Ontario strikes back: New energy export surcharge targets U.S. Tariffs
Department of Research, Studies and International News 11-03-2025
In a bold move against U.S. trade policies, Ontario has announced a 25% surcharge on electricity exports to New York, Michigan, and Minnesota. Premier Doug Ford declared that the province will not yield until President Donald Trump reverses his tariffs on Canadian goods.
Ford criticized Trump’s trade measures, calling them harmful to both the American and Canadian economies. “These tariffs are a disaster for the U.S. economy, driving up costs for American families and businesses,” he said in a statement. “Ontario will not stand by idly. We will use every available tool to protect our province’s economic interests.”
New Energy Levy to Counter U.S. Tariffs
Ontario has instructed its Independent Electricity System Operator (IESO) to enforce the surcharge, requiring power generators exporting electricity to the U.S. to apply an additional fee of 25%, or approximately $10 per megawatt-hour. This move is expected to generate between C$300,000 and C$400,000 (US$432,000 to US$576,000) per day in additional revenue.
The decision reflects Ontario’s firm stance against the Trump administration’s unpredictable trade policies, which have created economic uncertainty for both American and Canadian industries. The tariffs in question, which Trump has repeatedly introduced, withdrawn, and then reinstated, pose a significant threat to Ontario’s economy due to its extensive trade relations with the U.S.
Economic Repercussions and Political Maneuvering
Beyond electricity exports, Ontario has taken further steps to express its discontent with U.S. policies. Recently, the province scrapped a $100 million contract with Starlink, the satellite internet company owned by Elon Musk, who has played a significant advisory role in Trump’s administration. The cancellation has affected remote communities that were relying on Starlink for internet access.
Additionally, Ontario has joined other Canadian provinces in removing American alcoholic beverages, such as Jack Daniel’s whiskey, from store shelves. This action mirrors broader Canadian retaliation against the U.S. administration’s trade measures, which have also targeted Mexico and other long-standing American allies.
Ontario’s latest countermeasure underscores the escalating trade tensions between Canada and the U.S. While the surcharge on electricity exports is designed to mitigate economic losses caused by U.S. tariffs, it also signals Canada’s unwillingness to passively accept policies that disrupt cross-border trade.
As the trade dispute unfolds, the long-term consequences remain uncertain. However, one thing is clear: Ontario is determined to push back until the threat of U.S. tariffs is permanently lifted.
