The government of Canada has agreed CAD 1.44 billion in funding for Telesat to support the launch of its Lightspeed Low Earth Orbit (LEO) satellite network. The investment is expected to help ensure affordable broadband internet and LTE/5G connectivity for Canadians in the north and remote areas of the country,.
Under the terms of the agreement, the government of Canada will provide a loan of CAD 790 million and make a CAD 650 million preferred equity investment in Telesat Lightspeed, on which it will receive dividends. The government also will get warrants that can be converted into Telesat Lightspeed shares later.
In return, Telesat will commit to make certain minimum capital and operating expenditures in Canada in connection with the roll-out. This includes at least CAD 1 billion of capital expenditures for its initial Lightspeed constellation and the lesser of CAD 2.6 billion or 50 percent of certain capital expenditures for its subsequent constellation.
Through Telesat and its Canadian supply chain, the Telesat Lightspeed program is expected to support over 1,500 Canadian jobs, largely in STEM sectors. The company itself committed to at least 700 FTEs in Canada.
The Telesat Lightspeed network is initially comprised of 298 satellites designed to deliver multiple-Gbps speeds everywhere in Canada and across the globe. Services in Canada's far north are expected to start in 2024, helping the country reach its goal of universal broadband access by 2030. The company has already received funding from the government of Quebec and support in Ontario for the project.
In total, Telesat has arrangements for approximately CAD 4 billion in funding for the program, including CAD 1.7 billion of its own funds. The company said it expects to secure in the near term the remaining money required to fully finance Lightspeed, largely from export credit agencies.
