Ontario PC Leader Doug Ford speaks at a campaign even in Oakville, Ont., on Feb. 10.Chris Young/The Canadian Press
Ontario’s Doug Ford showed some welcome moxie last week when he said his province would cancel a $92-million contract with Starlink, a satellite internet provider owned by Elon Musk, in retaliation against U.S. tariffs on Canadian goods.
“Ontario won’t do business with people hell-bent on destroying our economy,” he said, a reference to the fact that Mr. Musk is deeply involved with the Trump administration and, as he put it, is President Donald Trump’s “buddy.”
A few hours later, when the U.S. backed off on immediately imposing tariffs, Mr. Ford put a pause on the Starlink cancellation, as well as on his plans to remove U.S.-made booze from the province’s liquor stores and ban American companies from bidding on provincial contracts.
This now raises the prospect of Mr. Ford having to re-cancel the Starlink contract if the U.S. decides to re-impose tariffs at the end of its 30-day reprieve − or, as U.S. President Trump did over the weekend, puts targeted levies on Canadian steel and aluminum.
It also throws a spotlight on a contract that raised questions when it was first announced in November, and which now raises many more in light of Mr. Musk’s discomforting proximity to the Trumpian version of American power.
When all factors are weighed together, the sensible thing for Mr. Ford to do is end the deal with Starlink once and for all, and move on.
For starters, Mr. Trump says he will impose 25-per-cent tariffs on Canadian steel and aluminum. These completely unjustified tariffs will hit Ontario particularly hard. Are we now going to see Mr. Ford retaliate with yet another cancellation of the Starlink deal? Mr. Trump’s unpredictable and harmful behaviour is reason enough to cancel it for good.
Beyond that, there are the persistent questions about the three-year, $92-million deal itself. Starlink won the contract through a competitive bidding process.
If it remains in place, the company will supply high-speed internet access to 15,000 “premises” in Northern Ontario and other remote areas that aren’t served by a land-based internet provider starting in June.
Ontario government officials have told The Globe that the majority of the cost of the deal is a payment to Starlink in exchange for it reserving capacity on its satellites so that its new Ontario customers are guaranteed service regardless of worldwide demand on its network.
Given that the normal cost of the individual satellite dish each premise would have to install in order to receive Starlink internet service is $600, tax and shipping included, that means Ontario will be paying as much as $80-million over three years to Starlink simply to ensure that it delivers what it is selling.
Ontario argues that Starlink is the only operator that has the capacity to launch its own low-Earth-orbit satellite system, giving it an edge over competitors. It is indeed true that Starlink has changed the game in satellite internet service, and that it has the market mostly to itself at the moment.
But Ontario also signed a five-year deal in 2021 worth $108-million with Telesat, a publicly owned Canadian company, to invest in LEO satellites to serve remote areas. And last year, the federal government loaned Telesat $2.14-billion over 15 years to finance construction of LEO satellites. Quebec pitched in a $400-million loan, as well.
Seen in that light, the Starlink deal is little more than an expensive stop-gap, possibly motivated by Mr. Ford’s early election call, until the LEO Telesat network begins service in 2027. It is not crucial to the longer-term goal of expanding high-speed internet service to remote parts of Canada, a fact confirmed by Ontario’s willingness to cancel the contract.
Finally, there is the issue of Mr. Musk’s devotion to Mr. Trump. High-speed internet service in Northern Ontario and other parts of Northern Canada will be critical to this country’s national security. While Mr. Musk is welcome to sell his Starlink service to individuals (the company says it has 400,000 customers in Canada), it makes no sense to have a close political ally and benefactor of the mercurial Mr. Trump in control of a system providing internet service that would be used by government, business and members of the military.
Add it all up and the only decision the Ford government can make is the same one it made barely a week ago: put an end to the Starlink deal, but this time make it permanent.