The Ontario government’s decision to cancel a multi-million dollar contract with Starlink is one example of the trade tensions between Canada and the United States, demonstrating how tariff disputes can harm strategic areas such as digital connectivity. The measure, described as a direct response to US tariffs on Canadian products, casts doubt on technology partnerships between governments and US companies.
Ontario cancel Starlink contract as a response to the US tariffs
The Canadian province of Ontario has canceled a C$100 million ($68.12 million) satellite high-speed internet contract with Elon Musk’s company Starlink, following through with a vow by the province’s premier to cut ties in retaliation for U.S. tariffs imposed on Canada. Stephen Lecce, Ontario’s minister of energy and mines, confirmed the cancellation of the contract for internet services at an unrelated news conference in Toronto on Wednesday. Lecce, who oversees broadband connectivity in Canada’s most populous province, didn’t say how much the termination would cost.
“I can confirm that the premier has fulfilled his word, which is to cancel that contract because of the very reasons he cited in the past,” Lecce said. “We are standing up for Canada.”
Under the terms of the deal, which Ontario signed last November, Starlink was to provide high-speed internet access to 15,000 eligible homes and businesses in more remote communities. In February, Ontario Premier Doug Ford threatened to end the agreement with Starlink in response to U.S. President Donald Trump imposing tariffs on Canadian goods. He later postponed the cancellation after Trump agreed to a 30-day pause on tariffs.
The termination leaves a gap in the plan to connect the 15,000 residences, and it’s still unclear what alternatives will be adopted to achieve this goal. Although the Ontario government emphasizes that it will continue investing in broadband, the cancellation creates uncertainty for communities already facing difficulties with internet access.
Musk, Trump, and Ontario’s retaliation
SpaceX, Starlink’s parent, did not immediately respond to a request for comment. Musk headed Trump’s drive to shrink the federal government and was a close ally before falling out with the president.
Ontario’s decision carries political implications, especially given Elon Musk’s history with former President Donald Trump. Musk, who previously supported U.S. government initiatives, has adopted a more critical stance in recent months. Starlink, which didn’t speak out, saw a business opportunity canceled due to the clash between the countries generated by Trump’s tariffs.
Trade negotiations intensify climate of uncertainty
Canada and the U.S. are working on negotiating a trade deal, the date Trump is threatening to impose a 35% tariff on all Canadian goods not covered by the U.S.-Mexico-Canada trade agreement.
Pressure on the Canadian government is mounting as the US-imposed deadline for imposing new tariffs approaches. While there is a push from both sides to reach a new trade agreement, the White House’s signaling that all products outside the scope of the USMCA may be subject to tariffs adds urgency to the negotiations.
Last month, Canadian Prime Minister Mark Carney saidtalks were at an intensephase, while reiterating that a deal that would remove all U.S. tariffs was unlikely. Lecce said Ontario has taken other measures against the U.S., including restricting the ability of U.S. companies to bid on provincial government contracts, removing U.S.-made alcoholic beverages from store shelves and working to decouple the province’s energy sector from the U.S.
Risks to technological and commercial integration between countries
The cancellation of the Starlink contract highlights how trade disputes can directly impact innovation and infrastructure initiatives, which in some ways represents a setback. As Canada and the United States’ differences deepen, joint projects risk being halted or deprioritized. In the long term, instability in bilateral relations could harm both technological advancement and economic integration between the two countries.