Space Race: Getting Canada to Orbit

Space Race: Getting Canada to Orbit

Mélanie Joly (00:00:00)

In a world changing rapidly, where Canada must be building bigger and faster than ever before, we need to seize the moment. And so we need to dream big and reach the stars. So let’s seize the moment. Canada’s space sector has what the world wants and what the world needs. So together, let’s build on Canada’s future in orbit and beyond. Alors, bâtissons le Canada. Merci beaucoup. Thank you.

John Stackhouse (00:00:29)

We’ve got an exciting episode of Disruptors recorded here at SpaceBound in Gatineau, Quebec, right across the Ottawa River from Parliament Hill. I’ll be on stage in conversation with Dan Goldberg, the CEO of Telesat. And we’ll have additional conversations with two remarkable Canadian entrepreneurs, Hugh Kolias of Canada Rocket Company and Bachar Elzein of Reaction Dynamics. Stay tuned for more from Disruptors, an RBC podcast. Dan, welcome to Disruptors.

Dan Goldberg (00:00:57)

Good to see you, John. Nice to see everyone here.

John Stackhouse (00:01:00)

We’ve got a lot to cover here at SpaceBound, but I want to focus largely on the issue of launch. Give us a sense of what your vision and ambition is in the coming months and years for Leosat.

Dan Goldberg (00:01:13)

So we are making a massive investment right now. We’re investing in Canadian dollars, over $7 billion in a constellation that we call Telesat Lightspeed. It is a very advanced low-earth orbit broadband constellation, fully global. It’s an alternative to Starlink fundamentally. Our focus is less on the consumer side of the business. It’s more on defense applications, which are something that, given the way that modern warfare has evolved and given what’s happening in Ukraine what’s happening in Iran I think there’s there’s you know a massive desire around the world for there to be more alternatives for the kind of capability that Starlink has today and the kind of capability that Telesat is building and it is very much a Canadian project. Telesat’s a Canadian company, our prime contractor building all of our satellites is MDA, so all the satellites are, you know, they were conceived in Canada, they’re being built in Canada, they’ll be operated from Canada, but it’s a global constellation, and so it’s going to be transformative. We, we Canada, we Telesat will have the first advanced low-Earth orbit satellite constellation, I’d say after the Americans, Starlink got out ahead of the rest of us. But the opportunity is enormous right now. And I talked about defense, but it’s also rural broadband connectivity. It’s broadband to airplanes. It’s broadband to the maritime sector, to the energy market. It’s a huge opportunity right now. A huge economic opportunity.

John Stackhouse (00:03:08)

But we’ve just published a report at RBC Thought Leadership called Mission Critical that also underscores the importance of sovereignty. Where is the demand coming from both sectorally and geographically?

Dan Goldberg (00:03:20)

It’s a dual use infrastructure. So it’s, you know, defense applications and commercial enterprise applications. When we first conceived of it, when we first started, you know, funding it, we thought defense was going to be about 15, 1.5% of our total revenue out in the early 2030s kind of time frame. That was before the war in Ukraine. That was before the rupture that we’ve seen out there geopolitically. Now, when we look at our pipeline and the opportunities around the world, it’s almost half of the revenues out in that timeframe we expect to come from defence and sovereignty applications.

John Stackhouse (00:04:13)

Other countries, other regions, Europe in particular, want to do this as well. What’s the Canadian advantage? Why would Europeans, as an example, or Asians for that matter, turn to Canada for this instead instead of doing it themselves?

Dan Goldberg (00:04:26)

For a bunch of reasons. Well, first off, and I mentioned it, we moved first on this. We saw the opportunity, we made the investments. MDA did a good job with their technology roadmap, developing some important technologies to support these services. So we are, we’re out front, and we’re out front by a number of years for a capability that everyone wants now.

