Ontario slaps 25% tax increase on electricity exports to US in response to Trump's trade war
TORONTO (AP) — Ontario's premier, the leader of Canada's most populous province, announced that effective Monday it is charging 25% more for electricity to 1.5 million American homes and businesses in response to U.S. President Donald Trump's trade war.
Ontario provides electricity to Minnesota, New York and Michigan.
'I will not hesitate to increase this charge. If the United States escalates, I will not hesitate to shut the electricity off completely,' Ontario Premier Doug Ford said at a news conference in Toronto.
"Believe me when I say I do not want to do this. I feel terrible for the American people who didn't start this trade war. It's one person who is responsible, it's President Trump.'
Ford said Ontario's tariff would remain in place despite the one-month reprieve from Trump, noting a one-month pause means nothing but more uncertainty. Quebec is also considering taking similar measures with electricity exports to the U.S.
Minnesota says Ontario tariff will have minimal impact
Minnesota receives only a small share of its electricity from Ontario, but Democratic Gov. Tim Walz was sharply critical of Trump's actions that led to Monday's announcement from Ford.
'The first victims of Trump's Trade war? Minnesotans struggling to pay their skyrocketing electric bill,' Walz said on X with a link to a story about Ontario's move. 'Minnesotans cannot afford Trump's billionaire-run economy. We have to put a stop to this madness.'
In a brief press availability later Monday, Walz acknowledged that Minnesota doesn't get a lot of electricity from Ontario, but he's worried about Manitoba following suit.
'So look, even if it were one megawatt, this is totally unnecessary. And the fact of the matter is, it doesn't impact Donald Trump one bit. It impacts ratepayers in Minnesota. For what? These are our friends,' he said.
Walz said he's even more worried about the impact on Minnesota if Canadian potash fertilizer gets caught up in the trade war. 'If it starts with this, the one that I'm really worried about is potash, when it comes behind it. If they do potash, that's a big one on agriculture,' he said.
Walz said he discussed these concerns last week when he spoke with the premiers of Ontario and Manitoba. He said they told him the dispute is broader than just their trading relations with Minnesota.
'They were very clear that it's not Minnesota -- we're huge trading partners.'
Minnesota Power, the main electrical utility serving the part of Minnesota that borders Ontario, gets only a 'very small' proportion of its power from the province, company spokesperson Amy Rutledge said.
Minnesota Power bought only about $300,000 worth of electricity from Ontario last year, and only for four months out of the year. The utility serves over 150,000 customers, mostly with power it generates itself in Minnesota, she said. While it gets about 11% of its power supply from Manitoba Hydro, she said, that's not affected by Ontario's announcement.
'We really expect any impact on our customers to be negligible,' Rutledge said.
Midcontinent Independent System Operator, the organization that manages a regional power grid that stretches from Manitoba to Minnesota to Louisiana, also expects little effect, spokesman Brandon Morris said. MISO gets under half its power from Canada, and less than half of that comes from Ontario, he said.
Michigan worries about reliability of electric grid now
Matt Helms, public information of officer for the Michigan Public Service Commission, said the impact on Michigan customers is likely to be 'small' and most of Michigan's electricity is produced by utility companies in the state or through long-term contracts.
Of greater concern to the commission is the reliability of the electric grid, as electricity flows between the U.S. and Canada as part of an interconnected grid.
'Any action to limit or disrupt these flows would remove a layer of protection and make all of us — Canadians and Americans alike — more vulnerable to grid-scale outages,' Helms said.
In New York, Gov. Kathy Hochul said she has ordered state energy officials to conduct a review on how much the tariffs could drive up electricity and other energy costs in the state.
'These federal tariffs have been poorly conceived from the start: crafted in secret with no transparency and no clear economic rationale, they've only served to destabilize our capital markets and create uncertainty among New York families and businesses,' said Hochul, a Democrat.
Trade war intensifies
The new surcharge is in addition to the federal government's initial $30 billion Canadian dollars ($21 billion) worth of retaliatory tariffs applied on items like American orange juice, peanut butter, coffee, appliances, footwear, cosmetics, motorcycles and certain pulp and paper products.
Trump launched a new trade war last week by imposing tariffs against Washington's three biggest trading partners, drawing immediate retaliation from Mexico, Canada and China and sending financial markets into a tailspin.
'It needs to end. Until these tariffs are off the table, until the threat of tariffs is gone for good, Ontario will not relent,' Ford said.
___
Associated Press writer Steve Karnowski in St. Paul, Isabella Volmert in Lansing, Michigan and Anthony Izaguirre in Albany, New York contributed.
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