Ontario Implements 25% Surcharge on Electricity Exports to the U.S.

Ontario Imposes 25% Surcharge on Electricity Exports to the U.S. in Response to Tariffs

Effective today, the Ontario government has implemented a 25% surcharge on all electricity exports to the United States as part of its response to U.S. tariffs on Canadian goods. The measure is expected to impact 1.5 million homes and businesses in Michigan, Minnesota, and New York, with estimated costs reaching up to $400,000 per day.

“President Trump’s tariffs are a disaster for the U.S. economy, making life more expensive for American families and businesses,” said Premier Doug Ford. “Ontario won’t back down. Until the threat of tariffs is gone for good, we will stand strong and use every tool available to protect our workers and businesses.”

Under the new market rules, electricity generators exporting power to the U.S. must now include a 25% surcharge—equivalent to $10 per megawatt-hour (MWh). The revenue generated, estimated at $300,000 to $400,000 per day, will be directed towards supporting Ontario workers, families, and businesses.

The Ontario government has also indicated its willingness to escalate the response if necessary, including the possibility of increasing the surcharge or cutting off electricity exports entirely should the U.S. introduce further trade barriers.

“For decades, Ontario has powered American homes, factories, and offices. We will not stand by as our electricity exports are taken for granted,” said Stephen Lecce, Minister of Energy and Electrification. “Now is the time for Canada and the U.S. to strengthen our trade relationship rather than impose costly tariffs that hurt families on both sides of the border.”

This measure follows Canada’s initial round of $30 billion in retaliatory tariffs. Additionally, Ontario has taken further action by directing the LCBO, the world’s largest alcohol buyer, to remove all U.S. products from its shelves, resulting in an estimated $1 billion in lost revenue for American producers. The province has also banned U.S. companies from participating in approximately $30 billion worth of annual government procurement contracts.

Quick Facts:

• Ontario exports electricity to Michigan, New York, and Minnesota.
• From 2021 to 2023, the province exported 14.6, 14.2, and 12.0 terawatt hours of electricity to the U.S., respectively.
• Ontario has 26 transmission connections with neighboring jurisdictions, including 11 with Quebec, 3 with Manitoba, 1 with Minnesota, 4 with Michigan, and 7 with New York.

This surcharge is part of Ontario’s broader strategy to push back against U.S. tariffs and protect its economic interests.