State of the Canadian Space Sector Report 2023

OBJECTIVE

The State of the Canadian Space Sector Report provides factual information about the Canadian space sector. The report, which is now in its 26th edition, is based on a questionnaire sent to companies, not-for-profit organizations, research centres and universities with space-related activities in Canada.

To align with international practices, the publication is identified by the year in which the survey took place (2023) but reports on data covering the year 2022. All of the information in the report represents data from 2022, with the exception of the work done in collaboration with Statistics Canada, where data covers up to 2020.

The organization-specific information used to compile this report remains strictly confidential and will not be released in any manner other than aggregate form. Consequently, in certain circumstances, a detailed explanation or in-depth reporting of the results cannot be provided in order to protect the confidentiality of the respondents.

Of note, the numbers presented throughout the report may not add up precisely to the totals provided due to rounding. Additionally, the findings presented throughout this report are provided at current prices (i.e. unadjusted for inflation).

ABOUT THE AUTHORS

FOR MORE INFORMATION

For more information about the Canadian space sector, or for an electronic copy of this report, please go to www.asc-csa.gc.ca/eng/publications.

ACKNOWLEDGMENTS

The CSA wishes to acknowledge all those in the Canadian space sector who responded to the questionnaire. Without them, this report would not have been possible.

LARGE COMPANIES

Only 5% of organizations in the space sector were large companies in 2022 (defined as employing >500 workers). These organizations represent the foundational infrastructure of the Canadian space sector, generating the majority of revenues, the largest portion of workforce and HQP, while also significantly contributing to STEM, BERD, and exports.

SMALL AND MEDIUM-SIZED ENTERPRISES

In 2022, 73% of Canadian space organizations were SMEs (defined as employing 1 to 499 workers). Despite the smaller workforce, SMEs contribute significantly to the Canadian space sector by providing the largest amount of STEM jobs, BERD, and exports.

UNIVERSITIES AND RESEARCH CENTRES

Over 40 universities and research centres across the country participate in the Canadian space sector. Universities and research centres' funding is primarily domestic, amounting to $121M in 2022, and mostly from government: $92M from the federal government, and $12M from provincial governments. The remainder of domestic revenues ($16M) came from private foundations and companies, with international sources supporting the final $9M in funding. Contributions to overall revenues are small, but these organizations employed 20% of the total space sector workforce in 2022, of whom 86% are HQP and 95% are STEM employees.

CANADA'S LEADING SPACE ORGANIZATIONS

In 2022, Canada's top 30 space organizations (i.e. based on revenues) were comprised of 26 companies and 4 universities. The majority of these organizations are SMEs, displaying the diversity of organizations contributing to the Canadian space sector.

TOTAL REVENUES

In 2022, total revenues in the Canadian space sector reached , $5.0B, a +3.1% ($153M) increase year-over-year. The compound annual growth rate (CAGR) of the space sector between 2018 and 2022 was −2.86%.^{Footnote 1} Despite the negative CAGR, revenues in the Canadian space sector appear to be trending upward.

ECONOMIC IMPACT – GROSS DOMESTIC PRODUCT

The space sector contributed $3.2B to Canada's GDP in 2022. This represents the unduplicated value of goods and services produced in Canada by the space sector, and by other industries as a result of the Canadian space sector's supply chain purchases and of associated employees' consumer spending. Total GDP contribution was broken down into the following:

• $1.63B in space sector impacts;
• $0.70B in supply industry impacts; and
• $0.83B in impacts related to consumer spending by associated employees.

The space sector therefore creates benefits in the larger economy with a GDP multiplier of 1.93. In other words, every dollar that the space sector contributed to GDP resulted in an additional $0.93 in GDP contributions for the broader economy.

From 2018 to 2022, the GDP impact of the Canadian space sector increased by 19% ($506M), translating into a 4.5% CAGR. In part, growth in GDP has been supported by an increasing workforce over the past five years.

