Evaluation of the European Space Agency Contribution Program of the Canadian Space Agency

2.2.1.1 The Cooperation Agreement between ESA and Canada

The current agreement between Canada and ESA was approved by the ESA Council in March 2010 and by the federal government in November 2010; it was signed in Paris on December 15th, 2010; and it was fully ratified on March 28th, 2012, which is the date it entered into force. As a result, the agreement covers the period between March 28th, 2012 and December 31st, 2019 (Canada & ESA, 2010, sec. XIV; CSA, 2015a).^{Footnote 1}

The agreement essentially sets the stage for the participation of Canada, and of the Canadian space sector, in the activities and affairs of ESA. As such, it contains few details, but rather establishes the driving principles through which the cooperation between Canada and ESA are to operate. For the purpose of this evaluation, the following provisions of the agreement are particularly relevant:

• General budget: ESA's general budget expenditures support mandatory activities and programmes, such as studies on future projects, the Technological Research Programme (TRP), technical investment, information systems and training activities^{Footnote 2}, as well as other internal costs. Canada contributes to ESA's general budget, but cannot participate in the TRP. The level of contribution to ESA's general budget that is expected from each ESA member is scaled on the basis of the average national income of each member state. Since Canada is a cooperating state and does not participate in the TRP, its contribution rate to ESA's General Budget is set at half of what it would be if Canada was a full member state, and excludes the TRP.
• Optional Programmes: As part of its mandate, ESA implements a range of optional programmes in the fields of satellite communications, Earth observation, navigation, technology development, human spaceflight, microgravity and exploration, launchers, and space situational awareness. Canada may opt to participate in any one of these programmes, subject to the unanimous approval of all member states participating in each selected programme.
• Industrial return: In return for its contribution, Canada can expect an "industrial return", meaning that ESA commits itself to contracting Canadian entities (mostly industry, but could include universities or federal departments and agencies) as part of the development or operations of its missions and activities. For the Canadian contribution to its General Budget, ESA's goal is to provide a "fair industrial return". As for Canada's contribution to optional programmes, ESA's goal is to provide a level of industrial return that is set for each of these programmes, and applicable to all participating states.
• Affairs of ESA: In addition to the industrial return, Canada's contribution allows designated delegates from Canada to participate in the meetings of the ESA Council, the Programme Boards involved with each optional programme (as applicable to Canada), and all other committees and bodies as applicable. During those meetings, Canada has a right to vote on items related to optional programs in which it participates. Canada also has access to some reports and documentation pertaining to the programmes in which it is involved, in addition to studies conducted as part of ESA's general budget.
• Bilateral projects: In addition to the mandatory activities and optional programmes, ESA and Canada (or the CSA directly) may sign arrangements for bilateral projects, or for the exchange of personnel, but those are implemented outside of the Cooperation Agreement.

As illustrated in Figure 2, two other types of documents support the implementation of the cooperation agreement. The details related to the range of missions and activities undertaken under each optional programme are contained in Declarations, which are adopted and regularly revised by the ESA Council. These declarations describe each sub-component of the programme, the anticipated timeframe for their implementation, and the financial contribution expected from each participating state. On that basis, ESA and Canada sign, for each optional programme, an Arrangement, which is a brief document confirming the terms of Canada's participation, and referring to other program documents such as the program declaration. Arrangements are treaty-level documents that are legally binding under public international law.

2.2.1.2 The ESA-CP

Consistent with the purpose of the cooperation agreement, and as established in its Terms and Conditions, the ESA-CP pursues the following objectives:

• Foster innovation and competitiveness by exposing Canadian space organisations to ESA's programmes and activities dedicated to developing space technologies, applications and hardware;
• Maintain or increase the capability of the domestic space sector to successfully contribute to Canadian space endeavours by providing access to ESA's space flight opportunities in order to demonstrate and qualify Canadian space technologies and hardware;
• Facilitate access to European public space markets as well as global space public and private markets, when applicable; and
• Acquire and maintain awareness of the directions of European space policies and of the European space technological, scientific, programmatic and commercial environments to feed the CSA's strategic planning process.

In addition, Canadian participation in ESA programmes may:

• Facilitate the participation of Canadian scientists to ESA missions; and
• Facilitate access to ESA's data and/or infrastructures meeting the needs of academia and government departments /agencies.

The ESA-CP pursues these objectives by supporting the implementation of the cooperation agreement, through financial contributions towards ESA's general budget and the optional programmes, in addition to participating in the affairs of ESA in accordance with the cooperation agreements, the declarations, and the arrangements specific to each optional programme.

