The Doug Ford government has agreed to a fee to formally cancel its $100-million contract with Elon Musk’s Starlink amid an ongoing trade war with the United States.

The Tories first announced plans to rip up the contract for satellite internet service after U.S. President Donald Trump imposed sweeping tariffs on Canadian goods in January.

A government source tells CTV News Toronto that a fee was paid to cancel the deal but the cost was “significantly less” than the full value of the contract.

“Our government has cancelled the Starlink contract. We are seeking an alternate solution as we continue our efforts to secure long term, stable high-speed internet access across the province,” a statement from a Government of Ontario spokesperson on Wednesday reads.

The deal with Starlink was first announced in November 2024 and was supposed to help bring SpaceX’s Starlink satellite internet system to 15,000 locations in rural and Northern Ontario by June.

However, the deal quickly came under scrutiny amid rising trade tensions with the U.S.

In February, Ford told CNN that he “can’t support someone hell-bent on destroying our province” with regards to Musk.

Musk, it should be noted, has since left the White House and has publicly criticized some Trump policies.

In a statement provided to CTV News on Wednesday, NDP Leader Marit Stiles said that the contract should have never been awarded to Musk’s Starlink in the first place.

“This should have been done a long time ago and the premier should have secured a proper deal for those in Northern and rural communities who still don’t have the reliable internet that they were promised by this government,” she said. “What is the premier’s plan to deliver on this promise to Ontarians? Handing over hard-earned tax dollars to Elon Musk’s company was never the right approach. Months have passed and we still don’t have a plan or even a process that’s calling for home-grown solutions.”

The formal cancellation of the deal comes with Trump threatening to impose a higher 35 per cent tariff on many Canadian goods as of Friday.