MARKET SHARE BY CUSTOMER LOCATION

MARKET SHARE BY CUSTOMER TYPE

Customers are categorized as either government or non-government. Government customers include domestic governments (municipal, provincial, federal) and foreign governments. Non-government customers include businesses, individual consumers and non-profit organizations or foundations (both domestic and foreign).

Overall, 14% of the space revenues in 2022 derived from government customers and 86% from non-government customers.

Both upstream and downstream segment organizations derived revenues from non-government clients in 2022. The upstream segment derived 59% of revenues from non-government clients, whereas the downstream segment derived 93% of revenues from non-government clients.

MARKET SHARE BY VALUE-CHAIN SEGMENTS

Space sector revenues can be broken down into value-chain segments and sub-segments based on the type of work that the organization is carrying out. The two main segments this analysis has been split into are upstream and downstream activities. The upstream segment – comprised of the research, engineering and consulting as well as the space segment manufacturing and ground segment manufacturing sub-segments – generated $1.07B in revenues and grew +30% in 2022. The downstream segment – comprised of the satellite operations, manufacturing of products (e.g. terminals), development of software applications, and the provision of services (e.g. broadcasting) sub-segments – generated $3.98B in revenues, declining by −2% in 2022.

A detailed description of the value-chain categorization is provided in Annex C. Revenues in each sub-segment can be broken down as follows:

• Research, Engineering and Consulting amounted to $431M in 2022, a 32% increase ($105M) from 2021. This sub-segment accounted for 9% of total revenues in 2022.
• Space Segment Manufacturing amounted to $465M in 2022, an increase of 48% ($150M) from 2021. It accounted for 9% of total revenues.
• Ground Segment Manufacturing amounted to $175M in 2022, a 7% decline ($13M) from 2021. It accounted for 4% of total revenues.
• Satellite Operations amounted to $830M in 2022, a 2% increase ($18M) from 2021. It accounted for 16% of total revenues.
• Products and Applications totalled $664M in 2022, an increase of 8% ($50M) from 2021. It accounted for 13% of total revenues.
• Services amounted to $2.5B in 2022, a 6% decline ($157M) from 2021. It accounted for 49% of total revenues in 2022.

MARKET SHARE BY SECTOR OF ACTIVITY

Space sector revenues can be further divided into sectors of activity based on the type of work that the organization is carrying out. In 2022, revenues returned to growth in most Canadian space sectors of activity from the impacts of the pandemic.

A detailed description of the sectors of activity categorization is provided in Annex C. Revenues for each sector of activity are as follows:

• Satellite Communication generated $3.8B in revenues, decreasing by $112M (−3%) from 2021, and accounting for 75% of total space revenues.
• Earth Observation (EO) revenues totalled $349M, growing by $79M (+29%), and accounting for 7% of total space revenues.
• Space Exploration revenues totalled $231M in 2022, increasing by $67M (+41%), and accounting for 4% of total space revenues.
• Navigation revenues grew to $550M in 2022, an increase of 25% or $110M, which represented 11% of total space revenues.
• Space Science revenues totalled $101M in 2022, increasing by $8M (+8%), which represents 2% of total space revenues.
• Other revenues increased by 2%, rising to $38M, and accounting 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.

TOTAL WORKFORCE

In 2022, the space sector workforce totalled 12,624 jobs, an 8.6% increase, or 994 jobs. Over the past five years there has been significant growth in employment across the Canadian space sector.

The space sector workforce consists of 52% of jobs in the upstream segment, 41% of jobs in the downstream segment, and the remaining 7% of jobs at the CSA.

ECONOMIC IMPACT – WORKFORCE

The space sector supported a total of 25,236 jobs in Canada. The total workforce contribution was broken down into the following:

• 12,624 space sector jobs; and
• 12,612 indirect and induced jobs:
  • 6,691 supply industry jobs; and
  • 5,921 jobs created and supported as a result of consumer spending by associated employees.

