A worker walks past rows of power lines in Mississauga, Ontario, on Aug. 19, 2019, one of 37 electricity transmission networks that provides power to both sides of the border. Nathan Denette/The Canadian Press
Ontario’s decision to put a 25 percent surcharge on electricity exports to the United States on March 10 caused enough attention south of the border for U.S. President Donald Trump to vow to double the 25 percent aluminum and steel tariffs on Canada scheduled for March 12.
The province’s move, had it continued, would have racked up electricity bills to differing degrees in the three states that Ontario exports energy to: New York, Michigan, and Minnesota. But what would have been more concerning for the reliability of the grid is if Ontario Premier Doug Ford had gone further and followed through with his threat to cut off electricity altogether in response to U.S. tariffs.
The drama ended a day later, on March 11, with Ontario dropping the surcharge and the United States removing the additional 25 percent tariffs on aluminum and steel, and both sides claiming victory.
Ford said he decided to suspend the surcharge after U.S. Commerce Secretary Howard Lutnick offered him an “olive branch,” agreeing to meet on March 13 to discuss the USMCA free trade deal moving forward. The White House, for its part, said Trump used the “leverage of the American economy” to get Ontario to drop the tax and thus “deliver a win for the American people.”
Electricity Export Tax
Ford had said on March 10 that the 25 percent export tax, valued at $10 per megawatt-hour, would net Ontario an extra $300,000 to $400,000 per day, while adding roughly $100 per month to the impacted Americans’ bills.
The province said the surcharge, which ultimately only lasted a day, would affect 1.5 million homes and businesses in New York, Michigan, and Minnesota.
The New York Independent System Operator (NYISO), which oversees the state’s electric grid, said in a March 10 statement that it was analyzing the situation and working with Ontario’s Independent Electricity System Operator (IESO) “to ensure a reliable grid.”
However, in a Feb. 28 statement, the NYISO had said that “applying export tariffs to electricity may have serious adverse effects on reliability and wholesale electric markets.” The grid operator noted that its interties with the IESO allow for imports of up to 2,500 MW of power from Ontario and those with Hydro-Québec allows for additional imports of up to 2,100 MW.
In its February statement, the NYISO also said the Trump administration’s 10 percent tariffs on Canadian energy announced earlier this year “would likely amount to tens of millions of dollars per year.”
Ontario Premier Doug Ford holds a news conference in Toronto, Canada, on March 4, 2025. Nathan Denette/The Canadian Press via AP
Trump has said his first round of tariffs was meant to stop the flow of fentanyl and illegal immigration into the United States through its borders with Canada and Mexico. He has since paused some of those tariffs, which are 25 percent for all products except energy, while promising more tariffs to come related to any trade practices seen as disadvantageous to the United States. He has also gone ahead to impose 25 percent tariffs on steel and aluminum from all countries, including Canada, effective March 12.
Exports to New York, Michigan, Minnesota
The NYISO reported in 2024 that New York produced 124,153 gigawatt hours (GWh) of power in 2023, mostly from oil and gas, and consumed a total of 145,419 GWh when taking into account its energy exports and imports.
The state exported 13,445 GWh and imported 35,711 GWh in 2023, for a net import of 22,266 GWh of power, coming from nearby states and provinces. This included 3,976 GWh from Ontario and 2,652 GWh from Quebec. This suggests that 2.7 percent of the state’s power was sourced from Ontario in 2023.
Meanwhile, Ontario’s IESO statistics indicate 2023 was the lowest year for net exports to New York since 2011—3,976 GWh compared to 3,307 GWh. The year 2024 was more typical, when 6,269 GWh of net power exports went to New York.
Ontario currently transmits electricity with its five neighbours: Quebec, Manitoba, New York, Michigan, and Minnesota. It transmits power via 12 cross-border connections with the United States: seven with New York, four with Michigan, and one with Minnesota.
Power to Michigan and Minnesota are regulated by the Midcontinent Independent System Operator (MISO), which operates the electric grid in portions of 15 states from the U.S. Gulf Coast to the northern border with Canada, as well as in the province of Manitoba.
MISO spokesperson Brandon D. Morris told The Epoch Times on March 10 that Ontario’s decision to impose a 25 percent surcharge on electricity exports to the United States was being reviewed, but he suggested the impact on MISO is minimal.
President Donald Trump speaks to the press on the South Portico of the White House on March 11, 2025. Mandel Ngan/AFP via Getty Images
“In 2024, less than 1 percent of MISO’s total energy was supplied via Canadian imports and less than half of that came from Ontario,” Morris said. “For context, that amount is equivalent to approximately one power plant. MISO manages the loss of power plants like this every day to ensure reliability across our footprint.”
According to the U.S. Energy Information Administration (EIA), Minnesota produced a net power generation of over 57,276 GWh in 2023. Meanwhile, Ontario’s IESO stats indicate that Minnesota had net imports of just 193 GWh from the province that year, an amount equal to 0.3 percent of the state’s own domestic production.
