Exhibit 99.1

TELESAT CANADA

Quarterly Report

For the Three and Nine Month Periods Ended September 30, 2021

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Reserved	43
Item 5.	Other Information	43
Item 6.	Exhibits	43

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Telesat Canada
Unaudited Interim Condensed Consolidated Statements of (Loss) Income
For the periods ended September 30

	Notes	Three months						Nine months
(in thousands of Canadian dollars)	Notes	2021			2020			2021			2020
Revenue	5	$	192,335		$	202,053		$	570,715		$	618,560
Operating expenses	6		(49,691	)		(42,185	)		(146,921	)		(133,712	)
Depreciation			(50,663	)		(55,597	)		(153,402	)		(166,819	)
Amortization			(3,988	)		(4,289	)		(12,051	)		(12,906	)
Other operating losses, net			(30	)		(34	)		(777	)		(246	)
Operating income			87,963			99,948			257,564			304,877
Interest expense	7		(50,691	)		(50,116	)		(139,153	)		(155,917	)
Interest and other income			1,013			875			2,786			6,667
Gain (loss) on changes in fair value of financial instruments			971			5,715			(20,357	)		(38,884	)
(Loss) gain on foreign exchange			(68,411	)		66,334			7,343			(99,088	)
(Loss) income before tax			(29,155	)		122,756			108,183			17,655
Tax expense	8		(12,764	)		(15,736	)		(47,591	)		(27,100	)
Net (loss) income		$	(41,919	)	$	107,020		$	60,592		$	(9,445	)

See accompanying notes to the unaudited interim condensed consolidated financial statements

Telesat Canada
Unaudited Interim Condensed Consolidated Statements of Comprehensive (Loss) Income
For the periods ended September 30

	Three months						Nine months
(in thousands of Canadian dollars)	2021			2020			2021			2020
Net (loss) income	$	(41,919	)	$	107,020		$	60,592		$	(9,445	)
Other comprehensive income (loss)
Items that may be reclassified into profit or loss
Foreign currency translation adjustments		29,235			(26,745	)		(1,816	)		24,181
Other comprehensive income (loss)		29,235			(26,745	)		(1,816	)		24,181
Total comprehensive (loss) income	$	(12,684	)	$	80,275		$	58,776		$	14,736

See accompanying notes to the unaudited interim condensed consolidated financial statements

Telesat Canada
Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity

(in thousands of Canadian dollars)	Common shares		Preferred shares		Total share capital		Accumulated earnings			Equity- settled employee benefits reserve			Foreign currency translation reserve			Total reserves			Total shareholders’ equity
Balance as at January 1, 2020	$	26,580	$	128,315	$	154,895	$	1,031,055		$	74,877		$	(15,502	)	$	59,375		$	1,245,325
Net loss		—		—		—		(9,445	)		—			—			—			(9,445	)
Other comprehensive income, net of tax of $nil		—		—		—		—			—			24,181			24,181			24,181
Share-based compensation		—		—		—		—			7,160			—			7,160			7,160
Balance as at September 30, 2020	$	26,580	$	128,315	$	154,895	$	1,021,610		$	82,037		$	8,679		$	90,716		$	1,267,221

Balance as at September 1, 2020	$	26,580	$	128,315	$	154,895	$	1,021,610		$	82,037		$	8,679		$	90,716		$	1,267,221
Net income		—		—		—		255,023			—			—			—			255,023
Issuance of share capital on settlement of restricted share units		—		803		803		—			(1,729	)		—			(1,729	)		(926	)
Other comprehensive loss, net of tax recovery of $3,584		—		—		—		(10,109	)		—			(56,603	)		(56,603	)		(66,712	)
Share-based compensation		—		—		—		—			5,340			—			5,340			5,340
Dividends declared on Director Voting Preferred Shares		—		—		—		(10	)		—			—			—			(10	)
Balance as at December 31, 2020	$	26,580	$	129,118	$	155,698	$	1,266,514		$	85,648		$	(47,924	)	$	37,724		$	1,459,936