Distribution of roles and responsibilities

As previously noted, ESA is responsible for delivering the activities funded through the ESA-CP in which Canada participates. As a result, it also determines the range, the format, and the frequency of reporting activities, which do not always align with the standard approach used by the CSA. For instance, the fiscal year of ESA is aligned with calendar year, instead of the April 1st to March 31st cycle used within the federal government. To the extent possible, the data was reconciled, or the difference is directly noted. Overall, this limitation has not had a significant impact on the extent to which performance information from ESA could be used to assess the ESA-CP.

Reporting requirements

Since Canadian entities (predominantly the Canadian space industry) that are engaged in carrying-out ESA requirements typically act as sub-contractors of larger prime companies, there is limited information available on the actual work they undertake, as ESA deals directly with the prime contractor, not the Canadian company (or other entities as applicable). As a result, interviewees from the CSA and ESA could only provide limited insights on the detailed impact of these contracts on Canadian entities. Only interviews conducted directly with Canadian companies (or other entities as applicable) could provide these insights.

Performance measurement strategy development

The ESA-CP performance measurement strategy was developed and approved in 2016. Consequently, the data collected at the time of the evaluation addressed only some of the performance indicators. In addition, the CSA was in the process of implementing the new reporting structure established by the Policy on Results (Government of Canada, 2016b), particularly through the required Performance Information Profiles, which provide a new structure for gathering and reporting performance information. As a result, the evaluation gathered all available administrative data, including data provided by ESA, and proceeded with the required analysis to be included in this report.

4.1.1.1 The perceived value of the partnership

With a history that now goes back almost 40 years, the ESA-CP has become a well-established component of Canada's space program. As noted in introduction, it emerged as a policy and programming option to support a greater level of diversification in space partnerships and to secure a much needed foreign market for Canada's space industry. Both the 2010 and 2015 evaluations of the ESA-CP concluded that the program's rationale was still holding true (CSA, 2010, 2015a). Among the key drivers noted in these two evaluations are the following:

• The broad nature and scope of missions and activities undertaken by ESA offer opportunities for the Canadian space sector to advance its expertise and technology (including flight test and space qualifying activities for emerging R&D components) in a scale that could not be achieved solely through the missions and activities undertaken by the CSA;
• While the US remains an important partner for Canada, its approach to mission development, along with the regulatory framework in place, particularly the International Traffic in Arms Regulations (ITAR), limit the range of projects in which NASA can collaborate with the Canadian space sector.
• The Canadian space industry has particular niches of expertise (e.g., satellite communications and robotics) in which it is sufficiently competitive to successfully participate in contracted projects put forward by ESA, making the ESA-CP a meaningful option for the Canadian space industry.
• Since the space sector tends to be protectionist, and considering the industrial policy in place at ESA (contracts given to participating members), it is unlikely that the Canadian space sector could engage to any meaningful extent in projects undertaken by ESA in the absence of the cooperation agreement and the ESA-CP.
• Canada's participation in ESA programmes provide opportunities for Canadian scientists (from both government and academia) to participate in significant scientific projects, have privileged access to the resulting data, and forge new collaborations with European scientists.

These views were equally shared by stakeholders consulted as part of this evaluation. In particular, the Canadian space industry remains confident that it can provide a range of expertise that European prime contractors value and require to carry-out the large-scale projects managed by ESA. The Canadian scientists perceive their participation in ESA projects very favourably, including the range of collaborations it facilitates in technology development and scientific projects. Finally, ESA representatives perceive Canada as a longstanding and important partner of Europe, bringing a unique perspective based on Canada's proven track records in key technology development areas and its experience with other space agencies, notably NASA. As one ESA representative put it: "Canada brings in a top class industry, and a different sort of perspective on the way to do things, which is not European, and is refreshing with respect to some of our established approaches".

4.1.1.2 The current driving forces

The European space market

As noted in introduction, the Canadian space sector's growth and sustainability requires access to foreign markets. While the US market remains dominant in that regard, Europe occupies a critical position, as evidenced by the fact that close to a quarter of the $2 billion generated in 2016 in export revenues (representing $470 million), was generated from the European market (see Figure 4).

Another important dimension is the fact that the Canadian space sector remains fairly contained, as 97% of the revenues it generates comes from the top 30 space organizations in the country, predominantly private industry (CSA, 2018, p. 18). Moreover, the vast majority (90%) of export revenues for the Canadian space industry comes from sales to non-government customers, and relate primarily to manufacturing, satellite operations, as well as products and applications (CSA, 2018, p. 30). In a market that was valued at $384 billion (US dollars) worldwide in 2017 (Space Foundation, 2018), the Canadian space industry must therefore position itself strategically, based on its competitive strengths.

