(The Hill) – The government of Ontario is applying a 25 percent surcharge starting Monday on electricity exports to three U.S. states in response to U.S. tariffs on Canada.
This surcharge will affect electricity sales for 1.5 million homes and businesses across Michigan, Minnesota and New York, the Ontario government said. In total, it could cost up to $400,000 per day.
New market rules are going into place requiring Canadian electricity sellers to add a $10 per megawatt-hour surcharge, equivalent to a quarter of the electricity’s average value, to the cost of power for sales to the U.S., according to a statement from Ontario’s office of the Premier.
The additional charges are a response to 25-percent tariffs on Canadian and Mexican imports to the U.S. announced last week by the Trump administration.
Stock markets dropped again on Monday as investors worried about the growing trade war. The Dow Jones average was down more than 550 points, or 1.3 percent, just after noon on Monday.
Trump has taken a few steps to soften the blow of his taiffs.
Following the initial announcement, Trump exempted carmakers from the tariffs and then delayed them for a month for goods covered under the U.S.-Mexico-Canada Agreement, the update to the North American Free Trade Agreement (NAFTA) that Trump renegotiated during his first term.
“We will not stand by as our vital electricity exports are taken for granted,” said Stephen Lecce, Canada’s Minister of Energy and Electrification. “In a time where prices are going up for families in America, Canada and the United States should be working together to strengthen our trade and investment relationships.”
The U.S. is Canada’s only trading partner for electricity, and the Canadian and U.S. electrical grids are highly integrated. In 2023, net electricity exports from Canada to the U.S. were 27.6 terawatt hours and came mostly from the provinces of Manitoba, Ontario, British Columbia and Quebec, according to the Canadian Energy Regulator.
The regulatory order from Ontario’s executive council says that the U.S. is ignoring the rule of law by imposing the tariffs on Canada. Similar claims have been made by China with regard to World Trade Organization rules following the doubling of U.S. tariffs on China.
The regulation also says that “tariffs pose an existential threat to hundreds of thousands of jobs and whole sectors of the Ontario economy.”
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