Ontario has introduced a 25% surcharge on all electricity exports to the United States, with Premier Doug Ford warning that he is prepared to increase the charge—or even halt exports entirely—if trade tensions escalate further.
The new tariff is part of a broader retaliatory strategy against U.S. President Donald Trump’s recent trade measures, which include 25% tariffs on Canadian and Mexican goods.
Ontario’s Response: A New Electricity Export Tax
The Ontario government confirmed on Monday that new regulations now require electricity generators exporting power to the U.S. to apply an additional charge of $10 per megawatt-hour. The move is expected to generate between $300,000 and $400,000 per day in revenue for Ontario while adding about $100 per month to some American utility bills.
Ontario currently supplies electricity to approximately 1.5 million homes and businesses across New York, Michigan, and Minnesota.
Premier Ford vowed to maintain or increase the surcharge until the U.S. removes its tariffs, calling for a clear and permanent resolution rather than temporary exemptions.
“We will not back down. Pausing tariffs or offering last-minute exemptions won’t cut it. Ontario will keep up the fight and apply maximum pressure,” Ford said at a press conference in Queen’s Park.
The surcharge was implemented through an urgent amendment to the market rules governing the Independent Electricity System Operator (IESO), which oversees Ontario’s electricity grid. Notably, the IESO has the authority to raise the surcharge further at short notice.
When asked whether the province would increase the fee if the U.S. imposes new reciprocal tariffs on April 2, Ford left the door open for further action.
“Trump changes his mind every single day, so I can’t give you an exact date,” he said. “But make no mistake—if he continues attacking our province and our country, I will do whatever it takes to maximize the pain against President Trump.”
Potential Nationwide Impact on U.S. Electricity Markets
Ontario exports surplus electricity when its grid produces more than residents require, primarily during nights and weekends.
Energy Minister Stephen Lecce emphasized Ontario’s significant role as a net exporter of electricity, supplying about 12,000 megawatt-hours annually to the U.S. He noted that some of this electricity is resold to other U.S. states, meaning the surcharge could affect Americans beyond New York, Michigan, and Minnesota.
“If Michigan transmits our power to Ohio or another state, the surcharge will ripple across the U.S.,” Lecce explained.
Could Alberta Join the Fight with an Oil Tax?
The Ford government’s move aligns with actions being considered by other Canadian provinces. British Columbia is exploring similar measures, and Ford has urged other provinces—including New Brunswick, Manitoba, Quebec, and British Columbia—to take action against the U.S.
Ford also hinted that Alberta could leverage its oil exports as a pressure point in the trade dispute.
Alberta Premier Danielle Smith recently described her province’s energy exports as a “trump card” in negotiations with the U.S. Ford seized on her remarks, suggesting that Alberta consider imposing an oil export tax.
“Remember the 4.3 million barrels of oil coming from Alberta? If Premier Smith decided to impose an export tax, it would be a game-changer. Imagine if gas prices in the U.S. suddenly jumped by a dollar per gallon—they would lose their minds,” Ford said.
While Smith has not indicated a willingness to pursue an oil export tax, Ford’s comments reflect growing pressure on Canadian leaders to use economic leverage against the U.S.
Where Will Ontario’s Revenue Go?
The Ontario government has stated that all revenue from the new electricity export tax will be directed toward supporting workers, families, and businesses in the province.
As the trade dispute intensifies, Ontario’s latest move signals a firm stance against U.S. tariffs and a willingness to escalate economic countermeasures if necessary.