One common scenario when it comes to foreign markets, particularly in the space manufacturing sector, is for the Canadian space industry to act as sub-contractors, providing components for foreign prime companies, as opposed to complete end-to-end systems (CSA, 2018, p. 30). The fact that the European space manufacturing sector generated €8.8 B (approximately $13.3 billion) in sales in 2017, which does not include other lucrative segments such as satellite communications-based services, provides further illustration of the strategic importance of the European market for Canada. And the fact that €3.5 billion of these sales came from ESA, by far the most important institutional client of the European space manufacturing industry (ASD-Eurospace, 2018), leaves little doubt as to the advantage given to industries from ESA member countries in accessing this market.

The European Union, ESA, and Canada

Among the many dynamics that have shaped the European space market is the evolving and complex relationship between ESA and the European Union, which has consistently raised questions as to its potential impact, positive or negative, on Canada's involvement with ESA, and with space activities in Europe more generally. Among the many complicating factors relevant to this evaluation is the fact the ESA and the European Union have different memberships (including many nations that belong to both), and perhaps more importantly, they operate with completely different procurement policies and procedures. Both the 2010 and 2015 evaluations of the ESA-CP raised questions on the potential impact that this evolving relationship may have on the Canadian space sector.

At this point, Canada is actively engaged as a participating state in ESA, and is also actively engaged with the European Union, particularly through the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), whose scope far exceeds space, but does include it nonetheless. CETA was officially signed in October 2016, and provisionally applies^{Footnote 4} since September 2017 (Global Affairs Canada, 2017a), which falls within the period covered by this evaluation. What is known about CETA and its application to space is the following:

• Since ESA is an international organization that is not technically included in the European Union, none of its procurement practices are affected by the application of CETA.
• The procurement policies of a number of federal departments and agencies, including the CSA, must now align with the requirements of the trade agreement. In the specific case of the CSA, it must first be noted that any procurement activities associated with goods and services valued at less than approximately $220,000^{Footnote 5}
• are excluded from the requirements of CETA. As for activities valued at more than $220,000, "the procurement of covered goods and services is limited to those related to satellite communications, earth observation and global navigation satellite systems. This commitment is in effect for a five-year period following the entry into force of this Agreement" (Global Affairs Canada, 2017a, secs. 19-A).
• Defence-related and R&D procurement activities, in both Canada and the European Union, are not covered by the requirements of CETA (Global Affairs Canada, 2017b).

What remains less clear is the extent to which the Canadian space industry is currently in a position to bid on eligible procurement activities undertaken by the European Union, and national space agencies in Europe, particularly the larger agencies such as those in France, Germany, and Italy. None of these space agencies are in the list of public European authorities included in the CETA agreement (Global Affairs Canada, 2017a, secs. 19-B). For instance, in the specific case of France, the Académie des technologies, the Agence de biomédecine, and the Centre national de la recherche scientifique are among the entities covered by CETA, but not the Centre national d'études spatiales (CNES), which is France's space agency. During interviews conducted as part of this evaluation, stakeholders agreed that the precise scope of CETA, particularly when it comes to its application to European space agencies (other than ESA) has yet to be clarified. Since the goal of the ESA-CP is to ultimately position favourably the Canadian space industry in international markets beyond ESA, this is an important consideration that will require close monitoring as all concerned parties gain experience under the trade agreement.

4.1.1.3 Is the ESA-CP still needed?

In light of the long history of collaboration between the CSA and ESA, it appears appropriate to somewhat reverse the question of whether the ESA-CP is still needed, by considering whether there is a strong rationale to end it. And the answer that emerged from this evaluation is that there is no such rationale. In fact, evaluation findings indicate that the greater integration of activities between ESA and the European Union, as well as the greater integration of economic activities between the European Union and Canada provide a strong rationale for maintaining an active participation of Canada in ESA.

Ending the ESA-CP program would first exclude the Canadian space sector from participating, in any meaningful way, in the missions and activities of ESA. This is particularly important when considering the stated goal of ESA to "continue to be THE Space Agency of its Member States and for the European Union" (ESA, 2018e). Along the same lines, the ability of the Canadian space sector to benefit from the potential opportunities provided by CETA could arguably be negatively affected if Canada is no longer actively involved in discussions and projects involving European space partners sitting around the ESA table.

In sum, the initial drivers behind Canada's participation in ESA that were documented in the previous ESA-CP evaluations remain valid, and the vision of the European space sector that has emerged during the period covered by this evaluation both confirm the need for the ESA-CP.

