The Ontario government has officially applied a 25 per cent surcharge on all electricity exports to three U.S. states.
The additional tax, effective on Monday, will affect 1.5 million homes and businesses in Michigan, Minnesota and New York — costing up to $400,000 per day, the government said.
The move is part of Ontario’s initial suite of retaliatory measures against U.S. President Donald Trump’s tariffs on Canadian goods.
“President 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 a statement Monday.
“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.”
New market rules 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.
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The money, estimated to be between $300,000 to $400,000 a day, generated from the tax “will be used to support Ontario workers, families and businesses,” the government said.
Ford previously told media on Friday that he would still be moving forward with the U.S. electricity tax on Monday, even with a temporary tariff reprieve on many products put in place by the U.S. until April 2.
The move is one Ford and his team have publicly weighed since before Trump was sworn in — threatening to escalate further and cut power to 1.5 million U.S. homes and businesses if the economic battle continues.
Early last week, as the tariffs looked set to hit, a furious Ford said he would cut off energy to the U.S. “with a smile on my face,” before taking part in days of interviews with major U.S. networks like CNN and FOX News.
The Ontario government confirmed in its press release on Monday that if the U.S. escalates further it would “increase this surcharge at any time” or “cut off electricity exports to the U.S. completely.”
On March 4, ahead of implementing the tax, the Ontario government said Ford sent a letter to U.S. elected officials in all three states informing them the province would impose the surcharge on electricity as a result of Trump’s tariffs on Canadian goods.
Minnesota Gov. Tim Walz, whose state would be affected by extra energy charges from Canada, said he had spoken to Ford in order to “try to find a way through this unnecessary and costly trade war.”
“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,” said Stephen Lecce, Ontario’s minister of energy and electrification, on Monday.
The Ontario government said the surcharge is in addition to the federal government imposing an initial round of $30 billion in retaliatory tariffs.
Directed by Ford, the LCBO, one of the largest alcohol buyers in the world, has removed all products from the United States from its shelves which the Ontario government says costs American producers $1 billion in lost revenue.
More to come.
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Ontario officially hits U.S. with 25% electricity tax amid trade war
