2020 State of the Canadian Space Sector Report - Facts and Figures 2019

Policy Branch

This report is produced by the Economic Analysis and Research Team, Policy Branch, at the Canadian Space Agency (CSA).

Contact

• David Haight, Chief Economist, david.haight@asc-csa.gc.ca
• Aaron Parsons, Analyst, aaron.parsons@asc-csa.gc.ca

Please send media inquiries to CSA Communications, 450-926-4370, asc.medias-media.csa@asc-csa.gc.ca.

How much has COVID-19 impacted your revenues from April–September 2020 as compared to April–September 2019?

How much has COVID-19 impacted demand for your products or services in 2020?

How has COVID-19 impacted your employment level (i.e. the number of full-time equivalents in your company)?

If applicable, have you experienced supply chain disruptions in 2020 because of COVID-19? If so, to what degree?

Gender Distribution of Employees

In 2019, the CSA adjusted the gender question in the workforce section of the survey. The question asked for respondents to identify the gender breakdown of their space-related employees by percentage, under the headings Male, Female, and Other. The previous survey asked for a breakdown of new space-related employees.

In total, 140 organizations responded to the workforce section on gender, representing 67% of companies surveyed. Results indicated that the Canadian space sector workforce is predominantly made up of people who identify as male (72%). Those who identify as female represented the remaining 28% of the workforce. The Other category received very few responses, accounting for only 0.2% of employees in the Canadian space sector.

Analyses across multiple dimensions of the Canadian space sector were completed to determine if there are particular trends among genders. When comparing gender along the value-chain and sectors of activity, there appears to be minimal fluctuation, with no more than +/-6% (from the average) between the different categories.

Notable differences include a higher predominance of those who identify as female in the Services portion of the value-chain at 33%, as well as in the Navigation (33%) sector of activity when compared with the average of those who identify as female. Those who identify as male were most concentrated in the Satellite Operations (75%) and Products and Applications (76%) section of the value-chain. Those who identify as male were also overly represented in the Space Exploration (78%) sector of activity.

Statistics Canada Linkable File Environment

The CSA recently collaborated with Statistics Canada through the Linkable File Environment (LFE) to produce statistics relevant to the Canadian space sector. The LFE is a system that enables other government departments and academia to link datasets with Statistic Canada's, in order to produce customized data tables and analyses. Through the LFE, other government departments can perform analyses using datasets such as the Business Register, Canada Revenue Agency administrative data, and business surveys.

The analysis using the Statistics Canada LFE revealed that companies in the Canadian space sector (excluding broadcasting) have an average employee salary of $74,000. Broadcasting was excluded for purposes of data consistency.

Average salaries in space outpace Aerospace, Information and Communication Technology (ICT) sectors, as well as the broader Canadian Average across the economy.

The Satellite Communication sector had on average, the highest salaries for employees at $95,000, while science and exploration had the lowest average salaries at $67,000.

Medium-sized companies (100–499 employees) pay the highest average salary at $84,000, followed by small companies (1–99 employees) at $76,000, and paying the lowest relative salary were large companies (500+ employees) with salaries averaging $62,000.

Gender: Statistics Canada Linkable File Environment

Utilizing the LFE, an analysis of CEO genders was assessed across Canadian space sector companies. Sixty-three percent of Canadian space sector company CEOs identify as male, 13% identify as female, while the remaining 25% are unknown. Representation of female-identified people at the top of Canadian space sector companies is similar to that of the Information and Communication Technology (ICT) sector and the Canadian Average. There is, however, a larger unknown proportion amongst space companies.

CEOs who identify as female are present in larger numbers in small and large firms when compared to medium-sized firms. Those who identify as female are equally as likely to be CEOs of either small or large firms, but are non-existent in the medium-sized firms.

Occupations

The CSA divides the space workforce into eight main occupation categories: Engineers and Scientists, Technicians, Management, Administration, Marketing and Sales, Students, Health Professionals, and Other Employees.

In 2019, engineers and scientists comprised the largest category of employment with 3,498 FTEs, representing 33% of the total space workforce. Employees in the administration category made up the second largest group with 2,546 FTEs, accounting for 24% of the workforce. Technicians accounted for 11% of the workforce with 1,142 FTEs. Management, marketing and sales, students, and other employees made up the remainder.

STEM Employees

The STEM indicator tracks the number of engineers, scientists, technicians, management, health professionals and students working in the space sector. STEM employees totalled 6,643 FTEs and represented 63% of the total Canadian space workforce, but there are significant differences between the upstream and the downstream segments: 85% of the workforce in the upstream segment are STEM, while only 38% of the workforce in the downstream segment are STEM.