4.2.1.1 Key considerations

The data presented in this sub-section is largely based on reports provided by ESA to its member states. There are a number of differences in the way in which ESA and CSA monitor and report on their activities. For the purpose of this evaluation, the following considerations appear particularly relevant:

• Fiscal year: ESA's fiscal year is aligned with the calendar year, and reports are provided to member state on a quarterly and annual basis.
• Reporting period: To monitor the industrial return achieved by each member state, ESA establishes statistical periods. At the time of the evaluation, the applicable statistical period was from January 1st, 2015 to December 31st, 2024. The previous one was from January 1st 2000 to December 31st, 2014. As a result, some of the statistics presented in this sub-section do not align perfectly with the period covered by the evaluation. In most cases, the data available covered the period from January 1st, 2015 to March 31st, 2018. Appropriate references are included to confirm the period covered.
• Weighted value: ESA uses both weighted and un-weighted numbers when reporting on the value of contracts signed with the space sector of each member state, as applicable. The weighted numbers are adjusted using a technological weighting factor. Put simply, when contracts relate entirely to space technologies, the weighted ratio is 1.00 (no adjustment), but if a contract includes activities that are not related to space technology (e.g., general maintenance of an ESA facility), the weighting factor is adjusted accordingly (a contract of €1 million that would include only €500,000 in space technology would be weighted at a ratio of 0.50). The weighted value is typically more relevant under mandatory activities, since optional programmes tend to focus on the development of space technologies.

• Return coefficient: As already noted, ESA' goal is to ensure that each member state receives a "fair return", through contracts given to its space sector, for the contribution it makes to the ESA budget. This is reported using a return coefficient, which is "the ratio between the share of a country in the weighted value of contracts, and its share in the contribution paid to the Agency" (ESA, 2018b). Keeping in mind that the ideal ratio is 1.00^{Footnote 6}, ESA establishes lower limits for the cumulative return coefficient (grouping contracts for all mandatory and optional programmes and activities) to be achieved by each member state. For the current period (2015 to 2024), those lower limits are:

  • 0.91 by December 31st, 2019
  • 0.93 by December 31st, 2022
  • 0.95 by December 31st, 2024

  If a member state does not achieve this minimal level of return coefficient by the end of the statistical period (2024 in this case), ESA is expected to take specific measures to facilitate the achievement of this return level. Along the same line, if a member country exceeds 1.00 by the end of the period, the member country may have to augment its contribution to bring the coefficient back to 1.00.

4.2.1.2 Overview of contracts allocated during the current ESA reporting period^{Footnote 7}

Keeping these considerations in mind, ESA allocated a total of €16.2 billion (€13 billion weighted) in contracts to the space sector of its member states over the period from January 1st, 2015 to March 31st, 2018. As illustrated in Figure 5, the largest portion in value of these contracts (35%) was in support of optional programmes falling under the domain of European launchers, considered an ESA priority during this period (ESA, 2018a). The domains of Earth observation and telecommunications, which have historically been particularly relevant to Canada, represented 25% of the total sum contracted out, whereas mandatory programmes and activities represented 13% of that sum.

During the same period (not the entire evaluation period), the Canadian space sector received €52.4 million (approximately $79.5 million) in contracts for activities related to ESA mandatory and optional programmes.^{Footnote 8} Figure 6 presents the distribution of these contracts by key domains of ESA programming.

A few considerations must be kept in mind when assessing these numbers:

• The Canadian space sector receives approximately 0.4% in value of all contracts provided by ESA to its member states. Consequently, even if ESA invests large sums in programmes in which the Canadian space sector is not particularly involved, such as launchers, it leaves significant contractual activities in all other areas targeted by the Canadian space sector. For instance, telecommunications was one of the domains in which ESA invested the least during the period reported in this evaluation and yet, €1.3 billion was contracted in telecommunications projects, including €15 million to the Canadian space industry (which represented 1.2% of the total amount contracted in this domain).
• Each period presents unique characteristics. For instance, the value in contracts to Canada for microgravity and human spaceflight represented 29% of the total amount directed to Canada, which is a higher portion than what would typically be seen in previous periods. In comparison, during the period reported in the previous evaluation of the ESA-CP (2009 to 2013), this domain represented 16% of all contracts provided to Canada. The same could be said of contracts related to mandatory programmes and activities. During the period reported in this evaluation, it represented 13% of the total value of contracts given to Canada. During the period reported in the previous evaluation, it stood at 30%, a much higher proportion that largely resulted from large contracts awarded to SED for the third deep space antenna.
• The amounts reported are the commitments made by ESA, meaning the total value of the contracts signed with the space industry. These contract are typically implemented over a fairly extended period of time, and the actual expenditures incurred by ESA, and thus the revenues received by the space sector, will equally span over a certain period of time. Put simply, the amounts reported do not represent what has been paid to the space sector, but rather what has been contracted.
• The contracts that have yet to be assigned relate to various optional programmes (ESA, 2018c, p. 10).

