Premier Doug Ford has made good on his threat to slap a 25 per cent surcharge on electricity sold to the U.S. in retaliation for President Donald Trump‘s tariffs.
Raising an estimated $300,000 to $400,000 per day, the “tariff response charge” will be paid by utilities in New York, Michigan and Minnesota that import power from generators of electricity in Ontario.
“Until these tariffs are off the table, until the threat of tariffs is gone for good, Ontario will not relent,” Ford said Monday. “We will not back down … we will apply maximum pressure to maximize our leverage.”
Although Ford claimed the charge could add up to $100 monthly to household bills in the three states, it is difficult to say exactly because the power may be resold to other states.
But Gov. Tim Walz of Minnesota — a Democrat who visited Ford at Queen’s Park last year — said the retaliatory surcharge will hurt.
“The first victim’s of Trump’s trade war? Minnesotans struggling to pay their skyrocketing electric bill,” wrote Walz, who was the running mate to Democratic nominee Kamala Harris in the U.S. presidential election last November.
“Minnesota cannot afford Trump’s billionaire-run economy. We have to put a stop to this madness.”
Ford had warned the three governors of the pending move last week, and reiterated that he “will not hesitate to shut the electricity off completely” if Trump escalates the trade war.
The premier would not set a timeline for that possibility.
“Let’s just see how this rolls out. You know, (Trump) changes his mind literally every single day, so I just wouldn’t want to give you an exact date … I will do whatever I can to maximize the pain.”
If Ontario were to cut off power exports, it would dial back hydroelectric generation at plants like the one in Niagara Falls so the grid would not become imbalanced.
Ford acknowledged the three states could seek power from other U.S. states, but dismissed the likelihood.
“I guess anything is a possibility, but they wouldn’t be buying it off us if they could buy it off of a U.S. state,” he said.
Ford and Energy and Electrification Minister Stephen Lecce maintained the surcharge plan would not backfire in the summer if Ontario, as it has in the past, needs to import power from the U.S. to keep the lights on and air conditioners running in an extreme hot weather scenario.
Lecce said Ontario has “sufficient” generating capacity with nuclear, hydroelectric, natural gas and other sources “to dial up if we every need more power” and can buy power from Hydro-Québec under a mutual assistance agreement.
“We’ll make sure we have enough energy for ourselves,” Ford told a news conference where he was asked whether $400,000 in extra daily costs for American customers would have much impact.
“You should see the uproar about the alcohol,” he said in reference to American liquor, wine and beer being removed from LCBO shelves a week ago.
“They’re called kitchen table issues … we win them over, one at a time,” Ford added before going to CNN to draw attention to the electricity surcharge. “With the bourbon, it really caught the attention of the governor.”
Ford said Alberta Premier Danielle Smith should be ready to surcharge her province’s high volume of oil and gas exports south of the border, calling it a “trump card.”
“The Americans, all of a sudden their gas prices go up 90 (cents) to a dollar a gallon, they will lose their minds,” added Ford. “We need to at least put that in the window.”
To implement the surcharge on an estimated 1.5 million homes and businesses in the three states, the Ontario government filed an “urgent” regulation under the Electricity Act of 1998.
It amends the market rules used by the province’s Independent Electricity System Operator, which manages day-to-day energy needs.
Ford said his Progressive Conservative government can raise or lower the surcharge “at any time” in response to actions taken by the Trump administration.
The surcharge is priced at $10 per megawatt-hour, about 25 per cent of the cost of electricity. Money raised will go toward billions in financial supports Ford has promised to those impacted by the tariff war.
Ontario transmits electricity to the three states through 12 cross-border connections — seven with New York, four with Michigan and one with Minnesota.
