Question Period Note: FUNDING FOR TELESAT

How is Canada supporting the Telesat Low-Earth-Orbit satellite project?

• The Government of Canada has committed to a repayable loan investment of $2.14 billion to support Telesat Lightspeed – Telesat’s Low-Earth-Orbit satellite constellation.
• Telesat Lightspeed will solidify Canada's position as a key global player in the highly competitive market for satellite communications services and the fast-growing new space economy.
• Supporting Telesat’s Lightspeed satellite constellation will act as a catalyst for job creation and economic growth in Canada.

• The investment will also help bring reliable high-speed Internet access to Canadians in the country’s hardest-to-reach rural and remote communities.

Low Earth Orbit (LEO) technology is the next generation of satellite communication. Featuring large constellations of small satellites that orbit closer to the surface than traditional satellites, LEO offers lower latency and higher bandwidth communications and will play an important role in connecting the hardest to reach homes in Canada, and in particular the far north. There are a number of proposed LEO constellations at various stages of development by companies around the world including Telesat, OneWeb, Kuiper (Amazon) and Starlink (SpaceX).
On September 13, 2024, Prime Minister Justin Trudeau announced an agreement with Telesat to complete and operate Lightspeed – one of the world’s most innovative satellite networks. With a $2.14 billion loan from the Government of Canada, Telesat Lightspeed will be Canada’s largest ever space program, supporting 2,000 jobs across the country through Telesat and its supply chain. This includes prime satellite contractor MDA Space, who develops and operates the iconic Canadarm technology.
Telesat Lightspeed will expand Internet and 5G networks in communities across Canada, with affordable, high-speed broadband connectivity. As a LEO satellite network, it will take less time to send and receive information, leading to better and faster Internet service, even in rural, remote, and Northern communities. The network will accelerate the government’s work to connect all Canadians to high-speed Internet by 2030.
The term of the government’s loan is 15 years and it will carry a floating interest rate of 4.75% above the Canadian Overnight Repo Rate Average (CORRA). Interest is payable in-kind during the Telesat Lightspeed construction period, followed by a 10-year sculpted amortization. The government will also receive 10% warrants in the project, which combined with loan interest will provide a positive rate of return to the government. Quebec is also providing $400 million to the project on terms similar to Canada’s.
As part of this loan, Telesat will also remain Canadian controlled and headquartered until at least 2039; spend at least $4.4 billion in domestic capital expenditure; directly create and maintain 700 high-paying jobs and support youth development through annual co-ops and scholarships in STEM; and support government efforts to bolster resiliency of the telecom sector during emergencies by providing access to LEO services.
Separate from the $2.14 billion loan agreement, the Government of Canada has also committed $600 million to secure satellite capacity for high-speed Internet over Canada on Telesat Lightspeed once it is operational. This capacity will be made available to Internet service providers at a reduced rate in order to support their efforts in bringing affordable, reliable high-speed Internet access to the most challenging-to-reach rural and remote communities in Canada, such as those in the Far North.
On July 24, 2019, the Government of Canada announced an $85 million investment in Telesat through the Strategic Innovation Fund (SIF) to build and test innovative technologies for its low Earth orbit (LEO) satellite constellation. The SIF funding is also separate from the $2.14 loan investment but will support the research and development of new technologies that will be used in the LEO satellite constellation.

• As part of this investment, the Government of Canada will receive interest on its loan and stock warrants so that Canadian taxpayers benefit from the financial success of Telesat’s Lightspeed program.
• The investment will also support the government’s goal of connecting 100% of Canadians to high-speed Internet by 2030.