John Stackhouse (00:04:54)

A key element in all this of course is launch. As you mentioned, Lightspeed built in Canada, built by Canadians, but you’re going to have to get to orbit on American rockets certainly in the early goings. Canada has big ambitions for launch. We heard the Minister say she wants to see in fact a greater frequency of launch. What do Canadians need to come to grips with in terms of building launch capabilities that would be suitable for a global customer like, like Telesat

Dan Goldberg (00:05:25)

Yeah well you know there are a couple of things there and and right now uh there’s one company and that’s spacex that is absolutely you know won’t won’t use the word in in a legal sense but in a in a in an actual they’re dominant uh in the launch services market right now uh to their credit and to the u.s government’s credit which uh and this goes all the way back to the Obama administration where they basically shut down the shuttle program and relied on American industry private you know industry to develop the capability and and SpaceX has done a phenomenal job of that they’ve completely disrupted the launch services market and now they are the absolute dominant provider in that market and everyone kind of needs to work with SpaceX right right now to deploy the kind of constellation that we wanted to deploy. But boy, do we need more providers in that market. And so because of that, and it is a sovereign capability, the ability to access space is something that is key to a modern country’s sovereignty, just given the way economies work today, given the way wars are fought today. But it’s a hard launch, and it’s expensive, and it takes a long time to develop the capability. We at Telesat are very supportive of Canada having a domestic, indigenous capability to launch satellites into space for our sovereignty. Is that capability going to be a capability that a company like Telesat can rely upon when we’re deploying hundreds, maybe in the future, thousands of satellites when we need to do it affordably, reliably, and with a launch cadence that allows us to compete with the SpaceX’s of the world, the Amazon’s of the world, Chinese competitors that we’re facing? seen? That’s an open question in my mind. And this is an opportunity. I’m sorry. This is a capability that cries out, I think, for cooperation with our allies. We need this capability. The Europeans need this capability. Other Canadian allies in Asia, in the Middle East, need this capability. I think Canada has a lot to bring to the table, including our geography. This launch base that’s being built in Canso, Nova Scotia right now is great, but I think everyone needs to be clear-eyed about what it’s going to take and what kind of capability we really want. We want the kind of capability that is head-to-head competitive with SpaceX, Starship-like capability, a Falcon 9 capability that launches literally every other day, sometimes twice a day, one from the Cape, one from the West Coast. That’s a big ambition, and that will require massive investment, and it’ll take quite some time to develop a capability like that.

John Stackhouse (00:09:00)

What kind of investment are we looking at to develop that level of capability?

Dan Goldberg (00:09:06)

I’m more of a satellite guy than a launch guy, but I can tell you it’s billions and billions of dollars. That’s what the U.S. government did with SpaceX, funding ultimately the Falcon 9, now Starship. The amount of investment required is massive. It’s a dual use capability. It’s a capability that can support government missions, government payloads. It’s a capability that can support projects like Telesat’s undertaking right now. But here again, it is a very significant investment.

John Stackhouse (00:09:46)

I’m with Hugh Kolias of Canada Rocket Company. Hugh, what’s the biggest tech breakthrough that you’ve made so far?

Hugh Kolias (00:09:52)

Yeah, so kind of two things. One is bringing the talent that’s required to get this done. The turbo pump is the hardest part of the hardest part. It’s what gives the engine most of its power. And our team comes from ArianeGroup, who’s seen and built it.

John Stackhouse (00:10:06)

And what’s required to make that happen?

Hugh Kolias (00:10:09)

So, multiple pieces. One is infrastructure. So Canada doesn’t have national level infrastructure to make this happen. So we recently announced a $30 million engine test facility named after Jeremy Hansen in London, Ontario. Ontario had the groundbreaking about two weeks ago, and that’ll be large enough to test one meganewton size engines, which is similar to what SpaceX uses on the Falcon 9. So infrastructure is probably one of the least talked about component of building a launch vehicle, but very important. And then from a technical perspective, at 2028, we’ll have a wholly assembled engine. And then that leads us to first flight in 2032.

John Stackhouse (00:10:46)

And one of the critical things here is that SpaceX is winding down the Falcon 9 program, which has been really the shuttle to get stuff to space. Is that the void you’re trying to fill?

