OTTAWA: 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 narrow the broadband internet gap in rural and remote communities.

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 in an effort 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.

On Wednesday, Bains said Canada has also entered a preliminary contribution 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."

While the agreement isn't finalized, the memorandum of understanding sees the Canadian government commit up to C$600 million over 10 years to help Telesat deliver C$1.2 billion of affordable high-speed internet.

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.