Ottawa awards Telesat $2.3B Arctic military satellite contract

A Canadian telecommunications firm has signed a deal with the federal government worth $2.3 billion to provide high-speed satellite communications to the Canadian Armed Forces in the Arctic.

The federal Defence Investment Agency and Telesat LEO announced the deal on Monday. The contract is meant to secure broadband coverage in remote northern locations for a range of Canadian military activities, including Norad.

This is the largest contract ever for the Ottawa-based Telesat, which has been in operation for about 60 years. It's expected to give the company's network growth plans a major boost.

Telesat CEO Dan Goldberg said the contract will allow his firm to increase the size of its planned low-Earth orbit satellite network by about 44 per cent by adding another 69 satellites.

"We're massively expanding the size of the constellation, which just makes it more competitive, higher performing, more resilient — just a much more powerful network," he said.

The company wants to quickly establish the broadband satellite service — which is to be used for both civilian and military purposes — and to eventually compete with the Starlink service run by Elon Musk's SpaceX.

"Everyone around the world, including even the U.S. government, is very much wanting more competition for these very strategic services," Goldberg said.

Telesat currently has one satellite prototype in orbit for extensive testing but says it plans to begin launching new low-Earth orbit network satellites next year.

Service through the federal government contract is set to start in early 2028. The firm's federal contract also comes with two five-year option periods that could increase the contract's value to $2.7 billion and extend it to 15 years.

The federal government can use the network for fighter jets, drones, ships, icebreakers and forward-operating bases in remote locations, according to Telesat.

The federal government has said the Canadian military currently has few options for satellite communications in the Arctic.

This is one of the first major military contracts to be handled by Ottawa's new Defence Investment Agency.

The procurement project is not new and appeared to languish for years. Telesat first replied to a request for information on it back in 2008.

The project has advanced rapidly under Prime Minister Mark Carney's government, which has vowed to meet steep NATO defence spending commitments and accelerate military procurement.

This announcement comes just eight months after Ottawa signed a strategic partnership in December 2025 with Telesat and Canadian satellite manufacturer MDA Space.

Carney's office had hinted the multi-billion dollar contract was coming during the NATO summit in Ankara, Turkey last month.

As part of a package of defence spending measures Ottawa presented to NATO allies, the PMO announced on July 8 the government had reached an "agreement-in-principle" with Telesat to use the network for "sovereign, reliable and continuous military satellite communications in the Arctic."

Goldberg said it's "all happening right here in Canada."

"We're a Canadian company. MDA is a Canadian company. All the R&D for this very advanced network, developed right here in Canada," he said. "We'll be operating this new constellation from a brand new, high-tech facility we're building in Gatineau, Que., that will have a few hundred people operating it."

MDA Space announced Monday it won a $474 million contract to supply the additional satellites to Telesat, which will be made in Montreal.

Telesat will provide the dedicated military satellite connectivity on the Ka-frequency band from 65 to 90 degrees North latitude, starting just south of the Arctic Circle and reaching up to the North Pole.

The company isn't sharing exactly how much communications capacity the government will get, but said it will be substantial.

Telesat will also look to sell its satellite capabilities to other governments around the world and to commercial customers such as mobile networks, cruise ship operators and commercial airlines.

This report by The Canadian Press was first published Aug. 4, 2026.

By Kyle Duggan | Copyright 2026, The Canadian Press. All rights reserved.