Canada invests C$85 million in satellite company to narrow broadband gap for remote areas

OTTAWA (Reuters) - The Canadian government said on Wednesday it is investing C$85 million ($64.70 million) in an Ottawa-based satellite company as part of an effort to provide better broadband internet access to rural and remote communities.

FILE PHOTO: Canadian Minister of Innovation Science and Economic Development, Navdeep Bains, introduces Blackberry CEO John Chen (not pictured) at the North American International Auto Show in Detroit, Michigan, U.S., January 15, 2018. REUTERS/Rebecca Cook/File Photo

Innovation, Science and Economic Development Minister Navdeep Bains said the funding would be used by Telesat to build and test technologies that use low-earth-orbit (LEO) satellites to boost connectivity.

“This new, space-based system will provide a dramatic and disruptive improvement over existing satellites,” Telesat Chief Executive Officer Dan Goldberg said, adding that the technology will be affordable and reliable.

LEO satellites operate 36 times closer to the earth than traditional telecommunications satellites. This means they take less time to send and receive information, leading to better and faster broadband service, even in rural, remote and northern areas.

Bains said Canada has also entered a preliminary agreement with Telesat that would address “connectivity gaps in rural and remote communities by bringing fiber-like internet to Canadians no matter where they live.”

A memorandum of understanding foresees the Canadian government committing up to C$600 million over 10 years for “privileged access” to the satellite network and to help deliver C$1.2 billion in affordable high-speed internet.

The privileged access will not be limited to isolated or rural communities, Bains said.

“This will benefit the Canadian government as a whole, and of course our military will benefit,” he said.

Prime Minister Justin Trudeau’s Liberal government promised to make high-speed internet available to all Canadians by 2030. The government has committed up to C$1.7 billion, which included funding for LEO satellites, to achieve this target.

In 2018, the Canadian government promised to invest C$100 million over five years in projects designed to boost broadband connectivity via the use of LEO satellites.

Reporting by Steve Scherer; writing by Kelsey Johnson; editing by Paul Simao and Bill Berkrot