4.2.1.3 ESA contracts directed to the Canadian space sector during the evaluation period

Considering specifically the entire period covered by this evaluation, namely April 1st, 2013 to March 31st, 2018, the Canadian space sector signed a total of 168 contracts associated to ESA projects, worth €75.8 million unweighted (approximately $115 million). Table 3 provides a breakdown of these contracts by ESA programming domains.

Source: ESA administrative data

The list of the largest projects in which the Canadian space sector was involved includes the ExoMars mission (€14.6 million) and the MetOp Second Generation mission (€4.5 million).

The average size of contracts was €519,582, and the vast majority of contracts were valued at €500,000 or less (see Figure 7).^{Footnote 9}

In terms of distribution over time, Figure 8 indicates that the Canadian space sector has received between €13 million and €18 million worth of contracts from ESA during each of the five fiscal years. This means, on average, approximately $23 million in ESA contracts provided to the Canadian space sector annually.

The data also confirms that the space industry is, as intended, the main segment of the Canadian space sector involved in ESA contracts. As illustrated in Figure 9, Canadian space industries received 92% of the total value of ESA contracts and while 41 companies were involved in these contracts, the various divisions of MDA (Maxar) were by far the predominant driver, receiving a total of €36 million over the five year period. MDA's involvement in the ExoMars mission accounted for approximately half of this amount (€18.5 million). In addition, 15 Canadian universities received funding from ESA to participate in its activities (for a total of €5 million), as well as two federal departments: Environment and Climate Change Canada and the National Research Council (for a total of €1 million).

4.2.1.4 Geo-return achieved by Canada

As previously noted, the ideal overall industrial return to be achieved by all ESA member states by the end of the applicable reporting period (2024) is 1.00. In progressing towards this goal, ESA expects all member states to achieve, at a minimum, an overall industrial return of 0.91 by December 31st, 2019. As indicated in Table 4, Canada is well positioned to achieve this interim goal, as its overall return coefficient stood at 1.06 as of March 31st, 2018.

Source: ESA administrative data (ESA, 2018c)

In fact, and as illustrated in Figure 10, Canada is among the ESA member states that are achieving the highest return coefficient, well above the 0.91.

Source: ESA administrative data

Canada has traditionally been in a position to achieve the targeted return coefficient rates. Looking back at the previous reporting period (2000 to 2014), Canada had reached an overall return coefficient of 1.09 by the end of 2008 (CSA, 2010, p. 49), before landing at 0.99 by the end of 2014 (CSA, 2015, p. 33).

The mandatory programmes and activities is the one domain where Canada has faced some challenges in achieving a fair return. As noted by key informants during interviews, Canada's geographic location excludes Canadian contractors from a number of potential activities that would typically be covered under the mandatory activities (provision of certain goods and services, maintenance of facilities, etc.). However, measures have been taken over time to ensure that Canada can achieve a fair return for its contribution to the general budget of ESA. The most significant one, initiated back in 2000, was the allocation of ESA contracts to the Canadian industry to participate in the Deep Space antenna project. In fact, and as noted in the 2015 evaluation of the ESA-CP, the participation of Canada in this project lead to an over-return coefficient, which was corrected through an additional contribution by the CSA to ESA (CSA, 2015, p. 33).

4.2.2.1 The consistent performance of the ESA-CP

As illustrated through its logic model (see Figure 3 on page 9), the following benefits are anticipated to derive from Canada's participation in ESA through the ESA-CP:

• The CSA and other federal departments will use the information gathered through Canada's participation in the various boards and committees of ESA to inform their decision-making processes and policy development. By having a detailed understanding of the range of programmes implemented by ESA and its member states, the CSA and other federal departments and agencies that use space-based solutions would be in a position to plan their activities in light of this strategic information.
• The Canadian space sector will actively participate in ESA missions and activities, which in turn, will increase the number of alliances formed (both commercially and scientifically); enhance the technological capabilities of the Canadian space sector; and provide access to ESA data and infrastructures.
• Overtime, the Canadian space sector will enhance its competitiveness in European and other foreign market, which will also enhance its capacity to meet the requirements associated with the missions and activities undertaken by the CSA and other departments and agencies involved in space activities.

