OTTAWA, Feb 3 (Reuters) - The Canadian province of Ontario announced on Monday the cancellation of a C$100 million ($68.12 million) contract with Elon Musk's Starlink, in response to U.S. President Donald Trump's recent actions.
Ontario, Canada's most populous province and industrial hub, also declared a ban on U.S. companies from future provincial contracts.
Premier Doug Ford of Ontario expressed the challenges ahead, stating, Trump's tariffs are going to devastate our economy, emphasizing the necessity for Canada to respond firmly.
Trump is set to implement a 25% tariff on nearly all Canadian imports, except for oil which will face a 10% surcharge, starting on Tuesday. These measures could potentially push the Canadian economy into a recession if they are protracted.
The move has caused widespread shock in Canada, a nation that has historically maintained a close relationship with the United States as an ally and trading partner.
Ford, known for his strong stance on retaliation, emphasized that U.S.-based businesses would suffer significant financial losses due to the repercussions of Trump's decisions.
We'll be terminating the province's contract with Starlink. Ontario will not engage in business with entities that intend to harm our economy, Ford declared at a press conference.
The agreement signed with Starlink in November was intended to provide high-speed internet access to 15,000 eligible homes and businesses in remote communities. Musk, a close confidant of Trump, is leading the President's efforts to downsize the federal government.
Starlink was not immediately available for comment.
With a snap election scheduled for Feb. 27, polls indicate that Ford's Progressive Conservatives are likely to secure a victory.
Additionally, Ford has instructed the province's liquor board, a significant U.S. alcohol retailer, to cease selling American products as of Tuesday.
Prime Minister Justin Trudeau recently announced that Canada will impose a 25% tariff on C$155 billion worth of U.S. goods in response to the U.S. measures.
Trump's tariffs are contingent on Canada taking stronger actions against illegal migrants and fentanyl smuggling, conditions similar to those placed on Mexico.
President Trump mentioned a temporary suspension of tariffs on Mexican products in exchange for enhanced border security measures.
While Canada does not foresee receiving a comparable one-month tariff suspension, as demonstrated with Mexico, officials are engaging in discussions with the U.S. administration.
Trudeau and Trump have communicated regarding the situation, with further discussions scheduled for 3 pm Eastern Time (2000 GMT).
The ongoing tariffs are unprecedented, given the shared free trade agreement between the U.S., Canada, and Mexico. In protest, Canadians have been cancelling trips to the U.S., boycotting American products including alcohol, and displaying discontent at sporting events.
Kevin Hassett, the director of the White House's National Economic Council, mentioned on CNBC that Canada viewed the tariffs as a potential trade war.
($1 = 1.4680 Canadian dollars)