Canada invests $85M into advanced satellites to connect rural, remote regions

OTTAWA -- The federal government is spending $85 million to help develop advanced satellite technology with hopes it will one day expand access to affordable, high-speed internet to some of Canada's hardest-to-reach regions.

The funding will support a space project by Ottawa-based company Telesat to build and launch a group of co-ordinated satellites -- also known as a constellation -- in low Earth orbit.

The Trudeau government also said Wednesday it reached a preliminary agreement with Telesat that could see the government commit up to $600 million over 10 years for privileged access to the eventual group of satellites.

The Liberals have set a goal of ensuring all Canadians are connected to high-speed internet by 2030.

"In communities across Canada there continue to be challenges accessing high-speed Internet," said Economic Development Minister Navdeep Bains as he announced the new commitments in Ottawa.

"Just think of the economic opportunities that will be unlocked in Canada's rural and remote communities with reliable access to high-speed internet."

In March, the federal government earmarked between $5 billion and $6 billion over the next decade to connect 95 per cent of Canadian homes and businesses to high-speed internet by 2026.

The Liberal government, however, has faced criticism for its efforts to expand rural and remote connectivity.

Conservative MP Dan Albas said Telesat's technology is indeed promising but he called the announcement Wednesday more of a pre-election strategy than a plan to actually connect rural Canada to high-speed internet in the near future.

"It's nothing more than a pre-election stunt that kicks the can further down the road -- Canadians that live in rural and remote areas need help now," Albas, the party's parliamentary critic for industry, said in a phone interview.

Albas insisted if the Conservatives win power in the October election that securing high-speed internet service in rural areas would be a priority. He argued they could get it done more quickly by bringing together stakeholders, including the provinces, rural communities and companies like Telesat.

Last fall, a report by Canada's auditor general said the Liberal government lacked a clear strategy to meet the connectivity needs in rural and remote areas, leaving people in these regions with less access to key online services like banking, health care and education.

A recent government report said about 37 per cent of rural households had access to internet connections with download speeds comparable to those available to almost all urban homes.

On Wednesday, Telesat said 2.3 million households in Canada do not have access to affordable, reliable high-speed internet.

Telesat says it will send highly advanced satellites into low Earth orbit, which is about 1,000 km from the surface of the planet. Traditional geosynchronous satellites, with locations that appear fixed from Earth's surface, orbit about 35 times farther out. Satellites in low orbit can provide much faster, more responsive digital services, but it takes far more of them to cover the same area.

The firm launched the first such satellite last year. The full constellation will eventually include 298 satellites that will "seamlessly integrate with terrestrial networks," Telesat says on its website.

Other companies have announced bigger plans using similar technology: Amazon is behind a 3,200-satellite project; entrepreneur Elon Musk's SpaceX has a vision for a 12,000-satellite network.

The new partnership between Telesat and the federal government is expected to help the company bring in $1.2 billion in revenue over 10 years.

Under the deal, Telesat has committed to creating 175 new high-skilled jobs and maintaining another 310 positions in Canada. It will also invest $215 million into research and development over the next five years and promote science and technology education.

In its spring budget, the Liberal government said low-Earth-orbit satellite capacity would be part of its $1.7-billion vow to help rural and remote areas in Canada gain access to reliable, high-speed internet service.

The $85-million investment announced Wednesday will be funded through the government's strategic innovation fund. The potential $600-million deal was reached through a memorandum of understanding and will need additional negotiations.

In addition to the development of low-orbit satellite technology, the government plan includes funding aimed at encouraging more private-sector spending on rural high-speed internet and better co-ordination among provinces and territories.

The budget also announced the federal infrastructure bank would seek to invest $1 billion over the next decade as a way to attract $2 billion in additional private investments towards expanding connectivity.