The 2010 and 2015 evaluations

Both the 2010 and the 2015 evaluations of the ESA-CP concluded that the ESA-CP has contributed to the achievement of these results (CSA, 2010, 2015). The following key findings emerged from these two evaluations:

• Procurement achievements: The strong return coefficients achieved by Canada demonstrate that the Canadian space sector is in a position to successfully operate within the procurement policy of ESA. The Canadian space industry has effectively engaged with European prime contractors or directly led projects.
• Strategic information and data: As summarized in the 2015 evaluation of the ESA-CP, "there was near consensus among CSA and OGD representatives interviewed that Canada's participation in ESA Programme Boards and horizontal committees provides the CSA and OGD with invaluable information and intelligence" that support their decision-making processes (CSA, 2015, p. 35). Canadian scientists also benefit from the privileged access to data and information that derives from their participation in ESA's missions. These scientists include both academics and government scientists, who use the data from ESA missions for fundamental research or operational needs (weather forecast, monitoring activities, etc.).
• Commercialization of new technologies: Canadian companies participating in ESA missions are given the opportunity to advance their technologies (higher Technology Readiness Levels (TRL) achieved), and to space qualify them as applicable, which strengthens their capacity to commercialize them, particularly in the areas of telecommunications and Earth observation. This participation also leads to alliances between Canadian and European companies that allow for further collaborations on projects beyond the ESA realm.
• Economic benefits: Using an input-output model to assess the economic benefits resulting from ESA contracts given to Canadian companies, the 2015 evaluation concluded that the $114.2 million in ESA contracts given between 2009 and 2013 yielded total direct, indirect and induced economic benefits of $447.9 million in GDP and 4,582 person years of employment (CSA, 2015, p. 53).^{Footnote 10}

In terms of challenges, both evaluations noted that the level of funding provided by Canada in optional programmes was limiting the capacity of some companies to engage in a larger number of ESA missions and activities. In other words, some companies were unable to compete for some opportunities as a result of the fact that the Canadian funding in the applicable optional programmes was already committed. This was particularly emphasized during the period covered by the 2015 evaluation, as the CSA had first reduced its funding to the ESA-CP in 2012 (in the area of telecommunications), before increasing it in 2015, which made it more challenging for the industry to adjust to these fluctuations.

The 2013 – 2018 period

The trends that emerged from this evaluation are largely consistent with these findings, which illustrates the fact that the ESA-CP is a mature program that does contribute to the achievement of its intended outcomes. During the 2013 – 2018 period, the Canadian space sector continued to be actively engaged in ESA missions and activities, as illustrated by the strong industrial return coefficient achieved. Scientists from both academia and government have also served on ESA scientific committees and used the resulting information and data to support their research activities. The opportunities provided by ESA have advanced Canadian technologies and led to other commercial endeavours beyond ESA. Also, Canadian representatives on ESA boards and committees have gathered strategic intelligence regarding not only ESA, but also each of its member states, which is serving well the planning activities of ESA, and of the other segments of the Canadian space sector.

The issue of the funding level for the ESA-CP was also raised by key stakeholders during this evaluation. Findings confirm that, indeed, the capacity of the Canadian space sector to engage in some of the activity areas of ESA is arguably exceeding the contribution level provided by Canada to the associated optional programmes. This, in itself, speaks to the strength of the Canadian space sector in key areas of space technologies. However, the logic of the ESA-CP has never been to support all potential projects from ESA in which the Canadian space sector could potentially engage in. It is rather to provide opportunities for such a participation to occur, with the goal of strengthening the positioning of the Canadian space sector to engage in foreign markets generally, in addition to better supporting CSA missions and activities by applying the technologies developed as part of these ESA programmes. As of 2017-2018, the CSA was investing 12.5% of all its programming resources in the ESA-CP (CSA, 2017a, p. 28, 2017b, p. 28). Whether this allocation is adequate in light of all the priorities of the CSA is a relative question that falls beyond the scope of the evaluation.

The next sub-section provides more details on some of the results achieved by the ESA-CP over the period covered by the evaluation, and how they relate to findings included in previous evaluations of the program.

4.2.2.2 Highlights of the period covered by the evaluation^{Footnote 11}

The following examples are intended to provide practical illustrations of the results achieved by the ESA-CP, but they are not meant to be an exhaustive list of all results achieved.

