Ontario has officially pulled the plug on a $100 million agreement with Elon Musk’s Starlink, signaling a change in how the province wants to deliver high-speed internet to its remote and rural communities. The move follows months of political wrangling and rising trade tensions between Canada and the United States.
The contract, signed in late 2023 under Premier Doug Ford’s administration, was designed to support the ONSAT program — an initiative aimed at connecting 15,000 homes and businesses in underserved parts of Ontario using satellite-based internet. Starlink’s network of low-orbit satellites, operated by Musk’s company SpaceX, was selected for its ability to deliver fast and reliable connectivity where traditional broadband doesn’t reach.
Now, less than a year later, Ontario has stepped away from that plan.
A Deal Unraveled by Tariffs and Timing
The cancellation didn’t come out of the blue. Earlier in 2024, Premier Ford had warned that the Starlink contract could be on the chopping block if the United States moved forward with new import tariffs on Canadian products. These tariffs, part of a broader trade dispute under President Donald Trump’s administration, raised economic and political concerns in Canada.
After a temporary pause on the retaliatory measures, Ford’s government resumed its review of the Starlink deal — ultimately deciding to terminate it. Though the exact cost of cancelling the agreement has not been made public, it’s expected that taxpayers could be on the hook for a significant “kill fee,” a standard feature in large-scale contracts like this one.
Critics Call Out Poor Planning
The decision has drawn sharp criticism from opposition lawmakers, who argue that the Ford government acted recklessly in both signing and then abruptly abandoning the contract. Their biggest concern: the province has yet to announce a replacement vendor.
With thousands of rural residents still waiting for reliable internet access, critics say the lack of a backup plan only adds uncertainty to already underserved communities.
The opposition has also called on the government to disclose how much the cancellation will cost the public, arguing that transparency is essential given the size of the original investment.
Search Shifts to Canadian Satellite Providers
With the Starlink deal off the table, Ontario is now exploring homegrown alternatives. Several Canadian companies are developing satellite networks that could eventually serve the same purpose.
Leading the list is Telesat, a veteran Canadian aerospace firm that’s currently building its own Low Earth Orbit (LEO) satellite constellation, known as the Lightspeed network. The federal government has already invested in the project, touting it as a strategic step toward “space sovereignty” — a term that reflects growing concern over relying on foreign-owned infrastructure for critical digital services.
Toronto-based Kepler Communications is another contender. Though smaller than Telesat, Kepler operates a growing fleet of LEO satellites designed for Internet of Things (IoT) services, with use cases in industrial monitoring, agriculture, and logistics.
Existing Starlink Users Won’t Be Affected
Despite the contract cancellation, current Starlink users in Ontario won’t lose access to their internet service. The government’s decision only applies to the new installations planned under the ONSAT initiative. Residents and businesses who have already purchased and activated Starlink equipment can continue using it without interruption.
Starlink’s rapid global expansion in recent years has made it a popular choice in hard-to-reach areas, offering coverage in dozens of countries and territories.
Starlink Expands IoT Reach Worldwide
While Ontario steps away from Starlink, the company is pressing forward with its efforts to expand into the Internet of Things sector.
In New Zealand, telecom provider One NZ recently launched a satellite-powered IoT service using Starlink’s direct-to-device technology. The partnership has enabled applications like beehive monitoring for remote farms — demonstrating how satellite networks can go far beyond just home internet.
To support this growing demand, One NZ and Starlink have jointly approached the U.S. Federal Communications Commission (FCC) to request additional radio spectrum. The companies say expanding spectral capacity is essential for meeting the rising data needs of users and enabling new services such as remote sensing and machine connectivity.