The breakdown of the STEM workforce by region largely followed the regional breakdown of the total space workforce. The majority of STEM employees can be found in Ontario and Quebec, which accounted for 44% (2,904 FTEs) and 25% (1,690 FTEs) of Canada's STEM workforce, respectively. The Prairies (Alberta, Saskatchewan and Manitoba) followed with 16% (1,030 FTEs) of Canada's STEM workforce. B.C. accounted for 10% (654 FTEs) of Canada's STEM workforce, while the Atlantic region (New Brunswick, Prince Edward Island, Newfoundland and Nova Scotia) accounted for 6% (366 FTEs) of Canada's STEM workforce.

Of particular note is the number of STEM employees by region. In the Prairies and B.C., STEM employees accounted for 92% and 88% of the provincial space workforce, respectively. STEM employees accounted for 65% of the space workforce in Ontario, 50% in Quebec and 46% in Atlantic Canada. A lower share of STEM employees often reflects an industry that includes more downstream companies (especially broadcasting companies), which tend to employ a higher number of administrative employees.

Highly Qualified Personnel (HQP)

In 2019, HQP accounted for 66% of Canada's space workforce, or 6,936 FTEs. While 77% of the upstream workforce are HQP, only 54% of the downstream workforce are HQP.

Overall, 44% (3,068) of Canada's HQP worked in Ontario in 2019, while 28% (1,976) of them worked in Quebec. The Prairies accounted for 11% (771) of Canada's HQP. B.C. and the Atlantic region accounted for 9% (630) and 7% (492) of Canada's HQP, respectively.

In B.C., HQP accounted for 85% of the workforce, the highest proportion in Canada. HQP accounted for 69% of the workforce in the Prairies, 68% in Ontario, 62% in Atlantic Canada and 58% in Quebec.

Our previous definition of HQP tracked the numbers of engineers, scientists and technicians in the Canadian space sector. According to this definition, the number of engineers, scientists and technicians increased by 13%, or 520 FTEs, year-over-year, numbering 4,639 employees in 2019.

Space Labour Force Challenges and Needs

In 2019, 34% of Canadian space companies faced difficulties hiring personnel to the extent that positions went unfilled. The professions for which companies had the most difficulties finding employees were engineers, scientists and technicians, as well as marketing and sales personnel. The two main reasons highlighted for hiring difficulties were competition from other industrial sectors for the same talent, followed by applicants lacking the skills required for the position.

Companies dealing with employee shortages used three main strategies to deal with the problem: they provided internal training to their employees, they shared the workload amongst existing employees and they outsourced some of the work.

Over the next five years, Canadian space companies will be looking for employees with sought-after skills related to software development, electrical engineering systems, mechanical engineering systems, as well as business development and commercialization.

Revenues by Region

Quebec

Revenues in Quebec declined by 10%, or $151M, in 2019, totalling $1.3B. Domestic revenues decreased by 13%, or $150M, from $1.2B in 2018 to $1.0B in 2019; exports were constant at $288M in 2018 and $287M in 2019.

Between 2015 and 2019, Quebec's total revenues decreased by 22%, from $1.67B to $1.30B. This was driven by a 30% decline in domestic revenues, which went from $1.44B in 2015 to $1.02B in 2019. Export revenues grew by 28%, from $225M to $287M over the same period.

Quebec accounted for 24% of Canadian space sector revenues in 2019. Quebec had almost six times as many upstream segment organizations as downstream segment organizations, while revenues were heavily concentrated in the downstream segment (79%) rather than in the upstream (21%).

Workforce by Region

• British Columbia: 7% (739 FTEs) of Canada's space workforce, an increase of 16% (101 employees) over last year.
• Prairies: 11% (1,116 FTEs), an increase of 16% (150 employees).
• Ontario: 43% (4,497 FTEs), an increase of 11% (450 employees).
• Quebec: 32% (3,394 FTEs), an increase of 7% (212 employees).
• Atlantic Canada: 8% (795 FTEs), an increase of 8% (61 employees).

