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Telescope project uncertainty puts $200 million at risk

Ottawa's waffling on commitment to $1.2 billion TMT threatens to stall job growth
Dynamic Structures president David Halliday holding an unpolished mirror in front of the Kuka robot used to polish the glass surface of telescope mirrors

When Dynamic Structures Ltd. and Innovative Optics Ltd. invited James Moore to tour their newly expanded operations in Port Coquitlam September 27, it wasn't just because Moore is Canada's Industry minister and B.C.'s senior cabinet minister.

He's also the member of Parliament for Port Coquitlam, where $150 million worth of precision steel fabrication work and more than 100 jobs are on the line.

Another $40 million to $50 million contract with the Herzberg Institute of Astrophysics in Victoria could also be lost.

Dynamic specializes in the design and fabrication of the domed enclosures for the world's largest telescopes. It also makes amusement rides for some of the world's biggest theme parks.

Canada is one of five partner countries that committed to spend $1.2 billion to build the Thirty Meter Telescope (TMT) in Hawaii, which would be the second largest in the world.

Dynamic designed the TMT's unique "calotte" domed enclosure, which will house a telescope being built by Mitsubishi Corp.

In addition to designing the enclosure, Dynamic hopes to win the $150 million fabrication contract to build it. That would double the company's headcount – now 120 – and create spinoffs for other local companies.

But the company worries it could lose the fabrication to another partner country if the Canadian government doesn't live up to its commitment to the TMT project – $300 million over nine years.

Asked if Canada plans to fulfil its commitment, Sébastien Gariépy, Moore's official spokesman, wrote: "Our government remains focused on jobs, growth, and the economy. We cannot speculate on Canada's potential participation in the Thirty Meter Telescope project at this time."

That uncertainty puts roughly $200 million worth of work for B.C. companies and scientists in question.

"It could go to China, it could go to Japan, but somebody else would take what we've designed and build it," said Dave Halliday, chairman of Dynamic Structures and CEO of Innovative Optics. "That would be terrible."

The TMT partnership plans to start construction in April 2014, and TMT project manager Gary Sanders said he would prefer that Dynamic Structures build it.

"I would hope that they fabricate this because they understand it very well," he told Business in Vancouver. "They're certainly my first choice."

But contract work goes only to countries that fund the project. Of the five involved, only China and Canada have yet to finalize their financial commitments.

Dynamic Structures isn't the only B.C. entity that would lose out. Victoria's Herzberg Institute of Astrophysics would miss out on the $40 million to $50 million contract to build what Sanders describes as TMT's "sexiest" feature: adaptive optics.

Adaptive optics eliminate the interference caused by the Earth's atmosphere – the reason the Hubble telescope was launched into space.

"Canada is of enormous importance to the project," Sanders said. "Two of the sexiest parts of the project are being done in Canada."

Each country's contribution buys its astronomers time on the telescope. Canada's share is 20%, so it's not just jobs that are on the line: Canada's astronomers would also be shut out of the world's second most powerful telescope.

In addition to the direct jobs and spinoffs the TMT project would create, it would raise B.C.'s manufacturing profile, said Marcus Ewert-Johns, B.C. vice-president for the Canadian Manufacturers and Exporters.

"The kind of manufacturing that is done in B.C. is almost invisible – it gets overlooked," he said. "These guys are playing on a major multi-national project that's going to have significant profile."

Focusing on telescopes and amusement rides

Empire Industries Ltd. (TSX-V:EIL) subsidiary Dynamic Structures specializes in two different kinds of steel fabrication: large amusement rides for theme parks and observatory enclosures for large telescopes.

It has built 10 telescope enclosures, including the one housing Hawaii's Keck telescope – currently the world's largest.

Its new Innovative Optics spinoff has developed robotics technology for polishing large telescope mirrors that makes the mirrors lighter, thinner, less costly and quicker to make.