Ford Government Defends Secret SpaceX Payout After Cancelling $100M Starlink Deal Over Trump Tariff Fight

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A satellite internet contract designed to solve one of Ontario’s hardest connectivity problems has turned into a lingering fight over tariffs, public money and government transparency. Ontario cancelled its $100-million agreement with Elon Musk’s SpaceX during the Canada-U.S. trade confrontation in 2025, abandoning a plan that would have brought Starlink service to thousands of rural, remote and northern properties.

The cancellation itself was highly public. What Ontario paid to get out of the contract has been anything but. More than a year later, Premier Doug Ford’s government continues to withhold the termination amount under a confidential settlement, saying disclosure could hurt the province’s position in future commercial negotiations. New financial statements have now revived questions about where the payment appears in Ontario’s books, while the province works toward a delayed 2028 deadline for universal high-speed internet access.

A $100 Million Deal Was Supposed to Solve Ontario’s Hardest Broadband Gaps

Ontario announced its partnership with SpaceX on November 14, 2024, creating the Ontario Satellite Internet program, or ONSAT. The plan called for Starlink to provide high-speed internet access to as many as 15,000 eligible unserved and underserved homes and businesses. The focus was on rural, remote and northern communities where conventional fibre or fixed-wireless networks can be prohibitively difficult or expensive to deploy. Service was expected to start in June 2025, with the program designed around internet speeds of at least 50 megabits per second for downloads and 10 Mbps for uploads.

The contract was also the product of a procurement process that had begun well before Donald Trump’s return to the White House. Infrastructure Ontario launched a request for qualifications in August 2023, shortlisted two satellite providers and proceeded to a request for proposals in early 2024. Starlink was ultimately selected. The planned program included requirements for engagement with affected Indigenous communities and potential employment, training and contracting opportunities. Ontario would subsidize eligible equipment and installation, while customers would remain responsible for their ongoing monthly internet service.

Trump’s Tariffs Turned Starlink Into a Political Symbol

The contract’s future changed rapidly after the U.S. administration announced sweeping new tariffs on Canadian imports in early 2025. Trump initially ordered additional tariffs of 25 per cent on most Canadian goods and 10 per cent on Canadian energy products. A planned February implementation was postponed for roughly a month, prompting Ontario to temporarily pause retaliation that Premier Ford had announced, including an initial threat to terminate the Starlink agreement.

When the tariffs took effect on March 4, 2025, Ontario moved ahead with its response. Ford said the province would end the Starlink partnership, remove American alcoholic beverages from LCBO channels and restrict U.S. companies from competing for provincial procurement contracts. Ottawa, meanwhile, responded with 25 per cent tariffs on an initial $30 billion worth of American goods. The U.S. tariff regime was subsequently modified, including exemptions for qualifying CUSMA goods, but by then Starlink had become part of Ontario’s broader effort to demonstrate economic retaliation. What had started as a rural-infrastructure project was now caught directly in the political confrontation between the two countries.

Cancelling the Contract Did Not Mean Walking Away for Free

Ford’s public language made the cancellation sound immediate, but ending a signed commercial agreement proved more complicated. Ontario formally confirmed in July 2025 that the $100-million arrangement was cancelled. Reporting at the time established that the province had negotiated a termination payment with SpaceX. A government source described the amount as greater than zero but substantially below the full contract value.

By March 2026, the province confirmed that Ontario and SpaceX had reached a confidential settlement. The government would say only that the resulting “kill fee” was significantly less than $100 million. Ford had initially told reporters he did not know the exact amount and would obtain it, but his office later said the figure could not be released because of the confidentiality agreement. SpaceX has not publicly disclosed the amount either. That distinction is important: Ontario did not pay the entire $100-million contract after cancelling it, based on the information released by the province, but taxpayers did incur an undisclosed cost for ending the agreement before the planned service was implemented.

Ontario’s Latest Public Accounts Brought the Issue Back Into Focus

The controversy resurfaced when Ontario released its audited Public Accounts for the fiscal year ending March 31, 2026. The documents reported $220.9 billion in overall program spending and a $13-billion provincial deficit. They also showed that spending classified under “other programs” came in $3.3 billion below the budget plan, with updated construction schedules for high-speed internet projects listed among several reasons for the lower spending.

What the documents did not provide was a separately identifiable SpaceX or Starlink payment. The Canadian Press reported that neither name appeared in the audited statements, prompting renewed questions about how the termination cost was recorded. Treasury Board President Kinga Surma has said the Public Accounts accurately reflect provincial spending, while acknowledging that the broadband program spent less than expected as projects encountered challenges. There is an important accounting distinction here: the absence of a vendor-specific Starlink line does not establish that the expense was left out of Ontario’s financial statements. The Auditor General issued an unmodified opinion that the consolidated statements fairly presented Ontario’s finances in all material respects. What remains undisclosed is the specific amount paid to SpaceX.