Satellite Communication

In 2019, Satellite Communication generated $4.6B in revenues, accounting for 83% of total space revenues. The vast majority (88%) of Satellite Communication revenues was derived from activities in the downstream segment, broken down as follows:

• Satellite Operations: $932M
• Products and Applications (e.g. antennas): $748M
• Broadcasting Services: $2.0B
• All other telecommunication services: $300M

The remainder of Satellite Communication revenues (12%) was related to upstream segment activities:

• Research, Engineering and Consulting: $58M
• Space Segment Manufacturing: $237M
• Ground Segment Manufacturing: $239M

Satellite Communication revenues declined by 1%, or $56M, in 2019. Between 2015 and 2019, Satellite Communication revenues experienced 2% growth, or $102M, from $4.5B to $4.6B.

Earth Observation (EO)

In 2019, EO revenues totalled $248M, accounting for 4% of total space revenues. The majority of EO revenues (60%) was in the upstream segment:

• Research, Engineering and Consulting: $47M
• Space Segment Manufacturing: $44M
• Ground Segment Manufacturing: $57M

The remainder of revenues (40%) was related to activities in the downstream segment:

• Satellite Operations: $22M
• Products and Applications: $40M
• Services: $37M

EO revenues declined by 11%, or $30M, in 2019. Between 2015 and 2019, EO revenues experienced a decline of 41%, or $175M, from $423M to $248M.

Space Exploration

Space Exploration revenues totalled $119M in 2019, accounting for 2% of total space revenues. The upstream segment accounted for 90% of Space Exploration revenues, distributed as follows:

• Research, Engineering and Consulting: $81M
• Space Segment Manufacturing: $22M
• Ground Segment Manufacturing: $4.3M

The remainder of revenues was related to activities in the downstream segment:

• Satellite Operations: $0.2M
• Products and Applications: $11M
• Services: $0.8M

Space Exploration revenues contracted by 3%, or $4M, in 2019. Between 2015 and 2019, revenues from Space Exploration grew by 6%, or $7M, from $112M to $119M.

Navigation

Navigation revenues reached $418M in 2019, which amounted to 8% of total space revenues. In Canada, 98% of space activities related to Navigation are in the downstream segment. Navigation revenues are broken down as follows:

• Satellite Operations: $0.2M
• Products and Applications: $259M
• Services: $152M

The remainder of activities, which relate to the upstream segment, amounts to roughly $7M, divided as follows:

• Research, Engineering and Consulting: $4.4M
• Space Segment Manufacturing: $0.7M
• Ground Segment Manufacturing: $1.9M

From 2018 to 2019, revenues decreased by 25%, or $141M. Fluctuations in Navigation revenues from 2018 to 2019 are primarily attributable to a minor reclassification of activities by survey respondents, with the declines in Navigation being moved to non-broadcasting Satellite Communication Services. Between 2015 and 2019, revenues from Navigation increased by 103%, or $212M, from $206M to $418M.

Space Science

In 2019, Space Science revenues totalled $111M, which represents 2% of total space revenues. The majority of space science revenues was in the upstream segment:

• Research, Engineering and Consulting: $91M
• Space Segment Manufacturing: $12M
• Ground Segment Manufacturing: $0.6M

With the remainder in the downstream segment:

• Satellite Operations: $2.8M
• Products and Applications: $3.4M
• Services: $0.7M

Space Science increased dramatically in 2019, growing 68% to $111M. The increased response rate and small size of the Space Science segment makes it more susceptible to fluctuations from major investments, and therefore the substantial year-over-year growth is not unexpected. Between 2015 and 2019, revenues from Space Science increased by 58%, or $41M, from $70M to $111M.

Other Revenues

From 2018 to 2019, other revenues grew by 7%, from $29M to $31M, and accounted for 1% of total space revenues. Activities that fall into the "Other" sector are by nature variable and subject to re-categorization; therefore, changes in this sector are less statistically relevant than for the previously noted sectors.

Domestic vs. Export Revenues

In 2019, Canadian space revenues totalled $5.5B, of which 58% ($3.2B) were from domestic sources and 42% ($2.3B) were from exports. Domestic revenues declined by 6.3%, or $213M, in 2019; exports meanwhile grew by 1%, or $32M.

The compound annual growth rate (CAGR) between 2015 and 2019 was +0.9% for the entire space sector, -3.7% for domestic revenues, and +9.7% for exports.

Broadcasting is a large contributor to the space economy but is in continued decline as reflected in the divergence in numbers when broadcasting is excluded vs. included in the analysis. When excluding broadcasting, total revenues generated by the Canadian space sector grew from $2.7B in 2015 to $3.4B in 2019. With the exclusion of broadcasting, the CAGR between 2015 and 2019 was 5.9% for the entire space sector, -0.2% for domestic revenues and +9.7% for exports.

