Canada signs $600M deal for Telesat internet in remote areas

Affordable satellite internet in northern communities appeared to edge closer on Monday as the Canadian government announced a $600-million deal with provider Telesat.

The deal buys space on Telesat’s low Earth orbit satellites, which the company promises “will transform connectivity in Canada.” Rivals like Elon Musk’s SpaceX are lining up to provide similar services, with SpaceX’s Starlink service receiving regulatory approval last week.

Progress for Telesat and Starlink should mean northern Canadians soon enter an era of faster, more reliable, and – potentially – cheaper internet, though the ramifications for competition in the marketplace are not yet clear.

Telesat’s deal with the federal government sets aside capacity on its satellites that can be bought by other service providers – at a reduced rate – for sale to people in remote and rural communities, like many in the Northwest Territories.

But we don’t yet know who will be buying that space and selling it on, which could have significant consequences for consumers.

Northwestel, the current dominant player in northern internet – it owns the only fibre line into the Northwest Territories from the south – already has a memorandum of understanding with Telesat.

That agreement forms part of Northwestel’s pledge to introduce much faster internet to remote NWT communities by 2023, including unlimited packages that the company says will be offered at Yellowknife prices, no matter the location.

It’s not clear how Ottawa’s deal with Telesat will operate alongside Northwestel’s deal, or whether rivals to Northwestel will be able to acquire federally reserved Telesat space and use the same satellites to offer a competing service.

Alternatives like Starlink could also provide a route to increased northern competition, though the various low Earth orbit networks are at different stages in their development.

Telesat says its network already covers polar regions. Starlink’s coverage currently reaches only the 57th parallel according to industry website SpaceQ, quoting Musk earlier this month.

“By the end of next year we hope to have full global coverage, including the poles,” Musk was quoted as saying.

Ottawa sets 2026 target

Monday’s announcement came amid a broader federal pledge to spend $1.75 billion connecting Canadians to high-speed internet, up from an initial billion-dollar commitment in 2019.

Amid a range of programs backed by that money, $150 million is dedicated to an “accelerated application process to allow shovel-ready projects to get started right away.”

Funding announced on Monday is separate to the $62 million provided to Northwestel by telecoms regulator the CRTC earlier this year. That money is going toward the company’s own plans to roll out high-speed, unlimited internet in the North.

The Canadian government says the increase in financial backing will mean 98 percent of the country’s residents have access to fast internet by 2026, defined as 50 Mbps download speeds and 10 Mbps upload speeds.

At the moment, according to CRTC data, only 41 percent of people in rural and remote communities have such access.

The Conservatives on Monday said the Liberal target of 2026 was not nearly soon enough, labelling that timeline “unacceptable and a slap in the face.”