The space sector creates jobs in the broader economy with a workforce multiplier of 2.0. In other words, every job in the space sector supports an additional 1.0 job in the broader economy.

From 2018 to 2022, the workforce impact of the Canadian space sector increased by 12% (2,635 jobs), translating into a 2.8% CAGR. Workforce impacts have been influenced most significantly by increases in direct jobs in the space sector, as the indirect and induced impacts have been more modest.

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. There were minimal shifts in the composition of the workforce in 2022 with a variability of +/−3%, as results were similar to previous years.

However, in reviewing the changes in employment across occupations over five years (2018–2022), there is significant growth in total employees amongst engineers and scientists (+1,432), students/interns (+592), other (+389), and management (+200). The remaining categories were relatively flat, with the exception of a decline in administration.

STEM EMPLOYEES

The STEM indicator tracks the number of engineers, scientists, technicians, management, health professionals and students working in the space sector. STEM employees grew +16% and totalled 8,408 jobs in 2022, which represented 67% of the total Canadian space workforce.

There are significant differences between the upstream and the downstream segments. In 2022, 86% of the workforce in the upstream segment were STEM, while only 44% of the workforce in the downstream segment were STEM.

HIGHLY QUALIFIED PERSONNEL (HQP)

The HQP indicator identifies the number of space sector employees with at minimum a bachelor's degree. HQP employees grew +10% and accounted for 8,593 jobs in 2022, which represented 68% of Canada's space workforce.

The differences between HQP jobs in the upstream and the downstream segments are less pronounced than for STEM employees, but are still significant. While 76% of the upstream workforce were HQP in 2022, only 60% of the downstream workforce were HQP.

SPACE LABOUR FORCE CHALLENGES AND NEEDS

In 2022, 65% of Canadian space companies faced difficulties hiring personnel to the extent that positions went unfilled.

The professions for which companies had the most difficulty finding employees were unchanged in 2022, and included engineers, scientists, technicians, and management, which is similar to the types of jobs that have been difficult to hire for since 2017.

The main reasons highlighted for hiring difficulties were applicants lacking the skills required for the position, followed by competition from other industrial sectors for the same talent, and a lack of relevant experience.

In 2022, companies dealing with employee shortages used three main strategies to deal with the problem: they provided internal training to their employees, offered overtime for existing employees, and/or 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.

GENDER DISTRIBUTION OF EMPLOYEES

In total, 140 organizations responded to the workforce section on gender in the 2022 survey, representing 72% of organizations surveyed.

Results indicated that the Canadian space sector workforce is primarily made up of people who identify as men (69%) and people who identify as women (31%), while those who identify as non-binary people represented 0.2% of employees in the Canadian space sector.

STATISTICS CANADA LINKABLE FILE ENVIRONMENT (LFE) DATA: SEX OF PRIMARY OWNERS

Based on our collaboration with Statistics Canada, we were able to determine that in 2020, most of the primary owners of space sector companies were male (82%) while a much smaller percentage were female (18%). These results have been relatively stable since 2017 – and the percentage of female primary owners in the space sector remains lower than organizations in the broader Canadian economy (26%).

REVENUES AND WORKFORCE BY REGION

BUSINESS EXPENDITURES ON R&D (BERD) (COMPANIES ONLY)

In 2022, there were 83 companies engaged in R&D activities, with BERD reaching $593M. This represents an 8% increase from the $547M spent in BERD in 2021. SMEs accounted for approximately two-thirds of BERD in 2022, while large firms made up the remaining one-third. Upstream organizations were responsible for 26% of total space sector BERD, while downstream organizations represented the bulk of investments at 74% of total space sector BERD.

R&D spending in 2022 was financed through internal sources (e.g. company profits reinvested in R&D) at 79% ($469M), while the remaining 21% ($124M) was financed through external funding sources (e.g. government grants and contributions).