The U.S. EIA reported that Michigan produced over 120,656 GWh of net power in 2023, while Ontario’s IESO stats say the state had net imports of 7,583 GWh from Ontario that year, equal to 6.3 percent of Michigan’s domestic production.
Spokesperson Matt Helms of the Michigan Public Service Commission told The Epoch Times that Ontario’s decision sparked “pricing and reliability concerns” across the energy sector but wouldn’t greatly affect prices.
“While the vast majority of Michigan’s electricity is either produced by the electric utilities or purchased under long-term power contracts, the imposition of these tariffs could have some impact on prices in the regional energy markets, though the ultimate impact on Michigan customers is likely to be small,” Helms said.
Threat to Cut Off Energy Exports
But what would be of main concern, Helms said, is if threats to cut off electricity exports are carried out.
“Of greater concern is the stability of the electric grid. There are significant flows across the border because of the interconnected grids between the two countries,” Helms said.
“Any action to limit or disrupt these flows would remove a layer of protection and make all of us—Canadians and Americans alike—more vulnerable to grid-scale outages.”
Premier Ford had said on March 10 and other occasions that he would consider cutting off power to the United States altogether as part of his actions to compel the Trump administration to drop the tariffs on Canada.
“Let me be clear, I will not hesitate to increase this charge if necessary,” he said. “If the United States escalates, I will not hesitate to shut the electricity off completely.”
The flags of Canada and the United States fly outside a hotel in downtown Ottawa, on Feb. 1, 2025. The Canadian Press/Justin Tang
Ottawa has also said cutting off Canadian energy exports to the United States is not off the table when it comes to Canada’s possible measures against the tariffs.
The United States imported over 27,000 GWh of electricity from Canada in 2024, according to the U.S. EIA, an amount that has trended down from over 65,000 GWh in 2016.
While Ford has asked Alberta Premier Danielle Smith to also use her province’s oil and gas exports as part of retaliatory measures against Trump’s tariffs, Smith has strongly rejected such suggestions, saying there “are much more effective ways” to deal with the situation.
Impacts
Barry Prentice, a professor of supply chain management at the University of Manitoba, says that electricity markets are very complicated and that determining how a 25 percent surcharge could impact prices could be complex.
“If you have to buy power from someplace else, or at the margin, maybe that power is more expensive,” Prentice told The Epoch Times.
Still, he says, there may be some exaggerations on the impacts in public commentary.
“I don’t think the impact is as great as might be suggested by some of the comments we’ve heard,” he said.
Akshaya Jha, assistant professor of economics and public policy at Carnegie Mellon University in Pittsburgh, says that had Ontario’s export tax remained in place, New York would have responded with more domestic production and interstate imports, but with higher costs.
“Rather than low-cost hydro, low-cost wind, solar, nuclear from Ontario, they’re having to then rely on higher-cost generation sources, either within New York or from their other domestic import partners,” Jha told The Epoch Times.
New York and Michigan both generated 46 percent of their electricity from natural gas-fired plants in 2023, while Ontario produces its power largely through nuclear (55 percent) and hydro (24 percent), followed by natural gas (8 percent) and solar (4 percent), based on 2021 figures.
Jha said an Ontario export tax would hurt American customers hardest when water levels are high and natural gas prices rise.
Transmission towers that carry high-voltage electricity are show in East China Township, Mich., on March 8, 2025. Bill Pugliano/Getty Images
He said Ontario’s move may lead to more natural gas-fired power production in the United States, a concern that Bloc Québécois leader Yves-François Blanchet has expressed, saying it may drive U.S. markets toward finding alternate solutions permanently and cutting out Canada.
“If you disrupt the habit of Americans sourcing energy from Quebec and Canada, once they have found other sources of supply, you will be in a very disadvantageous position to negotiate new contracts,” Blanchet said in January.
While rebuking Canada for Ontario’s decision on the electricity charge, Trump on March 11 asked why the United States would allow another country “to supply us with electricity, even for a small area.”
“And can you imagine Canada stooping so low as to use ELECTRICITY, that so affects the life of innocent people, as a bargaining chip and threat?” he wrote on social media.
Dan McTeague, president of Canadians for Affordable Energy and a former Liberal MP, says threats to cut energy exports or impose export taxes could be risky for Ontario.
“Electricity we sell is SURPLUS renewable hydro that we can’t afford to prevent from giving away to the U.S.,” he said on the X platform on March 11.
He added that the United States could cut off natural gas exports from Ohio and Pennsylvania into Ontario, or even cut off Enbridge’s Line 5 pipeline, which carries crude oil and natural gas liquids from Wisconsin to refineries in Ontario, among other locations, which produce energy products for regional markets.
Lee Harding
Author
Lee Harding is a journalist and think tank researcher based in Saskatchewan, and a contributor to The Epoch Times.
