Tariff war puts Donald Trump’s efficiency czar in Canada’s crosshairs
“Ontario won’t do business with people hellbent on destroying our economy,” Ford wrote on X, as other premiers vowed to scrutinize their Starlink contracts.
“All gloves are off,” said James Hinton, a senior fellow at the Centre for International Governance Innovation (CIGI). “Canada is being hit hard from its historically strongest ally, and it may be politically expedient to target individuals like Musk who garner outsized influence over the U.S. administration.”
“Appeasement does little to stop a bully. We should exercise our powers to punch the bully in the nose,” Macfarlane said.
Julian Karaguesian, a visiting economics lecturer at McGill University and former adviser to Finance Canada added that targeting Musk might even be preferable to dollar-for-dollar retaliatory tariffs that could cause stagflation and harm Canadians.
But if picking a fight with Musk sends a message, it doesn’t come without risks.
Slapping 100 per cent tariffs on Tesla vehicles — which already start at $56,000 — would push the price far out of reach for most Canadians at a time when the current government has committed to the EV transition.
Starlink, as a private company, would face less stock market pressure than Tesla if Ontario and other provinces were to cancel their contracts down the line. Most say such cancellations would be unlikely to exact significant pain on the company, which generated an estimated US$8.2 billion in global revenue last year.
“A $100 million contract when he’s worth (over) $400 billion — this is just a flea on his side,” said Daniel Trefler, a trade economist and the Canada research chair in competitiveness and prosperity at the University of Toronto’s Rotman School of Management.
A full boycott of Starlink could also have repercussions for individual Canadians.
“Provinces would need to heavily subsidize new infrastructure to replace Starlink, which could take years to implement,” said Andreas Schotter, professor of international business at the University of Western Ontario’s Ivey School of Business.
There are legal risks too.
A bullseye on Musk’s back also “risks looking like a personal vendetta rather than a rational economic response,” he said.
But while Trefler said cooperation should be pursued first before any sort of retaliation, he noted that Ford was on the right track in targeting digital services like Musk’s high-tech firms, which he described as going “straight for the jugular.”
“If we want to truly irritate the Americans, we need to move beyond thinking about what kind of ketchup we buy and think of ways of hitting their (digital) service providers without unduly harming Canadian consumers,” he said.