Ontario Announces 25% Increase in Electricity for U.S. Customers

Photo credit: Nathan Denette/AFP

In a bold move amid escalating trade tensions, Ontario, Canada's most populous province, has announced a 25% surcharge on all electricity exports to the United States.

This measure, effective as of March 10, 2025, is a direct response to the Trump administration's recent tariffs on Canadian products.

The surcharge will impact consumers and businesses in Michigan, Minnesota, and New York, affecting approximately 1.5 million U.S. homes and businesses. Ontario's government estimates that this new fee will generate between CA$300,000 to CA$400,000 (US$208,000 to US$277,000) in daily revenue, which will be allocated to support Ontario's workers, families, and businesses.

Ontario Premier Doug Ford, who has been vocal in his opposition to President Trump's trade policies, stated, "President Trump's tariffs are a disaster for the U.S. economy. They're making life more expensive for American families and businesses." Ford emphasized that Ontario would not back down until the threat of tariffs is permanently removed, vowing to "use every tool in our toolkit and do whatever it takes to protect Ontario".

The impact on American consumers is expected to be significant, with Ford estimating an increase of about CA$100 (US$69) per month in electricity bills for those affected. This surcharge comes despite President Trump's recent announcement of a one-month delay on most tariffs against Canada and Mexico. Ford insisted that the surcharge would remain in place, arguing that a temporary pause only creates more uncertainty.

The Michigan Public Service Commission has expressed concerns about the surcharge, citing potential impacts on both pricing and reliability. However, they noted that the ultimate effect on Michigan customers is likely to be minimal due to the state's reliance on locally produced electricity and long-term power contracts.

This electricity surcharge is part of a broader Canadian response to U.S. tariffs. It adds to Canada's initial CA$30 billion (US$21 billion) worth of retaliatory tariffs on various American products, including orange juice, peanut butter, appliances, and certain pulp and paper products.

As tensions continue to rise, Ford has not ruled out further action. He warned that if the United States escalates the situation, he would consider completely cutting off electricity exports to the affected states. This ongoing dispute highlights the complex interdependencies between the two nations and the potential far-reaching consequences of trade conflicts on both sides of the border.