Elon Musk-owned SpaceX has swooped in to deny Canadarm manufacturer MDA Space a $1.8 billion CAD contract with American telecom EchoStar.
Brampton-based MDA signed on as the prime contractor for EchoStar’s new low-earth-orbit (LEO) direct-to-device (D2D) satellite constellation last month. The contract included the design, manufacturing, and testing of over 100 of MDA’s D2D satellites, with the potential to increase the value up to $3.5 billion CAD with contract options.
Now, EchoStar has terminated the contract. The company made the move because of a “sudden change” to its business strategy, according to MDA. The pivot comes as EchoStar is selling its wireless spectrum licenses to SpaceX for approximately $17 billion USD in stock and cash.
According to reporting from The Verge, the sale is expected to resolve a United States (US) Federal Communications Commission (FCC) probe into EchoStar after SpaceX complained the company “barely uses” its spectrum for satellite connectivity.. SpaceX will now use EchoStar to provide the D2D services MDA Space thought it would supply a month ago.
“This arbitrary development is completely unrelated to MDA Space performance and our products and services.”
MDA Space statement
“This arbitrary development is completely unrelated to MDA Space performance and our products and services,” MDA claimed in a statement. “The company will be compensated for all related termination costs and fees as per the EchoStar contract.”
MDA said that it will continue executing on its $4.6-billion backlog of communication constellations in the meantime. The EchoStar contract’s termination costs and fees were not disclosed. An MDA spokesperson told BetaKit in an email that the details are being worked through, and that “it’s premature to provide details.”
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MDA’s stock price on the Toronto Stock Exchange dropped by 20 percent after the contract termination, wiping out the gains it made after signing the contract. The company’s stock price was around $44 per share at market close on Friday, and had dropped to $35 per share as of Monday at noon. MDA was trading around $38.80 per share before it signed the EchoStar contract.
Earlier this year, the Canadian Space Agency (CSA) selected MDA to lead preparatory studies on a new, all-Canadian lunar rover, alongside two other Canadian space tech companies. The CSA said the $14.6-million investment brings the organization closer to having its own astronaut living and working on the moon.
This is the second time SpaceX has been involved in a contract termination in Ontario this year. Premier Doug Ford cancelled the province’s $100-million contract with satellite internet company Starlink, a subsidiary of Musk’s SpaceX, due to its owner’s ties with US President Donald Trump.
Feature image courtesy SpaceX via Unsplash.
UPDATE (09/09/2025): This story has been updated with commentary from an MDA spokesperson.