August 12, 2021 - Ottawa, Ontario
As Canada prepares to emerge from the pandemic, the Government of Canada is making the investments required for a robust economic recovery. Strategic investments in connectivity not only act as a catalyst for job creation and economic growth but also facilitate the government's commitment to providing all Canadians with access to high-speed Internet.
Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, together with the Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry, announced that the Government of Canada has entered into an agreement-in-principle with Telesat to invest $1.44 billion into Telesat's advanced low Earth orbit (LEO) satellite constellation, Telesat Lightspeed. The implementation of this agreement-in-principle would provide financing to Telesat through a $790-million repayable loan and a $650-million preferred share equity investment for which the government would receive a dividend. As part of this investment, the government would also receive warrants that can be converted into common shares in Telesat so that Canadians can share in the financial upside from Telesat Lightspeed.
Telesat Lightspeed will position Telesat, and Canada, as global leaders in the highly competitive market for satellite services and the fast-growing new space economy. Telesat Lightspeed will enable broadband Internet and LTE and 5G connectivity in Canada starting in 2024, ultimately connecting approximately 40,000 households in rural and remote regions. It will also allow for significantly better service offerings in many regions of the country where current speeds struggle to meet the demands of an increasingly digital world, and it will improve the company's service for business clients in industries like air transport and shipping.
This technology will help the government reach its goal of connecting all Canadian households to high-speed Internet by 2030, including many Indigenous communities throughout the north and near north that lack the connectivity required for social, economic and cultural prosperity.
This investment comes with many benefits to Canadians. Telesat has committed to:
- investing $3.6 billion in capital expenditures in Canada
- spending over $1.6 billion in Canadian operating expenses over the next 15 years
- maintaining up to 700 jobs
- supporting post-secondary students through 100 co-op jobs and $800,000 in scholarships, with a focus on women in STEM programs
High-speed Internet is an essential means for people, businesses and institutions to access information, offer services and create opportunities. By investing in Telesat Lightspeed, the government is taking an important step towards its goal of connecting all Canadians to high-speed Internet, regardless of where they live.
Quotes
"Today's announcement is about building a strong future for Canada. It strengthens our position as a global leader in the technologies of tomorrow and helps ensure that all Canadian communities have access to the critical infrastructure that is high-speed Internet."
- The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance
"Now is the time to bolster Canada's position as a global leader in the new space economy. Through its partnership with Telesat, our government is creating more high-skilled jobs, enabling innovation and helping to unlock economic and social opportunities in Canada's most rural and remote communities. Every Canadian should have access to affordable high-speed Internet. Today, we took a big step towards making that happen."
- The Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry
"The Government of Canada's investment in Telesat Lightspeed underscores the project's transformational ability to bridge the digital divide, position Canada at the forefront of the burgeoning New Space Economy, and deliver sustained and high quality job creation and economic growth in Canada. We applaud the Government's recognition of the importance and promise of Telesat Lightspeed. With the funding announced today and other financing sources already in place, including the previously announced investment by the Government of Quebec, Telesat now has arrangements for approximately $4 billion in funding for the program. We expect to secure in the near term the remaining financial commitments required to fully finance Telesat Lightspeed."
- Daniel S. Goldberg, President and CEO, Telesat
Quick facts
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Canada's Connectivity Strategy aims to provide all Canadians with access to Internet speeds of at least 50 megabits per second (Mbps) download/10 Mbps upload.
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Telesat is a privately held Canadian-controlled corporation and one of the world's largest and most innovative satellite operators. It has employees in five provinces and in Nunavut.
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Satellites in low Earth orbit (LEO) operate 35 times closer to the Earth than traditional telecommunications satellites. This means they take less time to send and receive information, leading to better and faster broadband service, even in rural, remote and northern areas.
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LEO satellite technology is expected to be the only economical way to provide advanced high-speed broadband and LTE and 5G connectivity in the hardest-to-reach rural and remote communities in the next several years.
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Telesat expects to be able to provide capacity to Canada's far north in 2024.
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Completion of the government's investment is dependent on Telesat satisfying a number of conditions, including successfully concluding the financing and other arrangements now under discussion with other parties that are required for fully finance and complete Telesat Lightspeed.