Export Regions

Export revenues remained consistent at $2.3B in 2019; however, the majority of regional exports declined with the exception of a significant increase in Asia.

The U.S. remained the main destination for Canadian space exports, totalling 56% of total exports. Revenues derived from exports to the U.S. contracted by 1%, or $10M, from $1.3B in 2018 to $1.29B in 2019.

Europe remained Canada's second largest market for space exports. Canadian exports to Europe declined by 3%, or $14M, from $451M in 2018 to $437M in 2019. Europe accounted for 19% of total exports.

Exports to Asia increased by a significant 29%, or $81M, from $282M in 2018 to $363M in 2019. Asia accounted for 16% of total exports.

Exports to South America remained flat with no growth (-$0.6M), from $118M in 2018 to $117M in 2019. The region accounted for 5% of total exports.

Exports to Central America, the Caribbean and Mexico declined by 23%, or $8.8M, from $39M in 2018 to $30M in 2019. This region accounted for 1% of total export revenues.

Exports to Oceania decreased by 35%, or $8.5M, from $24M in 2018 to $16M in 2019. Oceania accounted for 1% of total export revenues.

Export revenues from Africa decreased by 16%, or $4.0M, from $25M in 2018 to $21M in 2019. Generally speaking, export growth to this region has been uneven; years of strong growth have been followed by declines and vice versa. Africa accounted for 1% of total Canadian space export revenues.

Finally, in 2019, 2% of total exports, or $35M, were not allocated to a specific region of the world.

Domestic Customer Breakdown by Type

In 2019, 89% of domestic revenues were from non-government clients. Non-government customers can be individuals, such as subscribers to television and radio broadcasting services. Other non-government customers include businesses, where space-derived information products are integrated into business operations (e.g. Navigation and EO data). A small proportion of non-government revenues is tied to financing or sales to non-profit organizations and foundations.

Government customers make up the remaining 11% of the domestic market. Government customers represent the majority of domestic upstream revenue, where they constitute 83% of revenues. Government customers are mainly involved in the Research, Engineering and Consulting sub-segment. Non-government revenues constitute the remaining 17%. In the domestic downstream segment, the situation is reversed, as government customers account for only 3% of revenues.

The majority of government funding comes from federal sources. The top five sources of federal government revenue reported by space organizations in 2019 in order of funding size were the CSA, the Department of National Defence (DND), the Natural Sciences and Engineering Research Council (NSERC), the Canada Foundation for Innovation (CFI), and Public Services and Procurement Canada (PSPC).

Foreign Customer Breakdown by Type

Non-government customers are the largest market segment abroad, accounting for 88%, or $2.0B, of export revenues. Foreign government clients make up the remaining 12%, or $277M, of exports. This is equally true for both the upstream and downstream segments, where non-government revenues account for 84% and 88% of revenues, respectively.

Exports to commercial clients are strong in three main areas of the value chain: Manufacturing, Satellite Operations, and Products and Applications. In terms of Manufacturing, several companies are producing components and parts for foreign prime companies through global value chains, with very occasional sales related to manufacturing of complete end-to-end space systems. Satellite Operations include primarily sales related to operations for commercial telecommunications systems. Products and Applications sold to non-government customers are mostly related to antennas, receivers and other ground equipment in the Navigation and Satellite Communication sectors. Non-government exports for EO are limited, but a small market does exist for data and software applications.

There is also a small portion of non-government entities, mainly foundations, that provide funding to Canadian universities and research centres. This is a relatively small amount, and it is categorized as export revenue in the consolidated analysis of the Canadian space sector.

Attribution

Data are also supplemented based on CSA transfer payments (Contracts, Grants, and Contributions) in cases where this information has not been included as part of the survey responses to more fully capture revenues.

In addition, there is a limited number of cases where data are compiled from publicly disclosed reports (e.g. for publically traded companies) and verified through consultation with company officials.

Economic Trends

Prior to 2015, the CSA made changes to the methodology, whereby significant adjustments impacted indicators for domestic revenues, Satellite Communication revenues, government vs. non-government funding, and workforce. For that reason, the economic trend analysis for this report assesses the past five years (2015–2019). For information on the economic trends prior to 2015, readers are invited to consult previous editions of this report.

Statistics Canada Linkable File Environment

Through a linkage process, the Linkable File Environment (LFE) leverages the single-subject ability of existing surveys and administrative data to inform on business and economic issues. It positions these surveys and administrative data to support longitudinal and cross-sectional analysis and offers opportunities to use additional variables to assess entrepreneurship, employment, productivity and competitiveness.

