Ontario Cancels $100M Starlink Contract Amid U.S. Tariffs on Canadian Goods

Ontario Premier Doug Ford has announced the cancellation of a $100 million contract with Elon Musk’s Starlink, citing the new U.S. tariffs on Canadian goods. The provincial government will also ban contracts with American companies until the tariffs are lifted.

The Starlink contract, signed in November 2024, aimed to provide high-speed internet access to 15,000 rural, remote, and northern homes and businesses by June 2025. However, Ford now says Ontario will not engage with businesses harming the province’s economy.

Ford’s Stance on U.S. Tariffs

On Saturday, February 1, 2025, U.S. President Donald Trump signed an executive order imposing a 25% tariff on nearly all Canadian goods. Additionally, a 10% tariff was placed on Canadian oil, natural gas, and electricity.

In response, Prime Minister Justin Trudeau has confirmed that Canada will introduce its own tariffs, including a 25% tax on U.S. products such as alcohol and fruit.

Ford condemned Trump’s move, stating, “Ontario won’t do business with people hellbent on destroying our economy.” He added that U.S. companies stand to lose billions in provincial contracts due to the policy shift.

How the Ban Affects American Companies

Ontario spends $20 billion annually on government contracts, a significant portion of which has historically gone to U.S.-based businesses. Ford’s decision to block American firms from provincial procurement will impact industries supplying goods and services to the province.

Ford also warned that inflation and interest rates could rise in both Canada and the U.S. until a resolution is reached. He estimates that Ontario could lose 500,000 jobs due to the tariffs if they remain in place.

Musk’s Connection to Trump’s Administration

Elon Musk’s SpaceX-owned Starlink was selected for the Ontario rural broadband project after a bidding process against Canadian provider Xplore Inc.. According to a 2024 report by the Global Media and Internet Concentration Project, Starlink surpassed Xplornet as Canada’s top satellite internet provider in 2022 and currently serves 400,000 Canadian subscribers.

Musk, now serving as the head of the U.S. Department of Government Efficiency (DOGE) under Trump, has yet to respond publicly to Ontario’s decision.

Political Reactions in Ontario

*Photo via Justin Tang/The Canadian Press, via Associated Press*

Ford had previously defended the Starlink contract, saying it followed a transparent bidding process and was part of a broader plan to expand high-speed internet across Ontario. However, Ontario Liberal Leader Bonnie Crombie criticized the deal, calling it a “sweetheart contract with Elon Musk” and demanding its cancellation.

Crombie has since welcomed Ford’s reversal, stating that Ontario must stand firm against Trump’s trade policies.

Next Steps in the Trade Dispute

The trade tensions between Canada and the U.S. are escalating, with Trump and Trudeau expected to hold talks on the tariffs. Meanwhile, Ford continues to press for stronger economic protections for Ontario, urging Washington to reconsider its stance.

For now, Ontario businesses and consumers face uncertainty, as the province shifts away from U.S. partnerships in response to the economic fallout.

More…