In response to recent US tariffs on Canadian goods, Ontario imposed a 25% levy on electricity exports to New York, Michigan, and Minnesota. This proposal is expected to increase daily revenue by $208,000 to $277,000, with monies going to help Ontario’s workers, families, and companies.

On February 1, 2025, President Donald Trump issued executive orders imposing a 25% tariff on all imports from Mexico and Canada, with a reduced 10% tariff targeting Canadian energy exports, including electricity. These tariffs, which were originally scheduled to go into effect on February 4, were momentarily delayed due to talks but were eventually implemented on March 4, 2025.

In direct response to these U.S. tariffs, Ontario’s Premier Doug Ford imposed a 25% tax on energy exports to the adjacent U.S. states of New York, Michigan, and Minnesota. Ford expressed regret over the impact on American consumers but emphasized the necessity of protecting Ontario’s economic interests.

The surcharge imposes a $7 per megawatt-hour fee on energy exports to the affected states. This is expected to generate between $208,000 and $277,000 per day, strengthening Ontario’s support for its local communities.

While the fee tries to combat U.S. tariffs, its direct effect on electricity bills in New York, Michigan, and Minnesota may be minimal. These states import relatively modest amount of their electricity from Ontario and have access to alternative energy sources, potentially reducing large price hikes for consumers.

Ontario’s action is part of Canada’s retaliatory steps in reaction to US trade policies. The growing tariffs have strained economic relations between the two countries, potentially affecting a variety of companies and customers across the border.

The 25% tax on power exports from Ontario to select US states demonstrates the practical consequences of ongoing trade tensions. While the immediate impact on US electricity users may be mitigated by existing energy infrastructures, the scenario demonstrates the interconnectivity of international trade policies and local economies.