Ontario has implemented a 25% surcharge on electricity exports to the United States, affecting approximately 1.5 million homes and businesses in Michigan, Minnesota, and New York. This measure, effective March 10, 2025, is a direct response to U.S. President Donald Trump’s recent tariffs on Canadian goods.
Premier Doug Ford announced the surcharge, stating that it could generate between CAD 300,000 to CAD 400,000 daily, funds intended to support Ontario workers, families, and businesses. He emphasized that while he regrets the impact on American consumers, the action targets the U.S. administration’s trade policies. Ford also warned of the possibility of further measures, including halting electricity exports entirely if the situation escalates.
The surcharge requires electricity generators to add approximately CAD 10 per megawatt-hour to the cost of power sold to the U.S. This increase is expected to add around CAD 100 per month to the bills of affected American consumers.
In response, U.S. officials have expressed concern over potential impacts on energy costs and grid reliability. New York Governor Kathy Hochul has ordered a review of the tariffs’ potential effects on energy prices.
Minnesota Governor Tim Walz criticized the trade war, expressing concerns over potential future tariffs on essential products like potash fertilizer.
The U.S. imports a portion of its electricity from Canada, with New York sourcing about 4.4% of its total electricity from Canadian imports in 2023. Minnesota and Michigan import smaller percentages, according to data from regional grid operators.
This development marks a significant escalation in trade tensions between the U.S. and Canada, with both sides implementing measures that could have lasting impacts on their economies and consumers.
Breaking supply chain news is just a click away at The Supply Chain Report. Enhance your knowledge of international trade at ADAMftd.com with free tools.
#OntarioElectricitySurcharge #USCanadaTradeTensions #EnergyPolicy #ElectricityExports #OntarioEconomy
