Ontario Slaps 25% Surcharge on U.S. Electricity Exports Amid Trade War Tensions

Ontario has officially imposed a 25% surcharge on electricity exports to the United States, escalating tensions in an ongoing trade dispute. Premier Doug Ford has made it clear that he is prepared to increase the surcharge—or halt electricity exports entirely—should the trade conflict continue.

The surcharge, which took effect Monday, is part of Ontario’s broader response to U.S. President Donald Trump’s recent 25% tariffs on Canadian and Mexican goods. The new measure is expected to generate between $300,000 and $400,000 in daily revenue and could add approximately CAD $100 per month to utility bills for American consumers in affected states.

Ford has taken a firm position against the tariffs, insisting that Ontario will not back down until they are removed completely.

“Until these tariffs are off the table, until the threat of tariffs is gone for good, Ontario will not relent. We will not back down,” Ford declared at Queen’s Park. “Pausing some tariffs and making last-minute exemptions won’t cut it. We need to end the chaos once and for all.”

The surcharge applies to electricity exported to New York, Michigan, and Minnesota, where Ontario supplies power to approximately 1.5 million homes and businesses. The Ontario government implemented the policy through an emergency amendment to the market rules governing the Independent Electricity System Operator (IESO), which oversees the province’s electrical grid.

Officials have noted that the surcharge is not capped at 25%, leaving room for potential increases with little notice. When asked if the province would raise the charge further should Trump impose additional tariffs after April 2, Ford did not rule out the possibility.

“If he (Trump) continues to attack our province and our country, taking jobs and families’ paycheques, taking food off their tables, I will do whatever it takes to maximize the pain against President Trump,” Ford asserted.

Ontario sells surplus electricity to the U.S. when domestic demand is low, primarily at night and on weekends. According to Energy Minister Stephen Lecce, Ontario exports approximately 12,000 megawatt hours of electricity annually to the U.S. The province is a net exporter by a factor of about 30, meaning it sells significantly more power than it imports.

Lecce emphasized that the surcharge could have widespread economic consequences beyond the three states directly receiving Ontario’s electricity.

“If a state like Michigan flows our power through their grid and sells it to Ohio or another state, that means the surcharge is going to be reverberated right across America,” Lecce explained.

The surcharge comes in response to Trump’s sweeping tariff measures, which initially applied to most Canadian goods but later included exemptions under the North American free trade pact—set to expire on April 2. Despite the temporary relief, Ontario has refused to withdraw its countermeasures, maintaining pressure on the U.S. administration.

Meanwhile, other provinces are considering similar measures. British Columbia Premier David Eby has signaled an openness to taxing electricity exports, suggesting that Ontario’s strategy may set a precedent for other regions.

With the April 2 deadline looming and U.S.-Canada trade tensions showing no signs of easing, Ontario’s firm stance could be just the beginning of a broader economic showdown between the two nations.