Balance as at January 1, 2021	$	26,580	$	129,118	$	155,698	$	1,266,514		$	85,648		$	(47,924	)	$	37,724		$	1,459,936
Net income		—		—		—		60,592			—			—			—			60,592
Issuance of share capital on exercise of stock options		—		16		16		—			—			—			—			16
Other comprehensive loss, net of tax of $nil		—		—		—		—			—			(1,816	)		(1,816	)		(1,816	)
Share-based compensation		—		—		—		—			33,758			—			33,758			33,758
Balance as at September 30, 2021	$	26,580	$	129,134	$	155,714	$	1,327,106		$	119,406		$	(49,740	)	$	69,666		$	1,552,486

See accompanying notes to the unaudited interim condensed consolidated financial statements

Telesat Canada
Unaudited Interim Condensed Consolidated Balance Sheets

(in thousands of Canadian dollars)	Notes	September 30, 2021		December 31, 2020
Assets
Cash and cash equivalents		$	1,558,638	$	818,378
Trade and other receivables			55,985		51,928
Other current financial assets			474		448
Prepaid expenses and other current assets			38,103		22,861
Total current assets			1,653,200		893,615
Satellites, property and other equipment	5, 9		1,286,390		1,318,526
Deferred tax assets			62,523		79,912
Other long-term financial assets			16,918		53,425
Other long-term assets	5		13,410		9,922
Intangible assets	5		766,031		779,190
Goodwill			2,446,603		2,446,603
Total assets		$	6,245,075	$	5,581,193

Liabilities
Trade and other payables		$	33,508	$	30,091
Other current financial liabilities			63,433		35,880
Other current liabilities			91,294		96,155
Total current liabilities			188,235		162,126
Long-term indebtedness	11		3,805,313		3,187,152
Deferred tax liabilities			290,282		325,893
Other long-term financial liabilities			25,172		35,499
Other long-term liabilities			383,587		410,587
Total liabilities			4,692,589		4,121,257

Shareholders’ Equity
Share capital	12		155,714		155,698
Accumulated earnings			1,327,106		1,266,514
Reserves			69,666		37,724
Total shareholders’ equity			1,552,486		1,459,936
Total liabilities and shareholders’ equity		$	6,245,075	$	5,581,193

See accompanying notes to the unaudited interim condensed consolidated financial statements

Telesat Canada
Unaudited Interim Condensed Consolidated Statements of Cash Flows
For the nine months ended September 30

(in thousands of Canadian dollars)	Notes	2021			2020
Cash flows generated from operating activities
Net income (loss)		$	60,592		$	(9,445	)
Adjustments to reconcile net income (loss) to cash flows generated from operating activities
Depreciation			153,402			166,819
Amortization			12,051			12,906
Tax expense			47,591			27,100
Interest expense			139,153			155,917
Interest income			(3,197	)		(6,761	)
(Gain) loss on foreign exchange			(7,343	)		99,088
Loss on changes in fair value of financial instruments			20,357			38,884
Share-based compensation			33,758			7,160
Loss on disposal of assets			777			246
Other			(45,397	)		(45,474	)
Income taxes paid, net of income taxes received	17		(71,644	)		(35,221	)
Interest paid, net of interest received	17		(87,213	)		(120,576	)
Operating assets and liabilities	17		(2,753	)		9,046
Net cash generated from operating activities			250,134			299,689

Cash flows used in investing activities
Purchases for satellite programs			(97,131	)		(64,810	)
Purchase of property and other equipment			(27,202	)		(13,235	)
Purchase of intangible assets			—			(30	)
Net cash used in investing activities			(124,333	)		(78,075	)

Cash flows generated from (used in) financing activities
Proceeds from indebtedness	17		619,900			—
Repayment of indebtedness	17		—			(19,197	)
Payment of debt issue costs	17		(6,834	)		—
Payments of principal on lease liabilities	17		(1,780	)		(1,215	)
Satellite performance incentive payments	17		(5,092	)		(6,877	)
Proceeds from exercise of stock options			16			—
Government grant received			—			6,120
Net cash generated from (used in) financing activities			606,210			(21,169	)

