Importance Score: 72 / 100 🔴
Trade tensions are escalating for Elon Musk as the trade war context becomes increasingly personal. Amidst his criticism of President Donald Trump’s leading trade advisor, referring to him as “intellectually deficient,” Musk’s satellite internet venture, Starlink, is facing potential losses of hundreds of millions in Canadian subsidies.
Canadian Provinces Reassess Starlink Subsidies Amid Trade Disputes
Starlink’s relationship with Canada has encountered considerable turbulence recently. Starting March 4th, Ontario’s Premier Doug Ford revoked a substantial Starlink contract valued at $100 million. Quebec, having invested $130 million in subsidized Starlink services for its residents over the past three years, informed the Financial Times of its decision not to renew the agreement upon its expiration in June. Following suit, Yukon Premier Ranj Pillai announced on April 3rd the cancellation of as many Starlink contracts as possible.
Concerns Over Sovereignty Raised
Geoff White, Executive Director at the Public Interest Advocacy Centre, expressed apprehension to FASTNET, stating, “Mr. Musk constitutes a threat to our sovereignty as long as he is aiding and abetting President Trump. We need to seriously evaluate the desirability of this company providing services at all.”
Lobbying Efforts Against Starlink Subsidies
Documents reviewed by the Financial Times indicate that Bell Canada, the nation’s largest telecommunications corporation by revenue, along with its subsidiary Northwestel, are actively lobbying the Canadian government to impede Starlink from securing subsidies designated for serving remote northern regions. Starlink reports possessing over 400,000 subscribers within Canada as of June 2024.
US Broadband Grant Situation Contrasted
This situation echoes Starlink’s prior pursuit of $900 million in US broadband grants three years prior. That initial bid was unsuccessful due to Starlink’s inability to demonstrate compliance with the Federal Communications Commission (FCC) speed benchmarks. However, Starlink’s fortunes in the US have since shifted. Following Musk’s expenditure of $132 million in support of Republican candidates in 2024, Starlink is now positioned to potentially receive up to $20 billion in rural broadband subsidies.
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Starlink’s Value and Cost in Canada
Despite Trump’s announcement of a 90-day tariff moratorium on Wednesday, it remains uncertain whether Canada will reverse its Starlink disinvestment. Starlink has proven invaluable for Canadians in isolated areas lacking dependable internet alternatives. Nonetheless, its elevated price point has drawn criticism. Starlink’s service costs $140 monthly in Canadian currency (approximately $99 US), compared to $120 per month in the US.
Representatives for Starlink have not yet issued a response to requests for comment.
International Approaches to Starlink and Tariffs
Globally, tariffs have not uniformly resulted in the rejection of Starlink. Prior to Trump’s “Liberation Day” on April 2nd, Vietnam granted Starlink operational approval within the country on a trial basis until 2030. Analysts interpret this action partly as a strategic move to mitigate potential US tariffs stemming from Vietnam’s significant bilateral trade surplus with the United States.
Global Expansion Amid Trade Tensions
Bangladesh also authorized Starlink operations shortly before its imports faced 37% tariffs. Furthermore, on April 8th, Brazil sanctioned Starlink to deploy an additional 7,500 satellites within the country, more than doubling the existing authorization of 4,408 Starlink satellites.