SpaceX, Twitter and electric car maker Tesla CEO Elon Musk attends an event during the Vivatech technology startups and innovation fair at the Porte de Versailles exhibition centre in Paris, on June 16, 2023. (Photo by JOEL SAGET / AFP) (Photo by JOEL SAGET/AFP via Getty Images)
By Andrew Chen
Elon Musk says his company SpaceX’s satellite internet service Starlink would be able to provide coverage to Canadian households for “less than half” the cost of a recently announced multibillion-dollar government loan to Montreal-based satellite operator Telesat to provide that service.
Musk was responding to Conservative MP Michael Barrett, who in a Sept. 14 post on X challenged the government investment. The funding consists of a combined $2.54 billion loan to Telesat, consisting of $2.14 billion from Ottawa and $400 million from the Quebec government.
“Less than half that amount” was Musk’s response to Barrett’s post. Barrett had asked, “how much would it cost to provide @Starlink to every Canadian household that doesn’t have high speed? If this $2.14 BILLION plan is the panacea of expanding access, competition, and service – where is the interest from private investors and banks?
A day earlier, the federal and Quebec governments had announced the funding agreement with Telesat to complete and operate Lightspeed, a low-Earth-orbit (LEO) satellite network, with the news release from the Prime Minister’s Office (PMO) saying it will be “Canada’s largest ever space program.”
LEO satellites operate 35 times closer to Earth than traditional telecommunications satellites and thus can send and receive data faster, even in rural, remote, and Northern areas, the release said.
In its Sept. 13 company press release, Telesat said this project will expand “the reach of internet and 5G networks in unserved and underserved communities in Canada and throughout the world, with affordable, high-speed broadband connectivity.”
The PMO said its $2.14 billion investment will create 2,000 jobs across Canada through Telesat and its supply chain, including MDA Space, the prime contractor for developing and manufacturing the satellites.
“Our government is focused on Canadians, and today’s announcement with Telesat and MDA is our commitment in action,” Prime Minister Justin Trudeau said in the press release, adding that Telesat will invest over $4.4 billion in the Canadian economy over the next 15 years.
Additionally, the Telesat Lightspeed network will enhance Canada’s satellite communications capabilities, boosting national security. This includes supporting the modernization of the North Atlantic Treaty Organization and the North American Aerospace Defense Command, the PMO’s press release said.
Besides the $400 million loan to Telesat, the Quebec government is awarding an additional $75 million to MDA, its Sept. 13 press release said in French. The provincial funds are also supporting construction of an expansion at MDA’s satellite manufacturing facility in Sainte-Anne-de-Bellevue, Quebec.
‘Enhanced Project’
A2022 Privy Council Office report said that many Canadians have been dissatisfied with the costly and unreliable internet service options available in the country. The research found that “very few” Canadians consider internet options to be “fairly priced” in their local areas, with many noting they generally pay “far more for these services relative to those living in other jurisdictions.”
Musk had previously highlighted that Starlink, through a constellation of low-Earth orbit satellites, is capable of provide “high speed broadband internet to locations where access has been unreliable, expensive, or completely unavailable.”
In 2020, the Canadian Radio-television and Telecommunications Commission, Canada’s telecommunications regulator, had granted a licence to Musk’s company SpaceX that allowed it to bring its Starlink program to rural Canadians.
In a recent post on X in July, Starlink announced it “is now providing high-speed internet to more than 400k active Canadian customers, connecting ~3% of homes across the country!”
Replying to Musk’s latest comment that Starlink would be a more cost-effective option than the Canadian government loan, Barrett said in a post on X, “That sounds like a common-sense solution for Canada to me.” The term “common sense” is a key slogan for the Conservative Party under leader Pierre Poilievre.
In response, federal Innovation Minister François-Philippe Champagne said the loan to Telesat is intended to support development of a made-in-Canada satellite network that will create jobs in Quebec and strengthen the domestic industry.
“This loan will help build a world-class Canadian made satellite network and supports thousands of jobs in Quebec!” Champagne said in a Sept. 14 post on X. “Now that’s common sense!”
Quebec’s Sept. 13 press release referred to the provincial government’s original announcement of its financial participation in the Telesat Lightspeed aerospace project back in 2021. It was also an investment of $400 million in Telesat, consisting of a $200 million loan and $200 million in preferred equity, along with a $50 million loan to MDA.
“It was initially planned to create 650 jobs, but today, 317 more jobs will be created thanks to the enhanced project, for a total of 967,” the Sept. 13 press release said in French.