Effect of changes in exchange rates on cash and cash equivalents			8,249			14,648

Increase in cash and cash equivalents			740,260			215,093
Cash and cash equivalents, beginning of period			818,378			1,027,222
Cash and cash equivalents, end of period		$	1,558,638		$	1,242,315

See accompanying notes to the unaudited interim condensed consolidated financial statements

Telesat Canada
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
September 30, 2021
(all amounts in thousands of Canadian dollars, except where otherwise noted)

1. BACKGROUND OF THE COMPANY

Telesat Canada (the “Company” or “Telesat”) is a Canadian corporation. Telesat is a global satellite operator, providing mission-critical communications solutions to support the requirements of sophisticated satellite users throughout the world. Headquartered in Ottawa, Canada, the Company’s state-of-the-art fleet consists of 15 geostationary satellites and the Canadian payload on ViaSat-1.

The Company has commenced the development of a constellation of low earth orbit (“LEO”) satellites and integrated terrestrial infrastructure, called “Telesat Lightspeed”. In January 2018, the first LEO satellite was successfully launched into orbit. This Phase 1 LEO satellite has demonstrated certain key features of the Telesat Lightspeed system design, specifically the capability of the satellite and customer terminals to deliver a low latency broadband experience.

As at September 30, 2021, Loral Space and Communications Inc. (“Loral”) and Canada’s Public Sector Pension Investment Board (“PSP Investments”) indirectly held economic interests in Telesat of approximately 63% and 36%, respectively, with the remaining economic interest held by various individuals. Loral indirectly held a voting interest of 33% on all matters including the election of directors. PSP Investments indirectly held a voting interest of 67% on all matters except for the election of directors, and a 29% voting interest for the election of directors. The remaining voting interest of 38% for the election of directors is held by shareholders of the Company’s Director Voting Preferred Shares.

Unless the context states or requires otherwise, references herein to the “financial statements” or similar terms refer to the unaudited interim condensed consolidated financial statements of Telesat Canada.

On November 4, 2021, these financial statements were approved by the Audit Committee of the Board of Directors and authorized for issue.

2. BASIS OF PRESENTATION

Statement of Compliance

The financial statements represent the interim financial statements of the Company and its subsidiaries, on a consolidated basis, prepared in accordance with International Accounting Standard 34, Interim Financial Reporting (“IAS 34”).

The financial statements should be read in conjunction with the December 31, 2020 consolidated financial statements of Telesat Canada. The financial statements use the same basis of presentation and significant accounting policies as outlined in Notes 2 and 3 of the consolidated financial statements for the year ended December 31, 2020. The results of operations for the three and nine months ended September 30, 2021 and 2020 are not necessarily indicative of the results that may be expected for a full fiscal year.

Basis of Consolidation

Subsidiaries

These consolidated financial statements include the results of the Company and subsidiaries controlled by the Company. Control is achieved when the Company has power over an entity, has exposure, or rights to variable returns from its involvement with an entity, and has the ability to use the power over an entity to affect the amount of its return.

Telesat Canada
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
September 30, 2021
(all amounts in thousands of Canadian dollars, except where otherwise noted)

2. BASIS OF PRESENTATION (cont.)

Joint arrangements

A joint operation is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to their share of the assets and revenue, and obligations for the liabilities and expenses, relating to the arrangement.

The Company’s consolidated financial statements include the Company’s share of the assets, liabilities, revenue and expenses of its interest in joint operations.

