The Quebec government is investing $400-million in Telesat’s satellite internet venture, providing a boost to the province’s struggling aerospace sector.
The investment, which is comprised of a $200-million loan and a $200-million equity stake in the constellation of low-Earth-orbit satellites, will create 600 new jobs in Quebec, the province announced on Thursday.
As part of the deal, Telesat will build a campus in Gatineau with a satellite control centre, a customer service centre, an engineering lab and other operations, and will hire about 320 staff. The constellation, dubbed Lightspeed, is a $5-billion endeavour that will allow the company to beam high-speed internet to remote areas.
Telesat also announced it has chosen Canadarm maker MDA Corp. to manufacture the phased array antennas for the satellites. MDA said it is in advanced discussions with Telesat’s prime contractor, Thales Alenia Space, about completing the final assembly of the satellites in Quebec. (Phased array antennas can be electronically steered to point in different directions without having to move.)
Telesat chief executive officer Dan Goldberg said the company chose the province because of its long-standing expertise in the aerospace industry, and because its long-time partner MDA (formerly MacDonald, Dettwiler and Associates) is there.
Quebec Economy Minister Pierre Fitzgibbon said the project provides a jolt to the province’s aerospace industry, which has suffered a blow over the past year due to the COVID-19 pandemic.
“The Telesat project will raise the international profile of Quebec engineering and our space industry. It gives us a key position in the new, private-sector space race,” Mr. Fitzgibbon said in a statement. He added that the government’s investment is one of the most important since it came to power in 2018.
“We believe that there will be a significant impact to wealth creation for Quebec,” Mr. Fitzgibbon told reporters. The project will inject an estimated $1.8-billion into the province’s aerospace sector.
Ottawa-based Telesat announced its choice of the French-Italian Thales Alenia Space to build Lightspeed earlier this month. The communications system will have 298 satellites in an orbit about 1,000 kilometres above the Earth, and a ground network.
Once production ramps up, one satellite will be produced a day, Mr. Goldberg said.
“It’s mind-boggling. It takes three years to build one of our current satellites,” Mr. Goldberg said, referring to the company’s existing constellation of geostationary satellites.
Telesat expects to start launching satellites in two years and to begin offering service in Northern Canada by the end of 2023, Mr. Goldberg has said. Full global coverage is expected in the second half of 2024.
The company has received federal government support for the project, including $85-million in research and development funding. Ottawa has also promised to provide $600-million over the next decade to support the delivery of broadband.
Telesat is still waiting to hear whether Ottawa will compensate the company to vacate spectrum – airwaves used to transmit wireless signals – that the government wants to repurpose for the coming wave of 5G wireless services. Mr. Fitzgibbon urged the federal government on Thursday to step up its support for the Lightspeed project.
Both Telesat and MDA expect to become public companies. Telesat plans to go public on the Nasdaq Stock Exchange in the second or third quarter of this year, and is also considering a Canadian listing.
MDA, meanwhile, was bought by a group of investors led by John Risley’s Northern Private Capital for $1-billion last year. The investors, who include former BlackBerry Ltd. chairman and co-CEO Jim Balsillie, have said they plan eventually to take the company public.
With a report from Nicolas Van Praet
Editor’s note: (Feb. 19, 2021) This story has been updated to reflect that MDA says it is in advanced discussions with Telesat’s prime contractor, Thales Alenia Space, about completing the final assembly of the satellites for its Lightspeed project in Quebec.
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