Consultations held with the Canadian space sector

The ESA Council at the Ministerial Level normally meets every three years to set the strategy and policies of ESA in light of emerging needs and opportunities. The last such meeting was held in December 2016. As these meetings provide an opportunity for all ESA members to announce new or renewed financial contributions, the CSA holds consultations with members of the Canadian space sector, particularly industry, prior to the meeting, to better position Canada's investment. Evaluation findings indicate that, in preparation for the 2016 meeting, the CSA successfully expanded the range of stakeholders consulted. Canadian stakeholders interviewed as part of this evaluation indicated that they were very satisfied with this process, they saw it as an improvement over previous consultations, and were of the opinion that it provided meaningful exchanges prior to the ESA Council at the Ministerial Level. This sets a strong precedent that could inform the consultations to be held in preparation for the 2019 ESA Council at the Ministerial Level.

Procurement process at ESA

The 2010 evaluation of the ESA-CP indicated that the complexities of the ESA procurement processes and systems constituted a challenge for some members of the Canadian space industry (CSA, 2010, p. 46). Findings gathered as part of this evaluation indicate that this situation has since improved. First, stakeholders consulted indicated that CSA representatives make themselves available to provide information to those companies interested in the ESA market, or to scientists interested in ESA missions. In some cases, CSA representatives at ESA committees share periodic updates on relevant ESA activities. In addition, ESA's Electronic Mail Invitation to Tender System (EMITS) allows interested stakeholders to automatically receive notification of upcoming contracting opportunities. As summarized by one key informant from the Canadian space sector, there are now plenty of opportunities for those interested in ESA activities to remain adequately informed, but this also requires discipline and commitment on the part of these interested stakeholders to make ESA activities an actual priority.

International positioning of the Canadian space sector

The experience gained by the Canadian space industry through its participation in ESA projects has continued to enhance its capacity to engage in other ESA projects, as well as in foreign markets. As one may expect, some projects, by their very nature, will more logically lend themselves to follow-up commercial opportunities, such as new technologies designed in the area of telecommunications. Commercial follow-ups will tend to be more indirect in other areas, such as space exploration and, to some extent, Earth observations.

The extent to which commercial opportunities derived from ESA opportunities can be documented largely relies on the willingness of Canadian companies to share this information. Since these companies do not report to the CSA, but rather to ESA and, in most cases, only indirectly to ESA since they act as sub-contractors, there is no systematic process to document these outcomes. Proprietary considerations further limit the extent to which companies are willing to share what is often considered competitive intelligence.

Keeping this in mind, the following illustrations of results achieved emerged from the current evaluation:

• Telecommunications: One of the high profile success stories to emerge during the evaluation period is the involvement of MDA in the OneWeb Satellites project, whose prime contractor is Airbus. With the support of the ESA-CP, MDA developed new technologies to mass produce communication antenna subsystems. Following the successful demonstration of this technology, OneWeb has signed a contract with MDA for the development and manufacturing of 3,600 of these subsystems, to be integrated in the first 900 satellites of the OneWeb Low Earth Orbit (LEO) constellation (MDA, 2016). Stakeholders expect this technology to find applications in other projects, including possibly the LEO project led by Telesat (SpaceNews, 2018).
• Space explorations: A number of ESA projects in the field of space exploration have allowed Canadian space companies to develop, test and demonstrate new technologies. The participation of MDA in the ExoMars rover 2020 project is allowing the company to build on previous experience gained in robotics to position itself for future missions, particularly as Mars is gaining greater attention from space agencies around the world. In addition, the involvement of CALM Technologies in the Osteo mission has allowed the company to successfully demonstrate technologies that can find further applications in medical fields related to osteology. Finally, the extended involvement of SED (Calian) in the ESA Deep Space Antenna project has allowed for the demonstration of technologies that can find applications in future deep space missions.
• Earth observation: The successful involvement of COM DEV in ESA's Swarm mission, exploring the Earth's magnetic fields, has led to other commercial opportunities, including a commercial contract with the Japan Aerospace Exploration Agency (JAXA) for a Cloud Profiling Instrument. Communications & Power Industries (CPI)'s involvement in the ESA's MetOp mission provided an illustration of potential follow-up activities within ESA itself. Since Canada does not participate in the MetOp optional programme of ESA, the ESA-CP did not provide financial support for the participation of CPI in this project. Rather, the unique expertise of CPI was determined to be required and, as a result, the company was directly contracted by the prime contractor (Airbus).