Hugh Kolias (00:10:58)

That’s the void we’re trying to fill. It’s the void that the whole world is trying to fill. And that’s really the Canadian opportunity is then provide that to the rest of the world. The world is losing its dependable access to space. And there’s a number of companies attempting that. A lot of them have started with smaller vehicles because that’s what they thought years ago that that would be a niche in the market that would be able to fill. But luckily for us, as we just came onto the scene effectively in January of this year, it was perfect timing because not only did we get national government signaling from the defense industrial strategy mentioning Space Launch is a key priority. The other is with SpaceX and the Falcon 9 retreating from the market. it creates a large market opportunity for us to exist without having to try to build new technologies that haven’t existed before to compete.

John Stackhouse (00:11:46)

What do you need to accomplish in the next year to stay ahead of all those others in the world who are trying to do this as well?

Hugh Kolias (00:11:53)

Yeah, I mean, the good news, especially from the European perspective, a lot of them have been focused on smaller vehicles. So it’s gonna take them a while to spin and pivot to the larger vehicles. For us, it’s really about execution. Don’t try to create net new technologies that haven’t been tried, tested, and true, continue to bring in the world’s brightest. We were two people in January of this year. We’re about 40 today. Most of those have worked at SpaceX, Rocket Lab, ArianeGroup, Blue Origin, but not just worked there for a year or two. My co-founder, as an example, was 10 years at SpaceX about 20 years ago, so during their initial reusability campaigns, which is a massive amount of experience, and that’s really across the team. So it’s that infrastructure. We need about a 500,000 square foot manufacturing facility that will have announcements in the next few months that we’re really excited about from that perspective. Capital takes about a billion dollars to bring a vehicle like this to orbit. So both from government and private sources, a key component. And then from a technical perspective in engineering, it’s continuing to beat the drum with the team that speed is the most important thing, speed to orbit, and making sure we’re just bringing in the right people who have seen and done it before.

John Stackhouse (00:13:06)

Speed, capital, talent. Thank you.

Hugh Kolias (00:13:09)

Thank you.

John Stackhouse (00:13:12)

As a user, I’m sensing you need something that has high frequency, that operates daily. It’s like those of us who fly. We want to be on an airline that gives us options of multiple flights a day because our schedules may change. But with that optionality also probably comes better pricing and better connections.

Dan Goldberg (00:13:29)

The reality of our situation at Telesat is that we operate in a, you know, massively competitive global market, including here in Canada. So for us to be competitive, all of our cost inputs need to be world class competitive and launch for us. I mentioned, you know, a shift to U.S. dollars. Our program in U.S. dollars is a little bit more than five billion dollars to launch 225 satellites. satellites, launch is, you know, probably around 20 plus percent of that. And that’s everything. That’s not just our CapEx. That’s all of our OpEx as well. And so you can imagine how sensitive our business case is to procuring everything we need, including launch services. For us, you know, it’s a pretty simple decision. There are three factors. Reliability, cost, and then, yes, frequency. You can have an affordable rocket that’s highly reliable, but if it only launches a couple of times a year, it’s not going to get us to where we need to go.

John Stackhouse (00:14:38)

I’m with Bachar Elzein of Reaction Dynamics. Bachar, you make rockets. What is the hardest part of making a rocket?

Bachar Elzein (00:14:46)

Okay, so it is a very good question and it depends when you ask that question if it’s at the beginning of development or a bit later. I would say it is really what you cannot control. You can control your testing, you can control to a certain extent how your engine will behave, how your tanks can be manufactured and developed. It is really the stuff you cannot control, which is how regulations will affect your flight safety and how you can really mitigate that and address that where you’re going to launch from. We have great partners here in Canada where we can work with such as MLS and such. So it’s really the hardest part in my opinion is what you cannot necessarily control. We have been working on engines and propulsion related stuff for the past 10 years. So there’s really very few things that are, I mean you always learn rocket engines have a mind of their own if you want. But yeah, it’s really the stuff that it is the unknowns unknowns.

