Canada Wants a Space Economy. Who Carries the Risk?
A streamlined approval system could help Canadian space companies grow. But the proposed rules also raise harder questions about insurance, liability and public exposure.
Ottawa is preparing rules for a bigger Canadian presence in orbit. Faster approvals will mean little without clear safeguards for taxpayers, security and the space environment.
It is easy to celebrate a rocket on a launch pad. The harder work is writing the rules for what happens afterward: who gets permission to operate in space, what safeguards follow the mission and who is responsible when something goes wrong.
On October 22, Ottawa opened consultations on a proposed Canadian Space Act, covering activities from satellite operations to manufacturing and servicing spacecraft in orbit. The new Act has not been introduced as a bill. The separate Canadian Space Launch Act, Bill C-28, remains before Parliament. That gives Canada an opportunity to establish the ground rules before commercial activity moves further ahead — an opportunity it should use wisely.
Make the rules work — without watering them down
Canada's space activities are overseen through different federal laws and departments. During a 2023 Canadian Space Agency consultation, participants called for clearer responsibilities, predictable approvals and better coordination. Companies need rules they can understand, particularly when new technologies don't fit neatly into old categories.
Innovation, Science and Economic Development Canada (ISED) is considering a comprehensive Space Act that would bring more activities under one framework, alongside a narrower alternative that would preserve more of the existing system. It is also exploring a single-window service to coordinate applications, although some missions would still require separate approvals.
Less duplication makes sense. But simpler administration must not mean weaker scrutiny, especially when a mission involves sensitive information, national-security interests or risks to other spacecraft.
The liability question Canadians shouldn't miss
Perhaps the most consequential part of ISED's consultation document, SPB-007-26 may be section 4.6, which deals with liability, insurance and indemnification.
Ottawa is asking whether operators should face insurance or financial-guarantee requirements, whether their liability should be capped and whether government might provide a backstop for catastrophic losses. These are options under consideration, not commitments already made.
A government backstop could be defensible for exceptional risks that commercial insurers cannot reasonably cover, particularly when a capability serves Canada's strategic interests. But that decision deserves public scrutiny. Taxpayers should know what losses might qualify, what protection an operator must carry and what limits would apply to any federal commitment.
Canada already has obligations under the United Nations Liability Convention. A launching state can face liability without proof of fault for damage caused by its space object on Earth's surface or to aircraft in flight. Specified damage involving other space objects in space is subject to fault-based rules.
Those international obligations do not mean every accident automatically becomes a taxpayer expense. Domestic insurance and indemnification arrangements are separate questions, and the proposed framework must address how responsibility is shared between operators and government.
Canada should encourage commercial investment. It should not create a system in which private operators enjoy the rewards while the public is left guessing about the risks it may be expected to carry.
Safety and sovereignty come with the licence
Financial exposure is only part of the picture. The consultation also considers debris mitigation, collision avoidance and end-of-life spacecraft disposal, along with security assessments, inspections and enforcement powers.
These are not administrative inconveniences. Satellites support communications, navigation, surveillance and infrastructure Canadians rely upon. A collision can threaten other operators, while weak security or poor disposal practices can create problems long after a mission's original purpose has ended.
Regulatory requirements should reflect the risks of each mission without unnecessarily burdening smaller innovators. They must also be enforceable. A faster licence is little comfort if Ottawa cannot determine whether its conditions are being met years later.
Canada has compelling reasons to develop a stronger domestic space industry: skilled jobs, Canadian technology, resilient infrastructure and greater control over capabilities we depend on. Those are ambitions worth pursuing, and a modern regulatory system can help deliver them — provided ambition comes with accountability.
The consultation closes December 21, 2026. Ottawa should use the responses to establish clear principles for liability, oversight and security before asking Parliament to settle the details.
Canada does not need to choose between building a competitive space economy and protecting the public interest. A serious space industry requires both. And the measure of that seriousness isn't just what we can put into orbit. It's whether we can explain who's responsible once it gets there.