Mar 19, 2025
Earlier this month, Ontario Premier Doug Ford placed a 25% surcharge on electricity exports from Canada in retaliation to tariffs imposed on Canadian goods by the Trump administration
It was suspended after President Donald Trump threatened to double tariffs on steel and aluminum imports to 50%. However, the electricity surcharge, which would impact exports to Michigan, New York and Minnesota, is "always on the table," Ford said this week ahead of more discussions. "But the last thing I want to do is antagonize and everyone goes to war again."
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So how would this surcharge on electricity exported to the U.S. hurt customers? We look at the facts and how officials have responded.
The impact of Trump’s tariffs on the energy trade
Ontario currently exports electricity to Michigan, New York and Minnesota. Between 2021 and 2023, the province exported 14.6, 14.2 and 12.0 terawatt hours of electricity, respectively, to those states, according to the Ontario government.
"It made economic sense to build these transmission lines and to move power back and forth across the border," Cy McGeady, a fellow at the Center for Strategic and International Studies, told NPR. "If you disrupt that, the impact has to be upward pressure on prices and reduced reliability. That's what the fundamental risk is here."
Midcontinent Independent System Operator (MISO) — which oversees electricity management for 15 states, including Michigan — said that in 2024 only 1% of its energy came from Canada and less than half of that came from Ontario.
“Even though there’s a fair amount of electricity that moves through Michigan originating in Canada, very little of it is actually purchased by Michigan,” Dan Scripps, chair of the Michigan Public Service Commission, told Local 4 News.
Still, Scripps said that if Ford were to cut off electricity to the U.S., it would remove a layer of resilience, making the grid more vulnerable. “We saw what happens when those flows get disrupted, and then other things go wrong, back in 2003 with the blackout that covered New York City and all the way into Detroit and Ann Arbor,” he said.
“The first victims of Trump’s Trade war? Minnesotans struggling to pay their skyrocketing electric bill,” Minnesota Gov. Tim Walz said on X. “Minnesotans cannot afford Trump’s billionaire-run economy. We have to put a stop to this madness.”
The fact is Minnesota utilities would only be minimally affected by the Ontario tariffs, but Minnesota Power does source 11% of its power supply from the province of Manitoba.
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“The Ontario thing is a symptom, not the broader disease,” said Pete Wyckoff, a deputy commissioner for Walz’s Department of Commerce, to the Minnesota Star Tribune. “In a broader trade war with Canada that includes energy, Minnesota would be a huge loser because of our dependencies.”
The New York Independent System Operator (NYISO) said in a statement that a surcharge could ripple through the industry, leading to increasing costs and grid reliability issues.
“The U.S. and Canada have one of the most integrated electric grids in the world, allowing system operators in both countries to pool resources for improved reliability and economic efficiency,” it said. “The NYISO and neighboring system operators have serious concerns that applying export tariffs to electricity may have serious adverse effects on reliability and wholesale electric markets.”
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How trade tensions could affect your energy bill
Regardless of what happens, consumers can start taking steps to mitigate the impact of potentially higher energy bills. For example, you can look for ways to reduce energy consumption, from switching to LED bulbs and lowering the thermostat to washing laundry in cold water.
Check if your utility company offers time-of-use pricing and, if so, use power during off-peak hours to save money. You can also ask if they have any rebates, incentives or programs to help you save. For example, some utility companies will offer rebates to help offset the cost of upgrading to energy-efficient appliances, such as those with the Energy Star label, which can save you money over the lifespan of your appliances.
For longer-term solutions, you may want to invest in energy-efficient home improvements, such as sealing drafts around windows or installing proper insulation. You could also explore alternative energy options, such as geothermal heat pumps or solar energy systems; while there’s an initial upfront investment, they could help in the long run to lower your utility bill. You can check out this database of state incentives for renewables, by state.
But, with the on-again-off-again nature of the tariff war — and tariffs now targeted at the European Union — it may also be a good time to diversify investment strategies to cope with potential economic instability.
The situation is changing (seemingly on a daily basis), creating increased market volatility. While you may want to avoid making rash decisions, it could be a good time to talk to your financial adviser and consider diversifying investments across asset types, sectors and geographies, as well as building up an emergency fund if you don’t already have one.
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Vawn Himmelsbach is a veteran journalist who has been covering tech, business, finance and travel for the past three decades. Her work has been featured in publications such as The Globe and Mail, Toronto Star, National Post, Metro News, Canadian Geographic, Zoomer, CAA Magazine, Travelweek, Explore Magazine, Flare and Consumer Reports, to name a few.
