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A Canadian soldier dismantles a drone as a team from the Canadian Navy test thermal imaging drone capabilities in Arctic environments. The new contract is aimed at improving communications for armed forces stationed in the North.COLE BURSTON/AFP/Getty Images

Ottawa’s new defence procurement body has taken its first steps, awarding a contract to two Canadian companies to improve communications for troops stationed in the North.

The roughly $3-million contract awarded to Ottawa-based Telesat TSAT-T and Brampton, Ont.-based MDA Space Ltd. MDA-T is part of a larger procurement, the Enhanced Satellite Communications Project – Polar (ESCP-P), which has a budget of more than $5-billion and is being overseen by the federal government’s newly formed Defence Investment Agency.

Tuesday’s announcement is the first by the agency and an indication of the approach it intends to bring to its work to streamline a traditionally slow-moving government process. The agency is calling this first procurement a “strategic partnership” because it will go beyond facilitating the transaction to integrate the companies’ experience and expertise throughout the delivery of the defence project.

“In collaboration with Canadian industry partners Telesat and MDA Space, the project will deliver robust and secure military satellite communications capabilities that ensure our forces remain connected across vast and remote regions,” Stephen Fuhr, the secretary of state for defence procurement, said in a written statement.

The goal of the ESCP-P is to establish a small constellation of satellites that will provide wideband and narrowband communications over the North. It’s part of Canada’s broader plan to modernize the North American Aerospace Defence Command (NORAD) and is expected to be delivered some time after 2035. Once complete, it will help the Canadian Armed Forces carry out operations under NORAD, as well as surveillance and search and rescue operations.

“The ESCP-P project will significantly enhance our ability to conduct sovereignty operations in the Arctic, supporting the defence of Canada and North America,” Lieutenant-General Jamie Speiser-Blanchet, commander of the Royal Canadian Air Force, said in a written statement.

The project is an example of the federal government beginning to champion Canadian companies in a specific sector, something industry experts have advised it to do to help build a stronger defence industrial base in Canada. In this case, the agency says Tuesday’s announcement solidifies “Telesat’s and MDA Space’s position as Canadian champions” in Arctic military satellite communications.

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To help bridge the gap until the ESCP-P is operational, and complement it once it is, a few smaller Canadian companies are also working to provide Arctic communications solutions to the Armed Forces. For example, Ottawa-based Dominion Dynamics is working on an Arctic sensor network designed to operate like a command-and-control system for remote areas and has already conducted tests with the Canadian Rangers.

When Prime Minister Mark Carney initially announced the Defence Investment Agency in October, he drew ire from some industry members who said its mandate to oversee procurements worth $100-million or more would leave behind small to medium-sized Canadian defence companies. In Tuesday’s announcement, the agency states that Canada’s Industrial and Technological Benefits Policy applies to ESCP-P to ensure that those smaller businesses are brought in on the project.

The ESCP-P is one of eight projects the government recently disclosed would be handled by the agency. Some of the other projects include a new fleet of submarines, Arctic over-the-horizon radar, a fleet of early-warning-and-control surveillance aircraft and in-service support and software upgrades for the CC-130J Hercules transport aircraft.