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Canadian officials block satellite sale to U.S.

The Canadian government puts its foot down by barring the $1.3 billion sale of a Canadian satellite company to a U.S. firm.

The Canadian government has put the kibosh on the $1.3 billion sale of a Canadian satellite company to a U.S. firm for fear that such a deal would give the U.S. government too much control over sensitive satellite images.

The government said Thursday that it was blocking Alliant Techsystems' bid for MacDonald Dettwiler and Associates to protect Canada's sovereignty. The New York Times noted this was the first time in 23 years that the Canadian government has blocked such a sale to a foreign company.

The satellite, called Radarsat2, is owned by MacDonald Dettwiler, but the Canadian government financed a good portion of the construction and launch. It is uniquely positioned over the Arctic with views of the Arctic sea passage ways that could one day be used for shipping. In exchange for its investment, the Canadian government has access to images from the satellite.

Opponents of the deal fear that if the company were sold, U.S. officials would be able to ask Alliant Techsystems to let them see images of ships traveling through the Arctic. Canada has long claimed sovereignty over the Arctic sea passages, but the U.S. maintains that those waters are international.

Alliant Techsystems has 30 days to appeal the government's decision.