In addition, stakeholders from the Canadian space industry who were consulted provided broader insights on the impact of their involvement in ESA projects. The following extracts^{Footnote 12} from interviews conducted with industry illustrate the type of experience gained through the ESA-CP:

• "One of the things that we find important is networking. ESA forces us to partner on projects. If you are going to win a tender, you have to partner with companies from other countries. It forces you to be at some of the ESA forums where you meet and greet other companies, and it forces you to work together. What that allows us to do is to be more competitive on industrial contracts. We can be more competitive because we have networked with other companies through our ESA contracts."
• "First we have the background technology and secondly we have the relationships. Even more so than having the relationship we have the confidence of the European primes. Our performance has given them confidence that we have both the knowledge and the capability to do other projects."
• "Europe is not necessarily the prime market for our services. However, we feel that by working with European companies, it gives us an advantage when pursuing opportunities globally. And in some cases, we've worked with these European companies that we've connected with through ESA to do work in Canada."
• "This experience has allowed us to commercialize some of the work that we have done as part of the ESA program and to go after additional commercial contracts in Europe. Those opportunities are completely due to the fact that we are able to participate in the ESA program to start with. We are then able to commercialize from there."

4.2.2.3 Scientific activities

ESA programmes and activities provide an opportunity for Canadian researchers and scientists to participate in scientific committees, and to access the data produced through these missions. However, the participation of these scientists is not directly supported by the ESA-CP. Rather, the CSA will use announcement of opportunities to financially support scientists who have been selected by ESA to participate in certain missions and activities. In addition, ESA's open-data policy provides direct access to mission data, without the need for financial support from the ESA-CP.

4.2.3.1 Ratio of contracts allocated to total program costs

Evaluation findings indicate that the ESA-CP is an efficient mechanism to engage the Canadian space sector in a range of large missions that are aligned with Canadian priorities:

• Over the five years covered by the evaluation, the CSA spent $2.7 million internally to manage the ESA-CP, which provided $158.5 million in financial contribution to ESA. These internal expenditures represented 1.7% of the amount contributed to ESA (see Table 1 on page 7 for details).
• In turn, ESA allocates a portion of the contributions made by participating member states to each optional programme to support management and other internal costs. The declaration of each optional programmes provides the details concerning these internal costs. For instance, the declaration for the Core Competitiveness Element of the ARTES program (telecommunications domain) indicates that between 80% and 85% of the contributions made by participating states is expected to be allocated to external contracts (ESA, 2017b, p. 22).
• As already noted, since Canada is achieving a strong industrial return coefficient, it can therefore expect to receive the equivalent ratio of its contribution, as established in the declaration of each optional programme. For instance, under the Core Competitiveness Element of the ARTES programme noted above, the Canadian space sector can expect to receive in contracts the equivalent of approximately 80% to 85% of Canada's contribution. Evidently, each element of each optional programme is unique in terms of resources required for internal management and the industrial return coefficient achieved by Canada. In addition, the industrial return achieved by Canada for mandatory programme and activities tends to fluctuate quite significantly over time.

The 2015 evaluation of the ESA-CP estimated that the overall ratio of total contract value to total program costs (including CSA internal costs) for the period from 2004-05 to 2013-14 was 0.71 (CSA, 2015, p. 58). Using the same calculation, the ratio for the five years covered by the evaluation remains largely the same, standing at 0.73.

When everything is considered, the Canadian space sector has received $0.73 for each dollar invested by Canada in the ESA-CP during the period covered by the evaluation, which is a strong return considering the scope, range and complexity of these ESA missions and activities, and the benefits achieved by the Canadian space sector, as documented in this evaluation.

4.2.3.2 Performance information

The evaluation provided an opportunity to review the performance data collected by the CSA, based on the data and reports provided by ESA. It found that the level of details provided by ESA on contracts given to the Canadian space sector, the frequency and consistency of reporting, and the information on contributions made by Canada under each programming domain all contribute to ensuring an effective monitoring of the ESA-CP program, in addition to being a critical data source for the evaluation of the program.

4.2.3.3 Application of Gender-Based Analysis Plus

In July 2016, the federal government released its new Policy on Results (Government of Canada, 2016b), along with its associated Directive on Results (Government of Canada, 2016a). This new framework clarifies expectations related to gender-based analysis plus (GBA+). First, it confirms that in establishing their performance measurement strategy, program managers must include, where relevant, a gender-based plus analysis. It also identifies, as a mandatory procedure, that all evaluations be planned to take into account, where relevant, GBA+ analysis. In March 2017, the CSA approved its own policy and procedures governing gender-based analysis, which is based on the concept of GBA+, as defined by the Status of Women Canada (Status of Women Canada, 2017).

As required, this evaluation was planned to consider the requirements of GBA+, and concludes that the ESA-CP does not impact diverse groups of women and men differently, and will not create barriers to equal participation for any particular identity group within the Canadian population. In particular, since the program is essentially focussed on the implementation of the ESA-Canada cooperation agreement, which constitutes an international treaty, and manages contributions involving two organizations (the CSA and ESA).