R&D INTENSITY LEVEL (COMPANIES ONLY)

The industrial R&D intensity indicator reflects the ratio of BERD spending relative to the GDP contribution of the space sector. It serves as an indicator of the level of effort and investment by a company (or by an industry as a whole) in innovative activities such as the creation of new products, services and technologies, or the improvement of business functions such as production techniques. Industrial R&D intensity for companies operating in the space sector was 50% in 2022. The upstream segment is less R&D intensive than the downstream: upstream R&D intensity is 29%, while downstream R&D intensity is 66%.

COMMERCIALIZATION OF EXTERNALLY FUNDED R&D PROJECTS (ALL ORGANIZATIONS)

Organizations report on the level of commercialization of projects that were initially funded by government (externally funded R&D). Organizations derived $213M (from 30 organizations in 2022) in revenues through the commercialization of externally funded R&D projects. This represents a 25% decline from the $283M in 2018 commercialization revenues. The upstream segment accounted for 74% of commercialization revenues, while the downstream segment accounted for the remaining 26%. Almost all commercialization takes place through companies.

RETURN ON INVESTMENT

For the past six years the CSA has been surveying companies to determine the return on investment (ROI) from CSA space development programs.

The response rate for the ROI section of the survey was slightly lower this year, declining from 76% in 2021 to 65% of respondents answering the ROI questions in 2022. While this result is lower, it is worth noting that a significant number of new projects were included in the analysis this year, impacting the overall response rate for ROI.

Overall, 70% of respondent companies indicated that CSA-financed projects generated positive reputation benefits, 76% have attempted to generate follow-on revenues, and 83% intend to generate follow-on revenues.

Previous interpretations of ROI at the CSA used the entire data set given a small sample size. Now that more data is available, a new methodology has been put in place that looks at the impact after a five-year period specifically:

The analysis is conservative in nature, as the projects for which companies did not provide responses are counted as generating an ROI of zero.

To date, these measures have shown that CSA space development programs demonstrated success in generating follow-on revenues for companies. The intent is to continue to follow CSA-funded projects that have ended, in order to determine the cumulative total ROI for each space development project.

INVENTIONS AND PATENTS (ALL ORGANIZATIONS)

In 2022, 51 organizations reported having made an invention and 21 registered a patent. Between 2021 and 2022, the number of organizations with inventions and registered patents increased by 6% (from 48 organizations in 2021) and decreased by 9% (from 23 organizations in 2021), respectively. Between 2018 and 2022, the number of organizations with inventions increased by 19% (from 43 to 51), while the number of organizations registering patents decreased by 5% (from 22 to 21).

A total of 256 inventions and 63 registered patents were reported in 2022.

The number of inventions increased by 13%, from 226 in 2021 to 256 in 2022.

The number of registered patents decreased by 17%, from 76 in 2021 to 63 in 2022.

QUESTIONNAIRE

In order to measure the changes taking place in Canada's space sector each year, the CSA uses a questionnaire to collect baseline data. Questionnaires are sent to private sector enterprises, not-for-profit organizations, research centres and universities in Canada that engage in space activities. The questionnaire follows a census model and therefore aims to be as inclusive and exhaustive as possible.

Most organizations that responded to the 2022 questionnaire reported on a fiscal year (generally ending March 31, 2023), with the remainder reporting on a calendar year, from January 1 to December 31, 2022. As in previous years, the questionnaire had a high response rate covering 194 organizations, including all major space players.

Additionally, the CSA performs quality control measures on the survey data to ensure the accuracy of the findings.

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 publicly traded companies) and verified through consultation with company officials.

ECONOMIC TRENDS

The economic trend analysis for this report assesses the past five years (2018–2022). For information on the economic trends prior to 2018, 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.

It is important to note that there are limitations in this information, as a portion of the data is characterized as unknown and/or not available. As a result, the data presented in this report does not include the unknown/not available data and excludes broadcasting companies.

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.

CANADA'S SPACE SECTOR

The Canadian space sector is defined as organizations (private, public and academic) whose activities include the development and use of space assets and/or space data.

