In an unexpected turn in the growing trade dispute between Canada and the United States, the province of Ontario has responded with drastic measures affecting U.S. companies, including Starlink, Elon Musk’s satellite internet company. In February 2025, the provincial government canceled a 100-million-Canadian-dollar contract with Starlink, an agreement aimed at providing high-speed internet to rural and remote communities in the province. The decision is part of a series of Canadian retaliatory measures following the 25% tariffs imposed by then-President Donald Trump.
Ontario Takes a Firm Stand Against the U.S.
Ontario Premier Doug Ford justified the move by stating that the province would not do business with entities harming its economy. This statement made it clear that the provincial administration was willing to take concrete action in response to Washington’s trade policies.
In addition to canceling the contract with Starlink, Ontario implemented new restrictions on U.S. companies, barring them from provincial public contracts. It also ordered the removal of U.S. alcoholic products from the Liquor Control Board of Ontario (LCBO), the public corporation that regulates the purchase and sale of alcoholic beverages in the province. These decisions aim to pressure Washington and protect local economic interests.
Canada’s Trade Retaliation
Ontario’s actions were not isolated but part of a national retaliation strategy. In response to the 25% tariffs imposed by Trump on Canadian products, the Canadian federal government announced retaliatory tariffs valued at 155 billion Canadian dollars on U.S. goods. These measures reflect the growing deterioration of trade relations between the two countries and the impact that U.S. protectionist policies have had on the Canadian economy.
It is worth noting that while Starlink was affected, the contract cancellation was not a direct sanction against the company, but rather a response to U.S. tariff policies impacting the province.
What’s Next for Starlink and Canada-U.S. Trade?
Ontario’s decision to cancel its agreement with Starlink leaves many rural communities without an immediate alternative to improve their internet access. At the same time, excluding U.S. companies from provincial contracts could strain relations with Washington and lead to repercussions in other trade sectors.
With Canada-U.S. trade relations at their most strained in years, it remains to be seen whether these measures will lead to a renegotiation of tariffs or if the dispute will escalate further. Could this situation force Elon Musk and Starlink to seek new strategies for operating in Canada?
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