A 25 per cent surcharge on all Ontario electricity exports to the United States is now in effect, with provincial officials estimating that the measure will cost providers south of the border up to $400,000 per day.
The surcharge is among a suite of countermeasures being taken by the Ontario government amid an ongoing trade war with the United States, including pulling U.S. booze off LCBO shelves.
In a news release issued on Monday morning, the province confirmed that “new market rules” are now in effect, which will require any generator selling electricity to the U.S. to add a 25 per cent surcharge, valued at $10 per megawatt-hour, to the cost of power.
Ontario currently supplies electricity to about 1.5 million homes and businesses in New York, Michigan and Minnesota.
“President [Donald] Trump’s tariffs are a disaster for the U.S. economy. They’re making life more expensive for American families and businesses,” Premier Doug Ford said in the release. “Until the threat of tariffs is gone for good, Ontario won’t back down. We’ll stand strong, use every tool in our toolkit and do whatever it takes to protect Ontario.”
Ontario says it is implementing the new surcharge through an “urgent amendment” to the market rules that apply to the Independent Electricity System Operator (IESO), which is the arms-length Crown corporation responsible for the province’s electrical grid.
Speaking on background, government officials say the regulatory authority provided to the IESO does not limit the surcharge to 25 per cent.
In fact, they say the Ontario government “retains the ability to increase or decrease the surcharge at any time in response to the actions of the U.S. administration.”
Ford has previously said he would consider doubling the export tax to 50 per cent should “the economic attack” on Canada continue, but has not specified under which circumstances such a measure might be taken.
Ford has also threatened to cut off electricity exports to the U.S. entirely.
"For decades, Ontario has powered American homes, factories, offices and jobs, and we will not stand by as our vital electricity exports are taken for granted,” Energy Minister Stephen Lecce said in the news release. “In a time where prices are going up for families in America, Canada and the United States should be working together to strengthen our trade and investment relationships to ensure a prosperous future for both sides of the border.”
The Ontario government says that the surcharge will generate revenue of $300,000 to $400,000 per day “which will be used to support Ontario workers, families and businesses.”
Trump implemented a sweeping 25 per cent tariff on most Canadian goods last week but, days later, agreed to exempt goods that fall under an existing North American free trade pact until April 2.
Ontario’s countermeasures, however, have remained in effect with a spokesperson for Ford’s office previously telling CP24 that they would not be rolled back until Trump drops the tariffs “entirely.”
Elsewhere, British Columbia Premier David Eby has expressed a willingness to at least consider taxing electricity exports.
Eby told CTV’s Question Period host Vassy Kapelos in an interview over the weekend that his province is “all in” on a united Team Canada approach to countering the tariffs, including blocking or taxing electricity from his province headed south.
“We are passing a law that will allow us to take measures that could impose export charges or restrict energy exports to the United States but that is a very significant step and we recognize that,” he said.