SPACE VALUE-CHAIN CATEGORIES

This report uses a methodology developed by the Organisation for Economic Co-operation and Development's (OECD) Space Forum, of which the CSA is a Steering Committee member, to characterize Canadian space activities on the basis of a value-chain approach. The definitions of space sector categories were updated in the 2014 edition of this report as per the value-chain approach, with findings presented on the basis of upstream and downstream segment activities. This re-categorization is intended to improve the measurement of the space sector and enable international comparisons.

Under this value-chain approach, data have been organized into categories that align with the stages of producing space goods and services: Research, Engineering and Consulting; Space Segment Manufacturing; Ground Segment Manufacturing; Satellite Operations; Products and Applications; and Services. This approach replaces the space categories used in the annual State of the Canadian Space Sector Reports from 1996 to 2013.

SECTORS OF ACTIVITY

The activities of space organizations can also be broken down, as has been done in previous reports, according to the ultimate use or purpose of the research carried out or the goods and services produced. Space sector activities can serve commercial, civil or military purposes, and refer to activities across the value chain:

• Navigation: The development and use of satellites for localization, positioning and timing services. Navigation is used for air, maritime and land transport, or the localization of individuals and vehicles. It also provides a universal referential time and location standard for a number of systems.
• Satellite Communication: The development and use of satellites to send signals to Earth for the purpose of fixed or mobile telecommunications services (voice, data, Internet, and multimedia) and broadcasting (TV and radio services, video services, Internet content).
• Earth Observation (EO): The development and use of satellites to measure and monitor Earth (including its climate, environment and people) for a number of purposes such as resource management, mineral exploration, disaster assessment, security and defence.
• Space Exploration: The development and use of crewed and uncrewed spacecraft (space stations, rovers and probes) to investigate the reaches of the universe beyond Earth's atmosphere (e.g. the Moon, other planets, asteroids). The International Space Station and astronaut-related activities are considered in this sector.
• Space Science: The various science fields that relate to space flight or any phenomena occurring in space or on other planets (e.g. astrophysics, planetary science, space-related life science).
• Other: Generic technologies or components that are not destined for use on a specific space system or for a specific space application. This could be the case for early-phase research, small off-the-shelf components used in various systems, or services based on integrated applications.

RETURN ON INVESTMENT (ROI)

ROI is defined as the ratio rate of return between net income and investment.

For the past five years the CSA has been surveying companies to determine the return on investment (ROI) from CSA space development programs. The process involved asking a series of questions related to reputation effects, intent to generate revenues, and revenues generated for each project supported by space development programs.

JOBS

Jobs impact is reported on an annual average basis and measured in terms of full-time equivalent (FTE) employment.

HIGHLY QUALIFIED PERSONNEL (HQP)

HQP is defined as space-related employees who have at least a bachelor's degree. This definition aligns with Statistics Canada's definition of HQP, enabling comparisons with other sectors of the economy.

SCIENCE, TECHNOLOGY, ENGINEERING, AND MATHEMATICS (STEM) EMPLOYEES

STEM are space-related employees involved in science, technology, engineering or mathematics activities. For the purpose of this survey, STEM employees include engineers, scientists, technicians, management, health professionals and students working in the space sector. Management employees are included in the STEM indicator because the vast majority of employees in this category are managing STEM-related activities. Similarly, students were included in this indicator, because the vast majority of students employed by space companies are directly involved in STEM activities. This approach aligns more closely with Statistics Canada's and the OECD's definitions of STEM employees.

CANADIAN SPACE AGENCY (CSA) EMPLOYEES

The report now includes data on CSA employees as members of the space sector, and will look to incorporate other government departments in the future. Data related to CSA employees have also been backdated in order to be consistent with trend analyses throughout the report.

BUSINESS EXPENDITURES ON RESEARCH AND DEVELOPMENT (BERD)

BERD measures the spending towards R&D activities in a company. The source of funds could include their own internal private investment (cash on hand; debt; private injection) or external funding sources (government funding, other).