TORONTO -- The leader of Canada's most populous province of Ontario announced on Monday the cancellation of its contract with Elon Musk's Starlink internet services, citing U.S. President Donald Trump's sweeping tariffs on Canadian goods as the motivating factor behind this decision.
Ontario Premier Doug Ford declared the $100-million Canadian (approximately US$68 million) contract, initially inked to provide high-speed internet to remote and northern residents, no longer viable. "We'll be ripping up the province's contract with Starlink. Ontario won't do business with people hellbent on destroying our economy," tweeted Ford, expressing his firm stance on the issue.
This contract was expected to bring Starlink's satellite internet service to about 15,000 homes and businesses by June 2025, focusing on underserved areas. It represented the Ontario government’s commitment to improving digital access for rural communities but was overshadowed by rising tensions with the United States.
Responding to Trump's executive order which imposed hefty tariffs on various Canadian imports, Ford stated, "U.S.-based businesses will now lose out on tens of billions of dollars in new revenues due to our response to these tariffs. They only have President Trump to blame." He also announced the temporary ban on American companies from receiving provincial contracts until the tariffs are lifted, effective immediately.
Ford's economic stance suggests broader retaliatory measures against U.S. businesses, reflecting sentiments echoed among Canadian leaders who have rallied against what they view as unwarranted aggressive trade policies from their southern neighbor. “Canada didn’t start this fight with the U.S.,” he asserted, “but you can believe we’re ready to win it.”
The Ontario government’s procurement spending amounts to approximately $30 billion annually, indicating the significant financial impact of these new restrictions. The Premier underscored the gravity of the situation, stressing the need for solidarity among Canadian businesses and the public.
Ford's announcement followed the implementation of tariffs by Trump, which included 25% levies on most imports from Canada and higher duties on energy products starting February 4, 2025. This trade move has prompted various provinces to implement countermeasures, such as the removal of American liquor brands from store shelves.
Indeed, the Liquor Control Board of Ontario sells nearly $1 billion worth of American wine, beer, spirits, and hard seltzers each year, making it clear how the tariff situation could affect Canadian consumers. Ford has indicated government stores are already gearing up to phase out these products amid the trade conflicts.
Critics of the Starlink contract, including Ontario Liberal Leader Bonnie Crombie and NDP Leader Marit Stiles, have applauded Ford’s decision but argued it should have been concluded long before. Crombie expressed relief but stated, "This contract never should have been signed in the first place. Just another backtrack by Doug on his backward priorities." Stiles, meanwhile, raised questions about the high cost associated with the Starlink deal and suggested the possibility of securing more favorable terms with Canadian providers.
Historically, tariffs have ignited trade wars, contributing to economic turmoil. Experts caution the ramifications of continued retaliatory policies could lead Canada toward its most severe economic downturn since the COVID-19 pandemic. Federal and provincial leaders alike are closely monitoring developments and rallying for comprehensive strategies to mitigate potential fallout.
Premier Ford has not ruled out other measures, including curbing energy exports to the U.S., highlighting the reality of Ontario's economic interconnectedness with its neighbor. “We’re prepared to leverage all instruments at our disposal, but hopefully, we won’t have to resort to those,” he remarked, addressing concerns of possible ramifications on energy traders and consumers.
The situation is fluid, with business leaders from both nations advocating for dialogue rather than increased tariffs. The overarching goal remains to find common ground without significant disruption to their trading relationship.
Both Ford and Canadian government officials are urging residents and businesses to remain vigilant and support local economies as they navigate the complex web of international trade. Amidst the waves of uncertainty, the Ontario government's decision to terminate the Starlink contract sends a clear message of its commitment to protect the province’s economic interests and resilience in the face of adversity.