Ottawa-based Telesat has signed a $2.3 billion deal with the federal government’s Defence Investment Agency to provide secure satellite connectivity across the Arctic for the Canadian Armed Forces.
There’s also two five-year option periods worth roughly $200 million each and the total climbs to a whopping $2.7 billion.
The biggest deal Telesat has ever signed runs 15 years including the options, with service starting in 2028. It falls under the Enhanced Satellite Communications Project, or ESCP-P, and covers Military Ka-band connectivity across the Arctic between 65 and 90 degrees North.
Telesat’s Lightspeed constellation gets bigger right away, as the company is adding 69 fully funded satellites, taking the initial network from 156 up to 225. That’s a 44% jump in capacity, paid for through milestone payments from Ottawa (and taxpayers) beginning this quarter.
All 69 will be built by MDA Space in Montreal, and SpaceX is handling launches on Falcon 9 rockets. Most of those launch slots are already locked in, with one more pending a services agreement.
“This contract ensures the Canadian Armed Forces will have access to secure, resilient and sovereign connectivity years earlier than originally planned, at a great value for money, and with a scalable architecture designed to meet future global operational requirements and support interoperability with Canada’s allies and partners,” said Telesat President and CEO Dan Goldberg, in a statement on Tuesday.
This is not the first time public money has gone into Lightspeed, and it’s not close.
In 2021, Ottawa committed $1.44 billion to help finance the network through loans and preferred equity. That came after a $214 million contribution from the Strategic Innovation Fund in 2019, plus $400 million from Quebec and $109 million from Ontario, both tied to local engineering jobs and manufacturing commitments. Now there’s another $2.3 billion, this time as a service contract rather than financing.
Total investment in the 225-satellite network is expected to reach roughly $7 billion, of which $2.7 billion has been spent so far. Back in March, Prime Minister Mark Carney touted Telesat Lightspeed as a rival to Starlink.
So the public is now both a major financier of Lightspeed and, as of this week, its anchor customer. Whether that’s smart industrial policy or an expensive way to prop up a constellation that has repeatedly slipped its timelines depends on whether the thing actually flies on schedule in 2028. Lightspeed was originally supposed to be in service years ago.
Arctic connectivity has been a real gap for Canadian forces, and the alternative has generally meant leaning on American systems. Telesat is also pitching the Mil-Ka capability at NATO members and allied partners, so there’s export potential beyond the CAF.
Telesat says the program should create and sustain thousands of jobs in Canada. Global Lightspeed service is still on track for the first quarter of 2028, and currently there are zero operational Lightspeed satellites in orbit.
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