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By James Bickerton
News Reporter
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The effect of Ontario imposing a 25 percent surcharge on electricity sales to Michigan, Minnesota and New York is expected to "reverberate" across the wider U.S. grid, according to the province's Energy Minister Stephen Lecce.
On Monday, Ontario Premier Doug Ford announced the 25 percent surcharge in response to U.S. President Donald Trump introducing major new tariffs on Canadian goods. Trump's tariffs were initially 25 percent, excluding oil. However, the president later announced that some duties, including those on the motor vehicle industry, would be delayed for a month.
Why It Matters
During the 2024 presidential campaign, Trump pledged to renew growth in the American economy and bring inflation under control. He has argued that tariffs are necessary to raise revenue, support U.S. industry and stop foreign powers from taking advantage of the country.
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However, on Sunday, Trump refused to rule out the possibility of a recession, telling Fox News' Maria Bartiromo, "I hate to predict things like that." On Monday, the S&P 500 fell by 2.7 percent amid recession warnings, and many economists have warned that the new tariffs will increase inflation.
What To Know
"They need our power," Lecce said at a news conference on Monday, arguing that Ontario's electricity surcharge would have an impact beyond the three states to which it directly applies, particularly down the eastern I-95 corridor.
The energy minister added, "If a state like Michigan flows our power through [its grid] and, say, sells it … to Ohio that means the impact of this surcharge is going to reverberate right across America."
According to the Narwhal, a nonprofit Canadian media outlet, Ontario sells about $700 million in electricity to the United States each year, which provides power for 1.5 million homes. Ford estimated that his new surcharge would cost "families and businesses in these states up to $400,000 each and every single day."
Canadian government figures show that in 2020, Canada provided the U.S. with 93 percent of its electricity imports.
Which States Does Canada Supply Electricity To?
Analysis by the World's Top Exports website—based on figures from the CIA's World Factbook, International Trade Centre and U.S. Census Bureau—showed that 22 American states imported electricity from Canada in 2024.
Three states—Minnesota, Vermont and Washington—accounted for about 53 percent of the imports.
According to World's Top Exports, these states imported electricity from Canada last year: Minnesota, Vermont, Washington, New York, Maine, Michigan, Nevada, California, Arizona, Montana, Oregon, North Dakota, Idaho, Pennsylvania, Wyoming, Indiana, Utah, Nebraska, New Mexico, Alaska, Texas and Ohio.
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Can Canada Shut Off Electricity?
Theoretically, Canadian authorities could decide to shut off all electricity exports to the U.S. However, this would not be done by various provinces and territories acting independently, as happened this week with Ontario.
A complete shut-off would require coordination from the Canadian national government, which has given no indication that it is considering blocking all electricity exports to the U.S.
What Happens if Canada Shuts Off Electricity?
If Canada were to cut off all the electricity it supplies to the U.S., it would likely cause prices to surge significantly, with some states affected more substantially than others, and some shortages.
Such a move would likely infuriate the Trump administration and almost certainly spark more retaliatory measures from the U.S. Washington may also treat a 100 percent electricity cutoff by Canada as a national security issue.
What People Are Saying
Ontario Premier Doug Ford told reporters on Monday: "We will apply maximum pressure to maximize our leverage … Let me be clear: I will not hesitate to increase this charge if necessary. If the United States escalates, I will not hesitate to shut the electricity off completely. Believe me when I say I do not want to do this. I feel terrible for the American people because it's not the American people who started this trade war. It's one person who is responsible, that's President Trump."
U.S. President Donald Trump wrote on Truth Social on Monday: "Canada is a Tariff abuser, and always has been, but the United States is not going to be subsidizing Canada any longer. We don't need your Cars, we don't need your Lumber, we don't your Energy, and very soon, you will find that out. MAKE AMERICA GREAT AGAIN!!!"
What Happens Next
Many economists believe that if the trade war continues, it will cause economic damage to both Canada and the United States. It remains unclear whether negotiations between Ottawa and Washington will result in these tariffs being suspended or removed outright.
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