Canada Awards Multibillion-Dollar Military Satellite Deal to MDA Space, Telesat — Update

By Paul Vieira and Adriano Marchese

OTTAWA--MDA Space and Telesat have won a potentially lucrative multibillion-dollar contract from Canada to deliver military satellite communications capabilities as part of Ottawa's renewed effort to ramp up defense spending and deter threats from Russia and China in the Arctic.

Shares in both MDA and Telesat rose sharply on the news, which marks one of the first big military procurements under Prime Minister Mark Carney after he pledged to accelerate military outlays to help protect the continent and placate longstanding concerns from U.S. officials and lawmakers about Canada's defense capability.

Under the pact, MDA and Telesat will work toward deploying satellite communications in the Arctic--a project that Canadian government documents indicate could have a price tag of over 5 billion Canadian dollars, or the equivalent of $3.6 billion.

"These investments will do more than strengthen our security--they will grow our economy," said David McGuinty, Canada's defense minister. "Telesat and MDA Space are anchor Canadian companies, and we're proud of them."

McGuinty said the satellites, when deployed, will provide enhanced early-warning detection and allow the country's armed forces to support surveillance operations and search-and-rescue efforts.

Shares in MDA, based in Brampton, Ontario, rose nearly 6% in trading Tuesday on the Toronto stock market, while shares in Telesat climbed by a bigger 8.5%.

At a press conference, Telesat chief executive Dan Goldberg said this deal marked a big milestone for the company, as well as for MDA. "This is something that has long been identified a long time ago here in Canada as an essential capability, and in all truth it languished until now."

In the government's 2025 budget plan, released last month, Canada pledged to spend roughly C$60 billion over the next five years to rearm and rebuild the country's armed forces. The increase in outlays means Canada will meet this fiscal year its obligation under the North Atlantic Treaty Organization to spend at least 2% of gross domestic product on defense. Canada has also pledged to meet NATO's new target to spend 5% of GDP on defense by 2035.

Carney and other Canadian officials, however, have said their priority is to ensure defense spending bolsters the country's economy. To that end, Carney established a new defense investment agency, led by former Goldman Sachs banker Doug Guzman, that aims to consolidate the procurement process and link military procurement to domestic industrial benefits.

Canada's failure to meet the 2% threshold drew the ire of U.S. officials, among them President Trump, and western allies. Carney's decision to accelerate defense spending plans coincides with efforts by Ottawa to secure tariff relief from the U.S.

Military analysts have repeatedly warned that the radar and satellite-image capabilities in the Canadian Arctic require an upgrade, given Russia's development of a new generation of long-range air- and sea-launched cruise missiles, and hypersonic missiles. China is also developing missiles.

Write to Adriano Marchese at adriano.marchese@wsj.com and Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

December 09, 2025 13:04 ET (18:04 GMT)