Newly formed federal government
completed its first trade on Tuesday with
And
to equip the Canadian Armed Forces with enhanced military
in the Arctic.
Through what the federal government calls ”
The initial investment of $2.92 million will support the design and options analysis of the Polar Advanced Satellite Communications Project.
The total project cost is estimated at $5 billion and will provide reliable broadband and narrowband connectivity to support domestic and continental operations.
.
“Here at home, the Arctic is transforming at an unprecedented rate,” National Defense Minister David McGuinty said at a news conference in Ottawa.
“As melting ice opens up new waters and attracts new activity, it is no longer a distant problem for Canada, it is a direct challenge to our sovereignty and our security.”
Ottawa-based Telesat share price
satellite communications company
and MDA Space,
The number of companies based in Brampton, Ontario has increased dramatically since this announcement.
Telesat CEO and President Dan Goldberg called Tuesday's announcement a “game changer” for
defense procurement and Canadian industry
.
“This is a capability that our CAF needs, that our allies need, it's something that was identified a long time ago here in Canada as a critical capability and, frankly, it has languished until now,” he said.
The federal government's Defense Investment Agency, created by Prime Minister Mark Carney in October, was created to streamline defense procurement processes that have been plagued by long-standing problems such as delays and bureaucratic obstacles.
Last June, Carney announced that Canada would meet a two percent of GDP spending target within the North Atlantic Treaty Organization (NATO) this year and pledged to meet a new defense commitment of five percent by 2035.
Carney also promised to prioritize “Made in Canada” manufacturing and supply chains and stop sending three-quarters of Canada's defense capital spending to America.
“It’s really nice to be able to have announcements like this to demonstrate that all of this discussion and dialogue is actually leading to actionable action,” said MDA Space Executive Director Mike Greenlee. “It shows that we're really changing the relationship between government and industry, we're really doing things differently.”
According to a recent report from the Royal Bank of Canada, the overall effect of increased defense spending has both negative and positive economic consequences.
Positive impacts can occur through the channels of industrial development, innovation and infrastructure. While negative consequences may arise due to capital flight, budget overruns and the risk of diverting resources from more productive sectors of the economy.
Telesat shares were up more than 10 percent at $44.14 in late morning trading in Toronto, while MDA shares were up about six percent at $25.82.
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