3. CHANGES IN ACCOUNTING POLICIES

Interest rate benchmark reform — Phase 2

The Company has adopted Interest rate benchmark reform — Phase 2 (Amendments to IFRS 9, Financial Instruments, IAS 39, Financial Instruments: Recognition and Measurement, IFRS 7, Financial Instruments: Disclosure, IFRS 4, Insurance Contracts and IFRS 16, Leases). The amendments enable entities to reflect the effects of transitioning from benchmark interest rates, such as inter-bank offered rates (“IBOR”) to alternative benchmark interest rates. As a result of the Phase 2 amendments relief, changes to contractual cash flows as a direct consequence of IBOR reform will not result in an immediate gain or loss in the statement of income.

Interest rates on certain indebtedness of the Company are determined by reference to benchmark rates. Similarly, benchmark rates are used in the calculation of the fair value of certain financial assets and liabilities. As none of the benchmark interest rates used by the Company have yet been transitioned to an alternative benchmark rate, there is no impact on its financial statements.

The Company has determined that the largest impact of the alternative benchmark rates will be relating to the Term Loan B Facility and the interest rate swaps.

The risks identified are not expected to cause any major changes in the Company’s risk management strategy.

4. SIGNIFICANT ACCOUNTING POLICIES

Future Changes in Accounting Policies

Amendments to IAS 1 and IFRS Practice Statement 2

In February 2021, the International Accounting Standards Board (“IASB”) issued amendments to IAS 1, Presentation of Financial Statements in which it provides guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments require entities to disclose their material accounting policies rather than their significant accounting policies.

The amendments clarify that accounting policy information is material if users of an entity’s financial statements would need it to understand other material information in the financial statements and that accounting policy information may be material because of its nature, even if the related amounts are immaterial. On the other hand, although a transaction, other event or condition to which the accounting policy information relates may be material, it does not necessarily mean that the corresponding accounting policy information is material to the entity’s financial statements.

The amendments are applied prospectively and are effective for annual periods beginning on or after January 1, 2023 with earlier application permitted.

The changes will only impact the level of disclosures within the Company’s financial statements.

Telesat Canada
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
September 30, 2021
(all amounts in thousands of Canadian dollars, except where otherwise noted)

4. SIGNIFICANT ACCOUNTING POLICIES (cont.)

The Company is currently evaluating the impact of the amendment.

Amendments to IAS 12

In May 2021, the IASB issued amendments to IAS 12, Income Taxes.

In specified circumstances, companies are exempt from recognizing deferred tax when they recognize assets or liabilities for the first time. The amendments clarify that such initial recognition exemption does not apply to transactions in which equal amounts of deductible and taxable temporary differences arise on initial recognition. Accordingly, entities are required to recognize deferred tax associated with transactions, such as leases and decommissioning obligations, which give rise to equal and offsetting temporary differences.

The amendments are effective for annual reporting periods beginning on or after January 1, 2023 with early adoption permitted.

There will be no impact on its consolidated financial statements as a result of the amendments.

There are no other new and amended standards determined to be applicable to Telesat.

5. SEGMENT INFORMATION

Telesat operates in a single operating segment, in which it provides satellite-based services to its broadcast, enterprise and consulting customers around the world.

The Company derives revenue from the following services:

• Broadcast — Direct-to-home television, video distribution and contribution, and occasional use services.

• Enterprise — Telecommunication carrier and integrator, government, consumer broadband, resource, maritime and aeronautical, retail and satellite operator services.

• Consulting and other — Consulting services related to space and earth segments, government studies, satellite control services, and research and development.

Revenue derived from the above services were as follows:

	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Broadcast	$	97,408	$	103,221	$	293,229	$	309,773
Enterprise		91,126		93,487		267,675		293,634
Consulting and other		3,801		5,345		9,811		15,153
Revenue	$	192,335	$	202,053	$	570,715	$	618,560

Equipment sales included within the various services were as follows:

	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Broadcast	$	52	$	704	$	67	$	704
Enterprise		1,337		668		8,552		7,775
Total equipment sales	$	1,389	$	1,372	$	8,619	$	8,479

Telesat Canada
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
September 30, 2021
(all amounts in thousands of Canadian dollars, except where otherwise noted)

