Ontario's Premier Doug Ford announced on February 3, 2025, the cancellation of a $100 million contract with Elon Musk's SpaceX to deliver high-speed internet to rural areas, attributing the decision to recent U.S. tariffs on Canadian goods. This decision marks the province's assertive response to what Ford termed actions "hellbent on destroying our economy." The original contract, signed in November 2024, aimed to provide Starlink's satellite internet services to approximately 15,000 premises across rural and northern regions of Ontario by June 2025.
"We'll be ripping up the province’s contract with Starlink," Ford stated. He emphasized, "Ontario won't do business with people hellbent on destroying our economy." This decisive action came following U.S. President Donald Trump's imposition of tariffs, including 25% on various imports and 10% on energy, which Ford decries as detrimental to both the Canadian economy and his province.
Ford's announcement was accompanied by his commitment to ban all American companies from provincial contracts until U.S. tariffs are lifted. Highlighting the extensive financial impact, he asserted, "U.S.-based businesses will now lose out on tens of billions of dollars in new revenues. They only have President Trump to blame." The sentiment reflects widespread indignation among Ontario leaders over the sudden shift in trade relations.
The contract with Starlink had been touted as part of Ontario's strategy to bridge the digital divide, offering technology solutions to underserved communities. Yet, some opposition leaders had voiced skepticism prior to the contract's cancellation. Bonnie Crombie, the Ontario Liberal Leader, commented, "But let's be clear: this contract never should have been signed in the first place." Crombie's remarks resonate with many who have criticized the timing and financial commitment associated with the deal.
Similarly, NDP Leader Marit Stiles quipped, "I could never understand why he was willing to pay so much more than a regular connection to Starlink," insinuated concerns over the pricing structure of the arrangement. At a press conference, she articulated her belief the province could secure high-speed internet at lower costs, possibly through Canadian service providers.
The ramifications of this tariff conflict extend beyond the cancellation of the Starlink contract, as Ontario joins other provinces, including Quebec, who are removing U.S. products from state-controlled liquor stores. This is part of collective provincial and federal measures aimed at countering Trump's trade policies. With economists warning of economic downturns due to these tensions, the situation is becoming increasingly precarious.
The U.S. tariffs reportedly affect over 1,200 categories of products, and the Canadian government is preparing retaliatory measures of its own, which could impact $30 billion worth of American goods. The escalation of trade hostilities threatens to impact the Canadian economy significantly, potentially inciting recession-like conditions as the geopolitical climate worsens.
The Starlink deal was initially seen as a leap toward modernizing internet access for those living far from urban infrastructure. Opposition leaders, now invigorated by the cancellation, argue it reveals larger systemic issues within Ford's government. Ford defended the contract's inception, citing a transparent bidding process, yet has now reassured citizens, stating the province has yet to pay any costs related to the contract.
Reflecting on the broader impacts of such government contracts, some analysts are already speculating about the winners and losers of this conflict. The cancellation has led to immediate concerns about the future of internet access initiatives intended to support remote communities reliant on satellite technology.
Ford's government also indicated potential legal concerns with the cancellation, asserting they believe they have valid grounds should issues arise. Still, with Starlink having garnered around 400,000 subscribers across Canada by 2024, analysts project this loss could hinder provincial ambitions to modernize infrastructure for vulnerable populations.
Looking forward, Ontario's decision to withdraw from the Starlink initiative signals serious tensions with the U.S., one of Canada’s most significant trading partners, and raises questions about the future of cross-border collaboration amid economic fallout from tariffs. What remains clear is the road forward will require Ontario to recalibrate its approach to digital connectivity and trade relations.