Ontario has announced a 25% surcharge on electricity exports to the United States, targeting power supplies to New York, Michigan, and Minnesota. The move comes in response to the tariffs imposed by former President Donald Trump on Canadian goods, escalating trade tensions between the two nations.
The surcharge, valued at $10 per megawatt-hour, is expected to generate between $300,000 and $400,000 per day. Ontario Premier Doug Ford stated that the revenue will be directed toward supporting local workers and businesses impacted by US tariffs.
The measure will remain in place until US trade restrictions on Canada are permanently lifted.
Ontario Retaliates Against Us Tariffs With Electricity Surcharge
Ontario’s decision to impose the tariff on electricity exports marks a significant escalation in trade tensions between Canada and the United States. According to Reuters, the measure aims to counter US duties on steel, aluminium, and other Canadian exports, which have strained economic relations between the two countries.
Ford emphasised that Ontario will not back down until the threat of tariffs is eliminated. “President Trump’s tariffs are a disaster for the US economy. They’re making life more expensive for American families and businesses,” he said.
The surcharge affects approximately 1.5 million American households in northern border states, raising concerns about higher energy costs for consumers. Estimates suggest that the measure will increase electricity bills by around $100 per month for the average US household or business in affected states.
Ontario has also taken additional steps, including removing American alcohol from government-run liquor stores and banning US firms from government contracts. The provincial government has signalled that further measures could be introduced if trade tensions escalate.
Impact on US-Canada Energy Trade and Economic Relations
Ontario plays a crucial role in North America’s electricity market, supplying power to US states while also importing electricity during peak demand periods.
According to the CBC, the province’s electricity system operator has been directed to apply the surcharge to all power exports, ensuring that the additional cost is collected monthly on behalf of the government.
The measure raises concerns about potential US retaliation. While Ontario currently exports more electricity to the US than it imports, it occasionally relies on US-generated power during summer months. Energy Minister Stephen Lecce has stated that Ontario can sustain its energy needs without US imports, minimising the risk of immediate repercussions.
Ford has also suggested that other Canadian provinces should consider similar trade measures, particularly in Alberta and Saskatchewan, which export vital resources like oil and potash to the US. However, provincial leaders have expressed reluctance to escalate trade restrictions further.
