Ontario rips up Starlink deal, plans to tax electricity in response to Trump trade war
LCBO removing 3,600 American products from its shelves and warehouses
Ontario will rip up its $100-million deal with Elon Musk's Starlink internet provider and U.S. companies will be banned from procurement contracts as part of the province's response to President Donald Trump's tariffs on Canadian goods.
Premier Doug Ford announced the measures Tuesday, adding he's warning lawmakers in New York, Michigan and Minnesota that if the trade war "persists" Ontario will put a 25 per cent surcharge on electricity flowing into the states and potentially cut the flow off entirely.
Ontario supplies roughly 1.5 million customers in the border states with electricity.
"This is not the outcome anyone wanted," Ford said at Queen's Park in Toronto. "We could have poured our efforts into making Canada and the U.S. the two richest, most successful, safest, most secure two countries on the planet. Unfortunately, one man — President Trump — has chosen chaos instead."
Just after midnight, Trump moved ahead with long-threatened 25 per cent tariffs on most Canadian goods. A 10 per cent tariff will similarly be applied to all Canadian energy exports heading south of the border.
The import levies could wreak havoc on vital Ontario industries like auto manufacturing and steel production, as well as drive up retail prices and fuel more inflation. Auto giants based in the province have warned plants could be forced to halt production within five to eight days.
The tariffs come despite Trump himself being the president who signed the most recent free trade deal with Canada and Mexico, saying in 2020 it was "the best and most important trade deal ever made by the USA."
You can read more about tariffs, how they work and what they could mean for Canada here.
During his news conference, Ford again threatened to surcharge or cut off critical mineral exports to the U.S. should the trade war linger.
"We also need to be ready to dig in for a long fight," Ford said. "We need to be ready to escalate using every tool in our tool kit."
Ford spoke just after hours Ontario's primary liquor wholesaler and retailer confirmed it will stop purchasing and selling U.S. alcohol.
The LCBO previously offered some 3,600 American products sourced from 35 states, amounting to roughly $1 billion in annual sales. As the province's main booze distributor, it means grocery and convenience stores, bars and restaurants and other retailers will no longer be able to buy U.S. alcohol.
Prime Minister Justin Trudeau announced late Monday that Canada's retaliatory response would include matching tariffs on $155 billion worth of U.S. goods — roughly $30 billion worth of goods right away and the remaining $125 billion in 21 days to give Canadian companies time to adjust their supply chains.
Trudeau said there will also likely be an expansion of employment insurance benefits and direct support for businesses.
"Today the U.S. launched a trade war against Canada, their closest ally and their closest friend. At the same time, they're talking about working positively with Russia, appeasing Vladimir Putin: a lying, murderous dictator. Make that make sense," Trudeau said during a Tuesday morning news conference in Ottawa.
He added that he believes Trump's ultimate goal is to weaken the Canadian economy so he can try to annex the country.
"First of all, that is never going to happen. Canada will never be the 51st state," he continued.
Ford has previously expressed support for the federal government to go "dollar for dollar" with retaliatory tariffs against U.S. goods, and repeated that call Tuesday.
"Now we have no choice, we have to respond," Ford said. "They have my full support for a strong and forceful response."
The premier said American companies will not be able to bid on the $30 billion worth of procurement contracts the province awards each year, or bid on contracts related to his $200-billion infrastructure plan to build highways, tunnels, transit, hospitals and jails.
"U.S.-based businesses will now lose out on tens of billions of dollars in revenues," Ford said. "They only have President Trump to blame."
As for the deal with Starlink to provide high-speed internet to northern Ontario, rural and remote First Nation communities, "it's done, it's gone," he said.
"We won't award contracts to people who enable and encourage economic attacks on our province and our country."
His Progressive Conservatives recent election platform included nearly $20 billion in proposed new spending aimed at supporting industries and workers who could be hurt by tariffs. That includes a new $5-billion Protect Ontario Account, $10 billion in support for employers through a tax deferral, up to $3 billion more in payroll and premium relief and up to $40 million for municipalities.
But Ford also cautioned tough times lay head.
"Businesses and families will feel the pain of this needless fight, but together we're going to stand up for Canada," he said. "We're going to get through this more united than ever before."
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With files from The Canadian Press