5. SEGMENT INFORMATION (cont.)

Geographic Information

Revenue by geographic regions was based on the point of origin of the revenue, which was the destination of the billing invoice, and was allocated as follows:

	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Canada	$	78,589	$	89,625	$	249,032	$	270,062
United States		77,856		76,767		217,277		233,543
Latin America & Caribbean		13,242		15,006		41,921		49,236
Europe, Middle East & Africa		14,279		10,522		32,823		34,284
Asia & Australia		8,369		10,133		29,662		31,435
Revenue	$	192,335	$	202,053	$	570,715	$	618,560

For disclosure purposes, the satellites, and the intangible assets have been classified based on ownership. Satellites, property and other equipment, and intangible assets by geographic regions were allocated as follows:

As at,	September 30, 2021		December 31, 2020
Canada	$	651,269	$	624,303
Europe, Middle East & Africa		576,195		619,959
United States		56,356		71,659
All others		2,570		2,605
Satellites, property and other equipment	$	1,286,390	$	1,318,526

As at,	September 30, 2021		December 31, 2020
Canada	$	708,440	$	718,880
United States		6,111		38,448
Latin America & Caribbean		38,204		15,114
All others		13,276		6,748
Intangible assets	$	766,031	$	779,190

Other long-term assets by geographic regions were allocated as follows:

As at,	September 30, 2021		December 31, 2020
Canada	$	13,090	$	9,470
Europe, Middle East & Africa		320		452
Other long-term assets	$	13,410	$	9,922

Goodwill was not allocated to geographic regions.

Major Customers

For the three and nine months ended September 30, 2021 and 2020, there were two significant customers each representing more than 10% of consolidated revenue.

Telesat Canada
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
September 30, 2021
(all amounts in thousands of Canadian dollars, except where otherwise noted)

6. OPERATING EXPENSES

	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Compensation and employee benefits(a)	$	28,421	$	20,520	$	88,699	$	63,983
Other operating expenses(b)		13,766		14,674		36,034		47,032
Cost of sales(c)		7,504		6,991		22,188		22,697
Operating expenses	$	49,691	$	42,185	$	146,921	$	133,712

____________

(a) Compensation and employee benefits included salaries, bonuses, commissions, post-employment benefits and charges arising from share-based compensation.

(b) Other operating expenses included general and administrative expenses, marketing expenses, in-orbit insurance expenses, professional fees and facility costs. The balance for the three and nine months ended September 30, 2021 included $0.2 million and $1.7 million, respectively (three and nine months ended September 30, 2020 - $0.4 million and $1.4 million, respectively), of leases not capitalized due to exemptions and variable lease payments not included in the measurement of lease liabilities.

(c) Cost of sales included the cost of third-party satellite capacity, the cost of equipment sales and other costs directly attributable to fulfilling the Company’s obligations under customer contracts.

7. INTEREST EXPENSE

	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Interest on indebtedness	$	41,179	$	37,777	$	110,356	$	127,004
Interest on derivative instruments		3,587		5,498		10,627		7,841
Interest on satellite performance incentive payments		557		714		1,719		2,262
Interest on significant financing component		4,669		5,544		14,348		17,022
Interest on employee benefit plans		323		260		971		781
Interest on leases		376		323		1,132		1,007
Interest expense	$	50,691	$	50,116	$	139,153	$	155,917

8. INCOME TAXES

	Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020
Current tax expense	$	23,253		$	23,354		$	64,906		$	51,612
Deferred tax recovery		(10,489	)		(7,618	)		(17,315	)		(24,512	)
Tax expense	$	12,764		$	15,736		$	47,591		$	27,100

Telesat Canada
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
September 30, 2021
(all amounts in thousands of Canadian dollars, except where otherwise noted)

8. INCOME TAXES (cont.)

A reconciliation of the statutory income tax rate, which is a composite of Canadian federal and provincial rates, to the effective income tax rate was as follows:

	Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020
(Loss) income before tax	$	(29,155	)	$	122,756		$	108,183		$	17,655
Multiplied by the statutory income tax rates		26.46	%		26.49	%		26.46	%		26.49	%
		(7,714	)		32,518			28,625			4,677
Income tax recorded at rates different from the Canadian tax rate		(2,087	)		(3,221	)		(35,904	)		(10,591	)
Permanent differences		14,150			(6,763	)		19,960			18,018
Effect on deferred tax balances due to the change in income tax rates		—			—			—			(1,155	)
Effect of temporary differences not recognized as deferred tax assets		10,538			(6,297	)		40,057			15,654
Change in estimates related to prior period		29			—			(2,090	)		—
Other		(2,152	)		(501	)		(3,057	)		497
Tax expense	$	12,764		$	15,736		$	47,591		$	27,100
Effective income tax rate		(43.78	)%		12.82	%		43.99	%		153.50	%

9. SATELLITES, PROPERTY AND OTHER EQUIPMENT

For the nine months ended September 30, 2021, the Company had additions of $124.0 million (September 30, 2020 — $82.2 million) primarily related to acquisitions associated with the LEO program.

10. LEASE LIABILITIES

The expected undiscounted contractual cash flows of the lease liabilities as at September 30, 2021 were as follows:

Remaining 2021			2022			2023			2024			2025			Thereafter			Total
$	822		$	3,331		$	3,273		$	3,130		$	2,854		$	35,650		$	49,060

The undiscounted contractual cash flows included $15.4 million of interest payments.

In addition, there were certain leases which were signed but not capitalized as at September 30, 2021. Based upon the assessed lease term, the expected undiscounted cash flows totaled $3.5 million.

Telesat Canada
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
September 30, 2021
(all amounts in thousands of Canadian dollars, except where otherwise noted)

11. INDEBTEDNESS

	September 30, 2021			December 31, 2020
Senior Secured Credit Facilities
Revolving Credit Facility	$	—		$	—
Term Loan B – U.S. Facility (September 30, 2021 and December 31, 2020 – US$1,552,815)		1,968,969			1,975,957
6.5% Senior Notes (US$550,000)		697,400			699,875
5.625% Senior Secured Notes (US$500,000)		634,000			—
4.875% Senior Secured Notes (US$400,000)		507,200			509,000
		3,807,569			3,184,832
Deferred financing costs, prepayment options and loss on repayment		(2,256	)		2,320
		3,805,313			3,187,152
Less: current indebtedness		—			—
Long-term indebtedness	$	3,805,313		$	3,187,152

On April 27, 2021, Telesat Canada, as issuer, and Telesat LLC, as co-issuer (together with Telesat Canada, the “Co-Issuers”), issued US$500 million in aggregate principal amount of 5.625% Senior Secured Notes maturing on December 6, 2026 (the “5.625% Senior Secured Notes”). Debt issue costs of $6.8 million were incurred in connection with the issuance of the 5.625% Senior Secured Notes.

The 5.625% Senior Secured Notes bear interest from the issue date, payable on June 1 and December 1 of each year, commencing on December 1, 2021, to holders of record on the immediately preceding May 15 or November 15, as the case may be.

The indenture governing the 5.625% Senior Secured Notes includes covenants and terms that restrict Telesat Canada’s ability to, among other things, incur additional indebtedness, incur liens, pay dividends or make certain other restricted payments, investments or acquisitions, enter into certain transactions with affiliates, modify or cancel its satellite insurance, effect mergers with another entity, and redeem the 5.625% Senior Secured Notes, without penalty, before December 6, 2022, in each case subject to exceptions provided in such indenture. The prepayment options associated with the 5.625% Senior Secured Notes (Note 15) were fair valued at the time of debt issuance. The initial fair value impact, as at April 27, 2021, of the prepayment option related to the 5.625% Senior Secured Notes was a $1.9 million increase to the indebtedness. This liability is subsequently amortized using the effective interest method.

12. SHARE CAPITAL

The number of shares and stated value of the outstanding shares were as follows:

September 30,
2021

Telesat Canada 6-K