Canadian government pledges $521 million for Telesat LEO constellation

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WASHINGTON — The Canadian government is investing 85 million Canadian dollars ($64.7 million) into research and development for Telesat’s broadband satellite constellation, and has agreed to spend up to 600 million Canadian dollars ($456.6 million) more on capacity. 

Minister of Innovation, Science and Economic Development Navdeep Bains said July 24 that the Canadian government views Telesat’s future low Earth orbit broadband constellation as the only means to connect the country’s most remote citizens. 

“This is going to provide us with privileged access to this constellation, which will enable us to get high-speed internet connectivity in rural and remote parts of Canada, and consistent with the commitment that we made in the budget where every single Canadian will have access to high-speed internet access by 2030,” Bains said in a call with reporters. 

Ottawa, Canada-based Telesat is designing a constellation of around 300 satellites for global internet connectivity. The company plans to begin offering regional service that will include Canada in 2022, with global service following in 2023.  

Dan Goldberg, Telesat’s president and chief executive, said the Canadian government’s support will help make the multibillion-dollar constellation a reality. 

“We need the support of government. Even with our strong history and our strong financial position, without government support on a project of this nature it would be very difficult to move forward,” he said. 

Telesat estimates its partnership with the Canadian government will generate 1.2 billion Canadian dollars ($913 million) over 10 years. Bain said the Canadian government intends to buy capacity for a 10-year period starting once Telesat LEO is in service. 

Telesat hasn’t released a cost estimate for the constellation, but European satellite manufacturer Airbus Defence and Space and a consortium led by U.S.-based Maxar Technologies and Thales Alenia Space of France and Italy see the Telesat LEO contract as a $3 billion opportunity. 

Goldberg said Telesat intends to finance the constellation through a mixture of equity, cash flow, and debt. The company will borrow mainly from export-credit agencies, he said. 

Bains, during a press conference at the Canada Aviation and Space Museum in Ottawa, said he would like to see Telesat’s LEO satellites built in Canada — something its manufacturing contenders have offered to do

The Canadian government’s involvement in Telesat LEO gives the system a newfound focus on consumer broadband. The company had previously described its focus on other markets, such as connecting airplanes, ships and businesses, as a differentiator from constellations like OneWeb and SpaceX that emphasize bridging the digital divide. 

Goldberg said Telesat’s LEO constellation will at a minimum match the Canadian Radio-television and Telecommunications Commission’s target broadband speeds of 50 megabits per second downlink and 10 megabits per second uplink, eventually reaching gigabit speeds.  

“As such, Telesat LEO will revolutionize rural broadband connectivity in Canada and the rest of the world,” Goldberg said. 

Bains said roughly 1 million of Canada’s 37 million residents live in rural and remote locations where Telesat LEO will be essential for connectivity. The Canadian government is still finalizing purchase details for Telesat LEO capacity, which is currently at the level of a memorandum of understanding, he said. 

Telesat says the partnership will result in around 500 Canadian jobs, along with investments in scholarships, university partnerships and other initiatives with a focus on creating opportunities for women. The company said it will invest 215 million Canadian dollars over the next five years into research and development.