Additional information on the LFE is available at: https://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getSurvey&SDDS=6000

Economic Impact Analysis

As described in the OECD's 2012 Handbook on Measuring the Space Economy, measuring economic impacts in the space sector is a challenging task, as there is no single industrial classification for space activities. In order to overcome this difficulty, a model was developed jointly by the CSA and Innovation, Science and Economic Development Canada (ISED) to calculate the space sector's contribution to GDP (gross domestic product or value added). This process involved taking into account the various industrial classifications, weighing them and categorizing them using a value-chain approach, in order to develop a set of multipliers based on Statistics Canada's Input-Output tables. These multipliers are used to determine the impacts on GDP and employment of the space sector, the suppliers to the space sector, and the consumer spending by employees associated with both the space sector and its supply industry.

A detailed explanation of the Economic Impact Model follows:

1. North American Industry Classification System (NAICS) codes were retrieved for each space company through Statistics Canada's Business Register. This exercise generated a list of 11 separate industrial classifications that covered all active Canadian space sector companies.
2. Canadian space companies were categorized into a value-chain model based on the goods and services they provide: Research, Engineering and Consulting; Manufacturing; Satellite Operations; Service Providers; and Broadcasting Services.
3. Universities, research centres and associations were grouped together under Research, Engineering and Consulting, as in most cases their space sector activities are related to R&D.
4. The grouping of NAICS codes in each of the value-chain categories were then weighted for their relative importance within that particular category. Weighting was established on the basis of workforce tied to each NAICS code. The more workforce associated with organizations in a particular NAICS code, the heavier that NAICS code was weighted relative to the grouping of NAICS codes in that value-chain category.
5. Customized economic multipliers were then built for each value-chain category based on Statistics Canada's input-output accounts for existing NAICS codes. These multipliers are at three levels: space sector, supply industry and consumer spending by associated employees.
6. Employment levels for each value-chain segment of the space sector (collected directly from companies through the questionnaire) are entered in the Economic Impact Model. The customized economic multipliers are then applied to generate the space sector's total GDP and workforce impact numbers.

The "multiplier effect" refers to the total impacts (space sector, supply industry and consumer spending by associated employees) divided by the initial space sector impact. This gives the reader an idea of the impact that one job or one dollar in the space sector has on the wider economy.

Note: Two types of primary inputs can be used in an input-output model: revenues or employment. Employment has been chosen here, as it provides a more accurate portrait of the true level of economic activity being performed within Canada's borders. The results of this analysis can be considered a conservative estimate of Canada's space sector impact, particularly when compared to third-party studies or comparative international reports, which may use different methodologies.

Upstream Segment

The upstream segment refers to the effort required to design, test, build, integrate, and launch^{Footnote 2} assets into space.

• Research, Engineering and Consulting: Research and development (R&D) related to non-commercial or pre-commercial activities; applied science; design and testing of spacecraft, satellites and payloads or components thereof; support services directed at enabling other space sector actors throughout the value chain, including outreach activities, legal services, insurance provision, market research, policy and management services.
• Space Segment Manufacturing: Building and integration of spacecraft, satellites, payloads or any component thereof.
• Ground Segment Manufacturing: Building and integration of facilities and equipment on Earth for satellite operations, often known as "ground stations."

Downstream Segment

The downstream segment refers to the effort required for the day-to-day operation of space assets, manufacturing of products and software applications that transform space data and signals into useful end products, and services provided to end-users.

• Satellite Operations: Day-to-day management of satellites and spacecraft once they are in space, e.g. telemetry, tracking and command; monitoring, recovery operations and collision avoidance; mission planning for satellite passes; uplinks and downlinks for signal processing to reception facility; lease or sale of satellite capacity.
• Products and Applications: Manufacturing/development of software or hardware that enable the transformation of space-derived resources into a usable/useful format, e.g. computer software applications, chipsets, Very Small Aperture Terminals and other terminals, antennas, satellite phones, video and audio receivers-decoders, and GPS devices. This category also includes publishing digital or print books, atlases and maps using space-based data.
• Services: Provision of services which are dependent on space-based signals or data to various end-users (individual consumers, government departments, or businesses), e.g. subscriptions to satellite radio, phone, television or Internet services; engineering, architectural and environmental consulting based on the processing and analysis of Positioning, Navigation and Timing (PNT) or Earth Observation (EO) data; support services provided to users of space-based products and applications, such as provision of computer consulting and facilities management, data processing, Web hosting and portals, and streaming services.