The Ford Government Says Confidentiality Protects Taxpayers in Future Negotiations

Surma has defended withholding the settlement figure by pointing to the way governments negotiate major commercial agreements. Contracts can contain numerous financial components, including termination clauses and negotiated settlement values. Her argument is that publishing those amounts could tell future suppliers how much Ontario is prepared to pay when contracts are changed or cancelled, reducing the government’s leverage in subsequent negotiations. Energy and Mines Minister Stephen Lecce has similarly described the SpaceX settlement as commercially sensitive.

The government has also framed cancellation as consistent with the mandate it received during Ontario’s February 27, 2025 election. Ford campaigned heavily on responding to Trump’s tariff threats and his Progressive Conservatives returned with a third consecutive majority, winning 80 of the legislature’s 124 seats. Surma has said voters supported the decision to abandon Starlink. The election result clearly returned Ford’s party to government, although an election involving dozens of issues cannot establish how every voter viewed one specific contract. For the government, the distinction is that cancelling Starlink and publishing the confidential settlement are two separate questions.

Opposition Parties and Taxpayer Advocates Want the Number Released

That distinction has not satisfied the government’s critics. NDP MPP Jessica Bell raised the termination payment during an estimates committee hearing, questioning whether Ford’s office had been provided with information about the financial consequences before the deal was cancelled. Red Tape Reduction Minister Andrea Khanjin, appearing in connection with the premier’s office and Cabinet Office estimates, did not provide the amount. A Progressive Conservative committee member subsequently argued that the question fell outside the committee’s scope, ending that particular exchange.

Ontario Liberal finance critic Stephanie Bowman has also said her party intends to continue pressing for details, focusing on both the amount and its treatment in the province’s financial reporting. The Canadian Taxpayers Federation has taken a similar position. Ontario director Noah Jarvis has argued that taxpayers should be able to determine whether the province received value for money when it paid a company not to proceed with contracted work. Those are criticisms of the government’s disclosure approach; they do not establish that Ontario breached accounting rules. The unresolved transparency dispute centres on whether commercial confidentiality should outweigh public disclosure of a government-funded settlement.

The Bigger Problem Is Connectivity in Communities With Few Alternatives

The dispute involves more than a contract with a high-profile American billionaire. ONSAT was created because some Ontario communities remain exceptionally difficult to connect using terrestrial networks. Infrastructure Ontario specifically designed the satellite program for places where fibre-optic or fixed-wireless service was not currently available. Its requirements included direct engagement with Indigenous communities and provisions intended to create local economic opportunities where feasible.

Satellite internet is already a practical part of life in portions of northern Ontario. The Canadian Press reported that residents of some remote and fly-in First Nations have independently purchased Starlink equipment, transporting terminals from larger centres such as Thunder Bay or Sioux Lookout and using them in homes, community facilities and while travelling. The broader digital divide remains significant. National CRTC figures released in 2026 showed that roughly 96 per cent of Canadian households had access to internet meeting the 50/10 Mbps universal-service standard, while access on First Nations reserves was considerably lower. That makes the loss of a ready-made satellite solution particularly consequential for the relatively small share of households that remain hardest to reach.

Ontario Is Now Working Toward 2028 Instead of 2025

When the Starlink deal was announced, Ontario was promising high-speed internet access in every community by the end of 2025. That deadline has now moved to the end of 2028. Provincial figures say more than 96 per cent of Ontarians have high-speed access and that more than 157,000 previously underserved homes and businesses had been connected through the broadband expansion program as of April 2026. Ontario says it has committed nearly $4 billion to the broader effort, while more than 240,000 kilometres of fibre cable have been installed since 2021.

The Starlink cancellation is not the only reason for the revised timetable. Ontario’s own financial documents cite updated construction schedules for high-speed internet projects, and northern infrastructure projects routinely face logistical, permitting and geographical obstacles. Still, provincial officials have acknowledged that losing the Starlink agreement created additional challenges. Lecce now says Ontario is interested in a domestic or Canadian-controlled low-Earth-orbit satellite option. No replacement on the same scale has been publicly announced. As a result, three questions remain intertwined: how much Ontario paid SpaceX, what technology will replace Starlink for the hardest-to-reach communities, and how quickly the remaining connectivity gap can actually be closed.

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