John Stackhouse (00:15:37)

The unknowns unknowns. Reaction Dynamics. What are the known unknowns for you? What are you trying to break through?

Bachar Elzein (00:15:44)

So we are developing a containerized rocket system with orbital launch capabilities, focusing on light lift and now medium lift as well. We have that ability to launch from remote areas given the storable nature of the propellants. So we focus on storable propellants, which means we don’t have to deal with cryogenics. We’re able to deliver really high performance, but also a very low price per kilo, which is what customers care about a lot. Our goal is to be able to offer our customers flexibility. We sell convenience and flexibility. So offer them the convenience of a dedicated launch at a price point not too different from what they’re used to pay with SpaceX and other companies. We believe that the biggest driver for cost reduction is really reduction of complexity. If you’re able to reduce complexity in the system, rocket engines tend to be complex, rockets tend to be complex. If you’re able to to reduce complexity by focusing on storable propellants, you’re reducing your costs on testing, launching, manufacturing, designing. So if every one of these operations are able to reduce 20%, 30%, that will compound. And at the end of the day, you’re able to offer your customer something where they’re not too suit, like a very high level of flexibility, convenience, but at a price point that doesn’t break the bank.

John Stackhouse (00:17:02)

Apart from less complexity, how are your rockets going to be different from what’s out there now?

Bachar Elzein (00:17:07)

Having the ability to be forward deployed, having a rocket that can be stored, stockpiled, that can be scaled is something that is really key. Our goal is to deliver a first orbital launch capability for the country by Q4 2028 and scale to medium lift by 2031. We want to offer our customers a level of responsiveness that is unmatched and we are looking forward to see how they will use that convenience to change our operations and change how they do business.

John Stackhouse (00:17:42)

So going to orbit within 24 months, what do you need to do to achieve that?

Bachar Elzein (00:17:47)

Right now, in fact, we are focusing on the fund raise. So we’ve had a lot of interest from different investors. We’ve also had a great deal of support from government entities. Reaction Dynamics has raised $50 million since the company’s inception. So we’re now looking to close a subsequent round. But beyond that, it’s hiring. We have made some exceptional hires in the past few weeks, including our new VP of Engineering, who used to be at Rocket Lab. In fact, he was one of the lead engineers at Rocket Lab developing the Electron rocket. He joined Rocket Lab in early 2015 when, you know, pretty much at the same level of maturity as we are now. and our goal is to really push within the next 24 months to have that first orbital launch.

John Stackhouse (00:18:29)

Bachar, thank you for being on Disruptors.

Bachar Elzein (00:18:31)

Thank you, John.

John Stackhouse (00:18:32)

One last question, Dan. If we’re here at SpaceBound a year from now, what would you hope to be able to say and what would need to be true for you to be able to say that?

Dan Goldberg (00:18:44)

Well, I hope to be able to say that we’ve got lots and lots of satellites in orbit. We’d love to see a visionary space strategy announced, implemented, and additional procurements from the Government of Canada and our allies announced. And to see a great rising tide that is lifting all of Canadian industry that has so much to offer the world. I hope that and not only do I hope that we’ll see that a year from now My expectation is that we will and that’ll be a great thing for everyone in this room And it’ll be a great thing for Canada and the world.

John Stackhouse (00:19:31)

What a great ambition, and a realistic one. A stretch, but a realistic one, Dan. Thank you for being at SpaceBound and also for being on Disruptors.

Dan Goldberg (00:19:40)

Thank you, John. Thank you all. Thank you.

Alanna Whitten (00:19:40)

Disruptors, an RBC podcast, is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product, or service. Information presented is believed to be factual and up to date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. For cautionary statements relating to the information in this podcast, refer to the legal disclaimers on rbc.com/disruptors. For more Disruptors content, like or subscribe wherever you get your podcasts and visit our webpage at rbc.com/thoughtleadership.