Canadian government’s satellite deal prompts Conservatives to call for Elon Musk’s involvement – National

A $2.14 billion federal loan to an Ottawa-based satellite operator has sparked a row among Canadian politicians over whether U.S. billionaire Elon Musk poses a national security risk.

The fight is over internet access in remote regions as Canada tries to deliver on its promise to provide every Canadian household with access to high-speed internet by 2030.

Telesat CEO Dan Goldberg said there “appears to be some confusion” about the nature of his company’s contract with the government.

A week ago, the Liberal government announced a loan to Telesat, a company that will place a constellation of satellites in low Earth orbit that will connect the country’s most remote areas with broadband internet.

Conservative MP Michael Barrett objected to that price tag, asking Musk on social media how much it would cost to provide his Starlink to every Canadian household that does not have high-speed internet access.

“Less than half that,” Musk replied, prompting Barrett to conclude, “That sounds like a reasonable solution for Canada to me.”

In an interview, Goldberg rejected the comparison because his company received a loan, not a grant.

Telesat will pay the government nine percent interest. The Quebec government is also borrowing $400 million. In return, Telesat will give about 12 percent of its equity stake in the company to both governments.

“Nobody asked Elon, ‘Do you want to borrow $2 billion from the Canadian government at 9 per cent interest and give up 10 per cent for Starlink?’” he said. “I think the answer would be very different.”

He noted that part of the loan will eventually go to SpaceX, a company owned by Musk, because Telesat uses the company to launch satellites.

An Innovation Canada spokesman said the new loan replaces a previous $1.44 billion loan announced in 2021 that was not executed. The government remains committed to spending $600 million to purchase internet capacity once the system is operational.

The Liberal government is implementing a multi-year initiative to provide all Canadian households with access to high-speed internet, with a goal of 98% coverage by 2026 and 100% by 2030.

The latter communities are the most difficult because they rely on satellite services. Traditional satellite internet, which uses a geostationary satellite higher in orbit, has limitations.

Newer-generation low-Earth orbit satellite systems, such as those launched by Telesat and those used by Musk’s Starlink, use multiple satellites that orbit closer to Earth and can offer high-speed internet without the same issues.

Telesat’s launch plans have already been delayed by years. Goldberg said the delays, some of which were related to challenges related to COVID-19, are “way behind the times,” and the company plans to be fully operational with global coverage by the end of 2027.

The Starlink coverage map shows the service is available in Canada, although its parent company did not respond to questions about the service’s availability in the most remote areas of the country.

Following the exchange between Barrett and Musk, Innovation Minister François-Philippe Champagne accused the Conservatives of wanting to “sell out our national security.”

“When you’re further north, you need a reliable network, and you need sovereignty and resilience in the network. So for me to suggest anything different is a bit crazy.”

He added that Telesat will design and manufacture the system in Canada.

“That’s exactly the kind of sovereignty and resilience we want to see, especially when we’re talking about critical military infrastructure that we also need to defend the North.”

In a statement, the conservatives stuck to their argument that Musk would have been a better choice, with industry critic Rick Perkins saying “there is an established, accessible platform that can deliver high-speed internet today that wouldn’t require billions of taxpayer dollars going into the pockets of liberal-affiliated insiders.”

The Conservatives also tried to link the contract to former Bank of Canada Governor Mark Carney, who was appointed an economic adviser to the Liberals on Sept. 9, four days before the Telesat loan was announced.

Deputy Conservative Leader Melissa Lantsman told the House of Representatives this week that “Carney’s close friend, the CEO of Telesat, received more than two billion dollars in Canadian taxpayer money to build a broadband network that other companies could have built for half the price.”

Currently popular

• Kamala Harris and Oprah Winfrey: Key Moments from Their Star-Studded Rally

• ‘I Couldn’t Stop Crying’: Memorial Created for 5-Year-Old Boy Killed in Home

Goldberg confirmed that Carney was a friend but said he had “absolutely nothing to do” with the loans.

In announcing the loan, the Prime Minister’s Office said Telesat would provide capacity to the defence industry and support NATO and NORAD modernisation.

Goldberg said the agreement did not include details on whether the system would be used for defense. He said the Telesat constellation could be a “key enabler” for Norad’s modernization.

In 2022, the Liberal government unveiled a $38.6 billion plan to modernize the joint air and space warning system for Canada and the U.S.

Musk has become an increasingly controversial and political figure in recent years, particularly since he bought the social media platform Twitter, which he renamed X. He has used his extensive reach to share misinformation.

Just last week, Musk shared a false report of explosives being found near a Donald Trump rally; warned that “if Trump is not elected, America will fall into the hands of tyranny”; and questioned why no one tried to assassinate President Joe Biden or Vice President Kamala Harris after the failed assassination attempt on Trump.

Goldberg suggested there were good reasons to sign such a contract with the Canadian company.

“Space is a highly strategic, capital-intensive sector. If you look around the world, you see that governments routinely partner with their national operators,” Goldberg said.

Erik Bohlin, chair of the department of telecommunications economics, policy and regulation at the Ivey School of Business, noted that there have always been some restrictions on foreign ownership in telecommunications, including in Canada, but the satellite space is “a new area where so much is happening.”

Adam Lajeunesse, an assistant professor of Arctic and maritime security at St. Francis Xavier University, said the government has some valid arguments when it comes to Arctic defense and national security.

He added that there is no reason to doubt that Starlink could meet the Canadian Armed Forces’ needs today, but it is important to look at what might happen to the company in a decade or two.

“Strategic communication is simply essential for all security, protection and defense activities in the North, not to mention civilian activities,” he said. “Having a single supplier, especially when that single supplier is outside the government’s control, is a dangerous situation.”

James Fergusson, a senior research fellow at the Centre for Defence and Security Studies at the University of Manitoba, said Musk is a “Trump guy” who has “said things that are at odds with current American foreign policy.”

However, he noted that the U.S. Department of Defense uses the services of SpaceX, Starlink’s parent company.

“He is not a security threat to Americans.”