Ontario Premier Doug Ford has announced significant changes to the province's economic agreements, declaring on February 3, 2025, the cancellation of its $68 million contract with Starlink, the satellite internet service owned by Elon Musk's SpaceX. This drastic measure stems from the recent imposition of tariffs by U.S. President Donald Trump on Canadian goods, which Ford claims threatens Ontario's economy.
Through social media, Ford stated, "We’ll be ripping up the province’s contract with Starlink. Ontario won’t do business with people hellbent on destroying our economy." This decision aligns with Ford's broader strategy to restrict contracts with U.S. firms as retaliation against the trade tariffs announced by the U.S., which he argues will have severe repercussions for businesses north of the border.
The canceled contract was expected to provide high-speed internet access to 15,000 homes and businesses in remote areas across Ontario. Ford emphasized the competitive disadvantage these tariffs create, claiming U.S.-based businesses would now miss out on hundreds of millions of dollars of potential revenue from Ontario's procurement spending, which tallies around CAD 30 billion annually.
When outlining how the tariffs would affect both sides, Ford remarked, "Starting today and until U.S. tariffs are removed, Ontario is banning American companies from provincial contracts." He expressed confidence, asserting, "Canada didn’t start this fight with the US, but you mejor believe we’re ready to win it." His comments reflect the increasingly combative trade climate between Canada and the U.S. as both countries prepare for what could become a prolonged economic conflict.
The tariffs, signed and set to take effect soon, entail 25% levies on virtually all Canadian imports, with exceptions primarily for oil. Ford placed the blame squarely on Trump, asserting his policies and affiliations—particularly his historic support from Musk, who has contributed significantly to Trump's election campaigns—had forced Ontario's hand. Musk's appointment to direct the Department of Government Efficiency, which seeks to streamline government spending, has raised eyebrows, especially under the backdrop of contentious trade relations between the two countries.
News surrounding the tariffs has already impacted market reactions, leading to initial declines on Wall Street following Trump’s announcement. Reports indicated, though, there might be temporary reprieve as conversations between Trump and Mexican President Claudia Sheinbaum led to the postponement of certain tariffs for Mexico.
Ford's actions have been met with support from various sectors within Ontario, many of whom perceive this as necessary protection for their budding economy against aggressive U.S. trade practices. He has consistently claimed the tariffs will initiate significant economic loss for the U.S. as well, highlighting the interconnectedness of the two economies. "US-based businesses will now lose out on tens of billions of dollars in new revenues," Ford pointed out, stressing the repercussions of these tariffs extend beyond Canadian borders.
Prime Minister Justin Trudeau has also responded forcefully, denouncing Trump's tariffs as "a threat targeting the entire country." He warned of negative impacts not just for Canadians but also for American workers. Trudeau stated, "This is a choice...will harm Canadians, but beyond there will be real consequences for you, the American people." His administration indicated plans to impose retaliatory tariffs affecting approximately CAD 155 billion worth of U.S.-made goods, targeting popular items such as beverages, clothing, and electronics.
Despite the hostile environment, there is uncertainty about potential negotiations and possible resolutions. Trudeau acknowledged the complex ramifications of the U.S. tariffs, indicating it would not only disrupt Canadian markets but also raise costs for American consumers and impact jobs across the U.S. manufacturing sector.
The recent escalation signifies just how fragile the trade relationship between Canada and the U.S. has become. The announcement from Ontario highlights increasing tensions as both governments stand firm on their positions, unwilling to back down amid intensifying economic pressures.
For now, Ontario’s actions against Starlink exemplify the province’s commitment to protect its economic interests. Only time will tell if these countermeasures bring about any change to U.S. trade policies or contribute to long-term setbacks for businesses on both sides of the border.