On Tuesday, Telesat announced that Canada had selected it for a military satellite communications program focused on the Arctic. Shares of Telesat Corp. and MDA Space Ltd. surged on the news. The Ottawa-based firm, Canada's biggest homegrown satellite operator, said the agreement runs 15 years and provides the armed forces with secure links through its upcoming low-Earth-orbit fleet. It also includes two optional five-year extensions and is worth up to C$2.7 billion ($1.9 billion).
By 12:39 p.m. in New York, Telesat's stock was up 32 percent to C$52.91, its largest intraday move since August 2023. In Toronto, MDA shares rose 16 percent to C$49.04, their biggest intraday gain in a year.
Telesat said the contract is "the largest in its 57-year history." The system is intended to give Canadian military users dependable, protected communications, particularly in northern regions.
For much of its history, Telesat transmitted TV programming and data from satellites parked in high orbit, about 22,300 miles above Earth. Lightspeed marks a strategic shift. The new network runs in low-Earth orbit, where the shorter distance to the ground supports faster transmission and lower latency.
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Telesat is pitching Lightspeed as a rival to Starlink, the broadband service from Elon Musk's Space Exploration Technologies Corp., in the satellite-internet market. Canadian service is scheduled to start in the first quarter of 2028. Building the constellation has required aggressive financing steps, and those have added strain to Telesat's balance sheet.
The military contract helps ease some of that strain by giving the project a committed government customer before service begins. Milestone-based payments are expected to start in the third quarter of 2025, providing a nearer-term revenue stream while the fleet is still being built.
The military contract expands the fully funded portion of Lightspeed by 69 satellites, bringing the planned total to 225. The added satellites also translate into C$474 million in extra work for MDA Space, an Ontario-based partner in constructing the network.
Lightspeed is central to Telesat's modernization effort. The company's older satellites sit in geostationary orbit, which suited broadcasting but created higher latency. The low-Earth-orbit network is designed to close that gap and compete for internet customers.
The Canadian military contract gives Lightspeed a committed anchor customer before launch and helps offset some of the financial pressure from building the constellation. MDA Space's expanded role also ties more of the manufacturing to Canada. The contract's milestone payments, set to begin in the third quarter of 2025, are meant to provide revenue while the fleet is still under construction.
The award supports Prime Minister Mark Carney's broader effort to reduce Canada's reliance on the United States. Still, the country is not entirely free of SpaceX. Telesat will use rockets built by Musk's company to launch the satellites.
MDA Space's expanded role also keeps more of the satellite work in Canada, where the network is being built.
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