MDA Space launches 49 North

Key Concepts

• 49 North: A newly formed wholly-owned subsidiary of MDA Space, focused on Canadian national defense priorities outside of the space domain.
• Defense Industrial Strategy (DIS): A recently announced Canadian government strategy prioritizing building defense capabilities within Canada, followed by purchasing domestically, partnering internationally, and then procuring from abroad when necessary.
• Remotely Piloted Aircraft System (RPASS): Unmanned aerial vehicles being delivered to the Canadian Air Force and Royal Canadian Navy.
• Sovereignty & Security: A key driver for Canadian defense spending, particularly regarding secure communications and sensor integration.
• Arctic Communications: A significant program involving MDA Space providing satellite-based communications for military operations in the Arctic.

Expansion of MDA Space into Canadian Defense with 49 North

This discussion details MDA Space’s strategic expansion into the Canadian defense sector through the creation of its subsidiary, 49 North. The move is driven by a growing focus on national defense and a desire to capitalize on increased defense spending within Canada.

Rationale for the Spin-Off & 49 North’s Focus

Mike Grinley, CEO of MDA Space, explained the decision to create 49 North as a means to specifically address non-space defense needs. MDA Space has a 50-year history in defense, encompassing Army, Navy, Air Force, and joint communications, but the spin-off allows for dedicated focus on building Canadian systems and partnering with international entities to serve the Canadian defense market. As Grinley stated, “We wanted to be able to take the non-space aspect, put it in 49 North, create a wholly owned subsidiary…and be able to focus that in the market.”

Core Capabilities & Target Areas

49 North will concentrate on several key areas:

• Autonomous Systems: MDA Space has been a leading provider of Unmanned Aerial Vehicles (UAVs) to the Canadian Army and Air Force since the Afghanistan conflict.
• Command, Control, Communication Systems: Providing secure and integrated communication solutions.
• Intelligence, Surveillance, and Reconnaissance (ISR) Systems: Developing and deploying sensors for data gathering and analysis.
• In-Service Support: Maintaining and upgrading deployed systems.

Currently, MDA Space is delivering the Remotely Piloted Aircraft System (RPASS) to the Canadian Air Force and the Royal Canadian Navy’s unmanned vehicle program. Future growth will focus on unmanned systems, sensors (specifically for next-generation river-class destroyers), and secure communications.

Opportunities & Growth Potential

The expansion of defense spending presents significant opportunities for 49 North. Grinley highlighted the global trend of defense forces expanding their unmanned capabilities, creating a strong market for MDA Space’s expertise. Furthermore, Canada’s emphasis on increased sovereignty and security necessitates robust sensor networks and secure communication infrastructure.

MDA Space is also involved in providing satellite-based communications for Arctic operations through a strategic agreement with the Department of National Defense and Telesat Corporation – described as a “very very large program.” 49 North will complement this by providing autonomous operations, sensor types, and communication activities for northern operations across the Navy, Army, and Air Force.

The Defense Industrial Strategy & Canadian Collaboration

A pivotal moment for Canadian defense was the recent announcement of the Defense Industrial Strategy (DIS) by the Prime Minister. Grinley, who attended the announcement, described it as a “unique moment” after decades of advocating for such a strategy. The DIS prioritizes:

1. Build in Canada: Developing defense capabilities domestically.
2. Buy Canadian: Procuring systems built in Canada.
3. Partner Internationally: Collaborating with international partners.
4. Buy When Necessary: Procuring from abroad only when domestic options are unavailable.

MDA Space intends to play a leading role in fostering collaboration among Canadian companies to meet the Canadian military’s needs. Grinley emphasized the importance of Canadian industry working together, stating, “We’ll be looking as one of the the larger defense prime contractors in Canada to be able to partner with other Canadian industry.”

Talent Acquisition & Workforce Growth

MDA Space has demonstrated a strong ability to attract engineering talent, hiring over 700 people in 2022, over 850 in 2023, and over 900 in 2024. 49 North will continue this trend, expanding its workforce through 2026 and collaborating with partners to build industry consortiums.

EchoStar Deal & Legal Matters

Addressing a question regarding the EchoStar deal, Grinley stated that MDA Space is “aggressively” defending itself against a possible class action lawsuit, asserting that “everything was done properly there.”

Conclusion

MDA Space’s creation of 49 North represents a strategic move to capitalize on the growing Canadian defense market. Driven by the new Defense Industrial Strategy and a focus on sovereignty and security, 49 North is poised to become a key player in providing autonomous systems, sensors, and secure communications to the Canadian military, particularly in challenging environments like the Arctic. The company’s demonstrated ability to attract talent and foster collaboration positions it for continued growth and success within the evolving Canadian defense landscape.