Starlink’s Ottawa Breakup Was Filed Years Before the Ambassador Declared It

On October 20, Royal Bank of Canada put a prospectus on the SEC’s books offering the public annual coupons of 11.75 to 12.75 percent on notes tied to SpaceX‘s Class A shares, with the shares able to fall by half before investors lost a dollar of principal. The filing flagged its own risk in plain words — “The Underlier Has a Limited Trading History.” It prices on October 28. That same day, in Gatineau, Quebec, the US ambassador to Canada told the country’s space industry that Ottawa had made “a conscious decision” to move away from SpaceX.

The two documents describe the same divorce and opposite moods. Pete Hoekstra’s line was the soundbite of the week: “I think Elon will probably find other people that he can do business with, and my guess is that he already is.” RBC’s was the trade. The breakup is seven years old. It is expensive.

Ottawa started writing cheques in 2019, with a C$85 million federal investment, and committed up to C$600 million over ten years in 2020 to buy Lightspeed capacity that rural internet providers could resell. The serious money came in September 2024, when Telesat finalized a C$2.14 billion federal loan: floating interest at CORRA plus 4.75 percent, a 15-year maturity, interest payable in-kind during construction followed by a 10-year sculpted amortization, and warrants giving the government 10 percent of the Telesat LEO subsidiary at a US$3 billion equity valuation. Quebec’s C$400 million loan mirrored the terms with 1.87 percent of the warrants. Add the C$2.3 billion Arctic defence contract signed this August — 15 years of military satellite service, two five-year options at roughly C$200 million each — and the federal commitment stands at C$5.525 billion in loans and contracts. All of it Canadian dollars.

A New York fund owns a third of the answer: MHR Fund Management says it and its founder, Mark Rachesky, hold about 36.2 percent of Telesat on a fully exchanged and converted basis, and Rachesky chairs the company’s board. Canada’s PSP Investments, which manages federal public-sector pensions, held about 37 percent when Telesat listed on Nasdaq and the TSX in November 2021. The company’s lineage runs through a stranger history than the sovereignty speeches admit: Telesat began in 1969 as a Crown corporation created by an Act of Parliament, launched the world’s first commercial domestic communications satellite in 1972, was privatized and sold to Bell Canada in 1998, and was bought by Loral Space & Communications and PSP for C$3.25 billion in 2007. The “sovereign” network is a former Crown asset. It was sold twice. Now Ottawa is buying it back.

The Arctic contract’s own release carries the awkward line the coverage keeps quoting: the 69 new satellites — growing Lightspeed from 156 to 225, all built by MDA Space in Montreal — will be “launched by SpaceX on already-secured Falcon 9 rockets,” with one more Falcon 9 pending a final launch agreement. Canadian writer Kevin Boucher, in an essay published this week that none of the coverage has picked up, gives the honest complication its sharpest form: “Why would Canada build what SpaceX already has? Because the people who can build it for you can also turn it down on you. Ask Ukraine.” His answer to the irony charge runs the other way: “But renting a rocket isn’t renting the network. Once those satellites are in orbit, Telesat runs them.”

RBC filed not one SpaceX-linked prospectus in October but two. On October 5 it had filed barrier digital notes tied to the same Class A shares, promising a minimum 20 percent return at maturity if the shares stayed above half their initial value, with a trade date of October 19 and maturity in April 2028. The new notes stretch the bet further — maturity in October 2029, coupons that can be caught up later under a memory feature, auto-callable quarterly once the shares recover their starting price. Two prospectuses, one underlier, one bank, one fortnight — while its government was declaring the divorce.

Three provinces have three different Starlinks. Alberta’s Satellite Rebate Program pays rural households up to C$1,000 toward satellite hardware, and Starlink is currently the only kit that qualifies. Quebec awarded Starlink a contract for remote courthouses this spring, saying it had found no equivalent alternative. Ontario went the other way: in March 2025, Premier Doug Ford’s government cancelled its C$100 million Starlink contract over US tariffs.

SpaceX spent that same week moving into the carriers’ business. Dow Jones reported that the company was in talks to secure 80,000 cell towers and had already secured wireless spectrum; AT&T, Verizon and T-Mobile shares slid while tower owners Crown Castle and American Tower rose. A separate market note put a number on the spectrum: roughly US$8 billion in cash for Grain Management’s nationwide 800 MHz portfolio, pending regulatory approval. The shares RBC is selling yield on closed last week at US$147.49, which prices Space Exploration Technologies Corp. at roughly US$1.89 trillion — between a 52-week range of US$104.83 and US$225.64.

The reason all of this paperwork suddenly mattered is dated October 14, when Ukrainian soldiers noticed their Starlink connections slowing and interceptor drones started losing their links. The Wall Street Journal reported this week that Elon Musk directed the slowdown. Musk says Washington controls Starshield. Ukraine’s defence ministry said Friday the signal loss was still occurring, a day after Donald Trump said service had been restored. Mark Carney, in Istanbul the same day, said the slowdown had “real consequences” and admitted Canada remains “highly, highly reliant” on systems based in other countries. It was the live demonstration of the argument he had made to the New York Times in September: that Starlink dependency could be “turned on and off in a way that was not sovereign to the actors in the conflict.” And of Boucher’s line about the jewel: “When the jewel belongs to one man, the jewel’s policy is that man’s policy.”

SpaceQ’s editor-in-chief, Marc Boucher, put the domestic stakes in his August briefing in one sentence the field never quoted: “the contrast between our ambitions and our logistical realities has never been sharper.” The ambitions are on paper now — C$5.525 billion of it, plus the warrants. The logistics are on paper too, and some of that paper is SpaceX’s. Telesat booked 14 Falcon 9 launches back in 2023, three years before the Arctic contract and the week of speeches.