Ontario Cancels Starlink Deal, Bars US Firms From Government Contracts

(Bloomberg) -- Ontario’s premier said his government is ending its contract with Starlink, the Elon Musk-controlled satellite company, following US President Donald Trump’s executive order to impose tariffs on goods imported from Canada. 

“We’ll be ripping up the province’s contract with Starlink. Ontario won’t do business with people hellbent on destroying our economy,” Premier Doug Ford said in an emailed statement.

The government also will ban US companies from provincial contracts until the tariffs are removed, and Ford urged cities and other local governments to do the same at an event in Toronto Monday morning.

Ontario, Canada’s most populous province, said in November it had signed Starlink to launch a program offering high-speed satellite internet access to rural and remote communities, beginning in June 2025. The Starlink deal was worth nearly C$100 million ($68.3 million), with the province to pay for installation and equipment fees, a member of Ford’s government said at the time.

Ford told reporters he believed Ontario would prevail in any court challenge about the contract because the US violated the terms of the North American trade deal when Trump announced the tariffs. 

“I don’t care if there’s a fine or whatever, but I think we’re going to win it,” Ford said of any potential challenge. 

“Oh well,” Musk posted on social media site X in response to the news. 

Ford’s move follows other retaliatory measures taken by Canadian leaders after Trump launched a trade broadside against Canada, Mexico and China on Saturday, putting tariffs on their goods. The president’s order places 25% levies on almost everything the US imports from Canada, except energy, for which the tariff is 10%, starting Tuesday. 

Trump said Monday the tariffs against Mexico will be delayed by a month after he spoke with Mexican President Claudia Sheinbaum. 

Several provinces, including Ontario and Quebec, are removing US products from liquor stores they control. Quebec will begin adding a 25% levy on all US bids for its public contracts, the province’s economy minister, Christine Frechette, told Radio-Canada.

Energy Trade

In Ottawa, government staff gave more details Sunday on how Canada will bring in 25% counter-tariffs against more than 1,200 categories of US products within days.

The first phase will touch about C$30 billion of goods from US exporters, including orange juice, peanut butter, wine, coffee, motorcycles and cosmetics. A much larger list of US-manufactured products — cars and trucks, steel, aluminum, beef and boats, among other items — will be subject to tariffs later in February after a 21-day consultation period. 

Ford reiterated Monday that curbing energy exports to the US remains a “tool in our toolbox” but that he hoped it would be unnecessary. The electricity sector in Canada is managed by the provinces and some of them, including Ontario, export power to the US.  

Private companies have also begun feeling the effects of the tariff war. Irving Oil Ltd., a refiner based in the eastern Canadian province of New Brunswick, is notifying some customers in New Hampshire that the cost of the tariffs will be added to their propane prices once they go into effect, Bloomberg reported.

If the trade war continues, Canada is likely to face the most severe economic shock since the Covid-19 pandemic and will probably sink into a recession, top economists say.

(Updates with comment from Elon Musk in the seventh paragraph.)

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