Telesat CEO Dan Goldberg speaks at a news conference in Ottawa in July, 2019.Sean Kilpatrick/The Canadian Press
Shares of Telesat Corp. TSAT-T and MDA Space Ltd. MDA-T skyrocketed after Ottawa and the Canadian companies struck a deal to establish secure military satellite communications in the Arctic.
In a push to defend sovereignty in the Arctic, Ottawa’s Defence Investment Agency awarded a contract worth as much as $2.7-billion to Telesat LEO ULC, a division of Canada’s largest satellite operator, to expand its lightspeed low Earth orbit constellation.
The announcement on Tuesday morning sent Ottawa-based Telesat’s stock up 47 per cent and closed at $76.84. Shares of MDA Space, which will supply Telesat with its satellites, surged more than 13 per cent and settled at $48.10.
“This is the largest contract in Telesat’s history and will significantly expand the scale and capacity of the Telesat Lightspeed network, positioning the company for accelerated growth,” the company said in a press release.
The contract – a 15-year service period beginning in 2028 – includes two five-year option periods valued at approximately $200-million each, the company said. If the options are exercised, it would increase the initial deal value of $2.3-billion to a total of $2.7-billion.
The deal will expand Telesat’s Lightspeed network of satellites by 69, built by MDA Space in Montreal, bringing Telesat’s total number of fully-funded satellites from 156 to 225 and increasing the total value of MDA Space’s contract with Telesat by $474-million.
“This contract ensures the Canadian Armed Forces will have access to secure, resilient and sovereign connectivity years earlier than originally planned,” said Dan Goldberg, Telesat’s president and CEO.
The satellites will be launched by SpaceX on “already-secured” Falcon 9 rockets in addition to another Falcon 9 rocket that “remains subject to the completion of a launch services agreement,” according to Telesat.
“The program is expected to create and sustain thousands of high-quality jobs in Canada, spur domestic exports, and ensure Canada is at the forefront of the New Space Economy,” Telesat said in the press release.
MDA Space CEO Mike Greenley said the satellites will play an important role in the North.
“Reliable military communication in the Arctic is a necessity for protecting Canadian sovereignty, maintaining situational awareness, co-ordinating joint operations with allies, and responding quickly to emergencies in a region where every minute counts,” Mr. Greenley said in the company’s press release.
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The contract marks the first significant investment for Ottawa’s Enhanced Satellite Communications Project – Polar (ESCP-P). The Department of National Defence said the total funding range for the ESCP-P will exceed $5-billion, which will provide the Armed Forces with ultra-high frequency narrowband and wide-band satellite communications in the Arctic.
The satellite constellation expansion follows a strategic partnership established in December, 2025, between the Department of National Defence, Telesat and MDA Space under the ESCP-P program.
At the time, Canada awarded a $2.92-million contract to Telesat, in conjunction with MDA Space, to conduct engineering and options analysis work.
BMO Capital Markets analyst Thanos Moschopoulos said in a client note that the award isn’t a surprise, “although the specifics around the scope and timing for this phase of the program weren’t previously known.”
The expansion will be funded through milestone-based payments from the Government of Canada starting in the third quarter this year, Telesat said.
The DIA – launched in October, 2025 – is part of Canada’s push to strengthen its sovereign and military capabilities, including efforts to hit NATO’s spending target of two per cent of gross domestic product on defence, after years of weak investment in the industry.
The agency was established to fast-track military procurement processes by centralizing contract review and approval, and removing redundant steps, according to the Prime Minister’s Office. The agency oversees procurements valued at or above $100-million, while smaller contracts go through standard processes.
The DIA said this procurement has the potential to create or maintain 2,600 jobs annually across Canada and contribute $335-million annually to gross domestic product over approximately seven years.
Defence Minister David McGuinty said in a statement the project will accelerate “the delivery of critical capabilities, defending Canada’s sovereignty and security, and strengthening our domestic defence industrial base to deliver for Canadians for years to come.”