Ontario has officially cancelled its $100-million contract with Elon Musk-owned satellite internet company Starlink, following through on Premier Doug Ford’s threat when the United States (US) proposed tariffs on Canadian goods back in February.
Starlink, a subsidiary of Musk’s SpaceX, entered into an agreement with the province in November 2024 to provide high-speed internet to 15,000 homes and businesses in rural, remote, and northern communities by June 2025. Global News reported today that Ontario has since paid an undisclosed break fee to Starlink, executing on Ford’s promise to kill the deal when the US instituted tariffs on Canadian goods in March.
“Our government has cancelled the Starlink contract,” a Government of Ontario spokesperson told BetaKit. “We are seeking an alternate solution as we continue our efforts to secure long term, stable high-speed internet access across the province.” The province did not provide a response to our question about the value of the break fee.
During the first wave of tariffs in March, Ford said contracts would not be awarded to those who “encourage economic attacks” on Canada and, while he did not know how much it would cost to see through, added that it was “principle” to cancel the contract of President Donald Trump’s “right-hand-man.”
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While Musk was an integral part of the Trump White House at that point, heading the cost-cutting Department of Government Efficiency (DOGE) and meeting with foreign leaders, the two have since had a very public falling out.
A senior government source told Global News that negotiations with SpaceX to settle the fee had gone well, and that the fee was substantially less than the contract’s $100-million value. Global also reported that the Ontario government considered introducing legislation to end the agreement, which would have allowed Ontario to indemnify itself if SpaceX tried to sue, but could have also provoked the company to pull out of the province entirely.
The province did not disclose to BetaKit if it had considered ending the deal through legislation.
While Canada has been largely spared from the many waves of tariffs implemented by the US over the course of the year, Trump threatened Canada earlier this month with a 35-percent tariff on goods not exempted under the Canada-United States-Mexico Agreement (CUSMA) if a trade deal isn’t reached by Aug. 1.
Feature image courtesy Doug Ford via Linkedin.