Ontario to Scrap $100M Starlink Deal in Response to U.S. Tariff Threat

Ontario to Scrap $100M Starlink Deal in Response to U.S. Tariff Threat

Ontario Premier Doug Ford has announced that the province is pausing its retaliatory measures against the United States, following a last-minute postponement of U.S. tariffs that were set to take effect on February 4.

Ford’s announcement comes after Prime Minister Justin Trudeau confirmed that the U.S. has agreed to delay tariffs for at least 30 days, allowing more time for negotiations.

“We have some good news today,” Ford wrote on X (formerly Twitter). “We have temporarily averted tariffs that would have severely damaged our economy, giving time for more negotiation and time for cooler heads to prevail.”

With the U.S. pressing the pause button on tariffs, Ontario will also pause its planned measures, which included:

  • Removing U.S. alcohol from LCBO shelves
  • Blocking U.S. companies from provincial procurement
  • Scrapping a $100M deal with Elon Musk’s Starlink for satellite internet service

However, Ford warned that these measures could be immediately reinstated if the tariffs go ahead in the future.

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Canada’s Response: A 30-Day Window for Negotiations

The delay in U.S. tariffs follows a deal struck by Trudeau and U.S. President Donald Trump, in which Canada agreed to several new measures to combat illegal migration and fentanyl trafficking.

These measures include:

  • Appointing a “Fentanyl Czar” to oversee efforts against the opioid crisis
  • Listing drug cartels as terrorist organizations
  • Increasing border surveillance with 24/7 monitoring
  • Launching a Canada-U.S. Joint Strike Force to combat organized crime, fentanyl smuggling, and money laundering
  • Issuing a new intelligence directive backed by $200 million in funding

Trudeau emphasized that these efforts would strengthen Canada-U.S. relations and help avoid further economic disruptions.

As part of his now-paused retaliatory measures, Ford had threatened to scrap a $100M contract with Elon Musk’s Starlink, a deal designed to bring satellite internet access to 15,000 people in Northern Ontario.

The contract, signed in November 2023, had already faced criticism from opposition leaders, who questioned the transparency of the deal. Ontario Liberal Leader Bonnie Crombie previously called it a “sweetheart deal,” while Ontario Green Party Leader Mike Schreiner argued that Ford should never have approved it in the first place.

Musk, the billionaire owner of Starlink, SpaceX, and X, and now Trump’s Department of Government Efficiency (DOGE) chief, reacted to Ford’s initial threat with indifference.

“Oh well,” Musk wrote on X, shrugging off the cancellation.

With tariffs now on hold, Ontario officials have confirmed that the Starlink deal will proceed—for now.

Ford’s Warning: Ontario Is Ready for a Trade War

Despite the temporary pause, Ford remains firm on his stance against Trump’s tariff threats.

“If President Trump proceeds with tariffs, we won’t hesitate to remove American products from LCBO shelves or ban U.S. companies from provincial contracts,” Ford stated.

Ontario and its government agencies spend $30 billion annually on procurement, and Ford vowed to redirect those funds toward Ontario-made goods if the trade war escalates.

“I don’t care if it’s a cracker or a toothpick; we’re going to do everything we can to buy Ontario-made products or manufacture them here,” Ford said.

Trump’s tariffs were also expected to impact up to 500,000 Ontario jobs, a key reason why Ford insists on preparing the province for potential economic fallout.

Snap Election Amid Trade Tensions: Ontarians Head to the Polls February 27

The trade war uncertainty coincides with Ontario’s snap election, called by Ford last week. Voters will head to the polls on February 27, with the opposition parties arguing that the election was unnecessary and politically motivated.

  • Liberal Leader Bonnie Crombie accused Ford of “finally listening” to her demands regarding the Starlink deal, but questioned what other “shady deals” he has signed.
  • NDP Leader Marit Stiles stressed the need to make Ontario “tariff-proof”, advocating for greater investments in local industries to reduce reliance on U.S. trade.
  • Green Party Leader Mike Schreiner called the election a reckless move and reiterated his concerns over Ford’s handling of trade issues.

Ford’s About-Face on Trump: ‘A Disaster’

While Ford initially expressed optimism about Trump’s return to the White House, his tone has since shifted dramatically.

“It’s been a disaster. I’d never support that guy in my entire life,” Ford declared Monday. “He goes up and just stabs you right in the heart. Forget that.”

Meanwhile, Trump has also imposed tariffs on Mexico, though President Claudia Sheinbaum announced they, too, had been delayed for 30 days. Sheinbaum reportedly agreed to send 10,000 Mexican troops to the border to address Trump’s concerns over migration and drug smuggling.

What’s Next? A Fragile Truce in the Canada-U.S. Trade Battle

Though the tariffs are paused, Ford cautioned that Ontario must remain vigilant.

“Make no mistake, Canada and Ontario continue to stare down the threat of tariffs. Whether it’s tomorrow, in a month, or a year from now, President Trump will continue to use tariffs as a bargaining tool to get what he wants,” Ford wrote on X.

Ontario businesses and workers remain on edge, as uncertainty over the future of Canada-U.S. trade relations continues.

Ford, however, remains confident that Canada should focus on its real economic battle—not with the U.S., but with China.

“The real trade war we’re fighting is with China, and we can only win by working together, not against each other,” Ford said.

For now, Ontario and the U.S. are in a temporary ceasefire, but if Trump moves forward with tariffs, Ford has made it clear: Ontario is ready to fight back.

About Sophie Wilson 829 Articles
Sophie Wilson is a finance professional with a strong academic background, having studied at the University of Toronto. Her expertise in finance is complemented by a solid foundation in analytical and strategic thinking, making her a valuable asset in the financial sector.

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