 7 mai, 2004. Disponible sur www.esa.int/SPECIALS/Aurora/SEM1NVZKQAD_0.html.

ESA. 19 décembre, 2003. Aurora' s roap map to Mars. Accédé le 4 mai, 2004. Disponible sur www.esa.int/exports/SPECIALS/Aurora/SEMXZY27274OD_0.html.

ESA. 6 février, 2004. Aurora - the European Programme for the Exploration of the Solar System. Accédé le 4 mai, 2004. Disponible sur www.esa.int/SPECIALS/Aurora/ESA9LZPV16D_0.html.

ESA. 23 septembre, 2003. Aurora: the future of space exploration. Accédé le 6 mai, 2004. Disponible sur www.esa.int/SPECIALS/Aurora/SEMBHD0P4HD_0.html.

ESA. 7 février, 2002. Communicating with the world. Accédé le 4 mai, 2004. Disponible sur www.esa.int/esaTE/ESA0UFPZ9NC_index_0.html.

ESA. 24 juillet, 2003. Envisat's applications. Accédé le 4 mai, 2004. Disponible sur www.esa.int/export/esaEO/ESAMLOPZ9NC_index_0.html.

ESA. 28 février, 2003. Envisat celebrates first anniversary in space. Accédé le 4 mai, 2004. Disponible sur www.esa.int/esaCP/SEMBYF2A6BD_index_0.html.

ESA. 1 mars, 2004. Envisat concludes a busy second year in orbit. Accédé le 4 mai, 2004. Disponible sur www.esa.int/export/esaCP/SEMASD2PGQD_index_2.html.

ESA.16 juillet, 2004. ENVISAT Overview. Accédé le 12 août, 2004. Disponible sur www.esa.int/export/esaEO/SEMWYN2VQUD_index_0_m.html.

ESA. 24 juillet, 2003. Envisat: satellite facts. Accédé le 4 mai, 2004. Disponible sur www.esa.int/export/esaEO/ESADW0MBAMC_index_0.html.

ESA. ERS 1 and 2: About ERS. Accédé le 28 septembre, 2004. Disponible sur www.esa.int/export/esaEO/GGGWBR8RVDC_index_0.html.

ESA. 27 juillet, 2004. ERS Overview. Accédé le 28 septembre, 2004. Disponible sur www.esa.int/export/esaEO/SEMGWH2VQUD_index_0_m.html.

ESA. 23 septembre, 2003. ESA awards the first Aurora mission design contracts. Accédé le 4 mai, 2004. Disponible sur www.esa.int/esaCP/SEM4YL0P4HD_Expanding_0.html.

ESA. 18 février, 2003. ESA's satellite reaches geostationary orbit - from loss to full recovery. Accédé le 6 mai, 2004. Disponible sur www.esa.int/export/esaCP/SEMCVY1A6BD_Improving_0.html.

ESA. 19 mars, 2002. ESA and the Commission kick off action plan for Global Monitoring for Environment and Security. Accédé le 6 mai, 2004. Disponible sur www. esa.int/export/esaCP/ESAMLET7YYC_index _0.html.

ESA. 15 juillet, 2002. ESA and the Commission launch a consultation forum on satellite-based Global Monitoring for Environment and security. Accédé le 6 mai, 2004. Disponible sur www.esa.int/esaCP/ESA7DX66K3D_index_0.html.

ESA. 11 décembre, 2000. Europe prepares to take decision on Galileo satellite navigation system. Accédé le 5 mai, 2004. Disponible sur www.esa.int/esaNA/GGGF5DRZ0GC_index_0.html.

ESA. 24 juin, 2003. Europeans say 'Yes' to a strong Europe in space 23 juin, 2004. Accédé le 12 août, 2004. Disponible sur www.esa.int/esaCP/SEM6KAWO4HD_index_2.html.

ESA. 27 mars, 2003. Exploring Space: Aurora. Accédé le 6 mai, 2004. Disponible sur www.esa.int/SPECIALS/Aurora/ESAEMZPV16D_0.html.

ESA. 3 février, 2003. Galileo: Market prospects and business opportunities. Accédé le 4 mai, 2004. Disponible sur www.esa.int/esaNA/GGGMN850NDC_index_0.html.

ESA. 18 novembre, 2003. GMES: 4th Forum in Braveno, Italy, 26-28 novembre. Accédé le 6 mai, 2004. Disponible sur www.esa.int/export/esaCP/SEMOX7XLDMD_Protecting_0.html.

ESA. 9 avril, 2003. Industry gathers for ESA/EC global monitoring program. Accédé le mai 6, 2004. Disponible sur www.esa.int/esaCP/SEMXS15V9ED_index_0.html.

ESA. 27 mars, 2002. Mobile communications. Accédé le 4 mai, 2004. Disponible sur www.esa.int/esaTE/ESA8QIPZ9NC_index_0.html.

ESA. 10 mars, 2004. More about Aurora. Accédé le mai 4, 2004. Disponible sur www.esa.int/SPECIALS/Aurora/SEMZOS39ZAD_0.html.

ESA. 19 août, 2002. September roll-out planned for 83 million euro GMES Services program. Accédé le 6 mai, 2004. Disponible sur www.esa.int/esaCP/ESAHC8ZPD4D_index_0.html.

ESA. 27 mars, 2002. Technological breakthrough with Artemis. Accédé le mai 4, 2004. Disponible sur www.esa.int/esaTE/ESAYHGPZ9NC_index_0.html.

ESA. 24 juillet, 2003. What is Envisat? Accédé le mai 4, 2004. Disponible sur www.esa.int/export/esaEO/ESAXU0MBAMC_index_2.html.

ESA. 12 février, 2003. What is Galileo? Accédé le mai 5, 2004. Disponible sur www.esa.int/esaNA/GGGMX650NDC_index_0.html.

ESA. 27 mars, 2002. What is special about Artemis? Accédé le mai 4, 2004. Disponible sur www.esa.int/export/esaTE/ESAZGGPZ9NC_earth_2.html.

ESA. 12 février, 2004. Who is involved in Galileo? Accédé le mai 4, 2004. Disponible sur www.esa.int/esaNA/GGG28850NDC_index_0.html.

Space ref.com. 18 janvier, 2001. ESA continues work on Galileo pending EU's deferred decision. Accédé le mai 5, 2004. Disponible sur www.spaceref.com/news/viewpr.html?pid=3621.