Ontario slaps 25% tax increase on electricity exports to US in response to Trump's trade war

"Believe me when I say I do not want to do this. I feel terrible for the American people who didn't start this trade war. It’s one person who is responsible, it’s President Trump.”

Ford said Ontario's tariff would remain in place despite the one-month reprieve from Trump, noting a one-month pause means nothing but more uncertainty. Quebec is also considering taking similar measures with electricity exports to the U.S.

Minnesota says it will have a minimal impact

Minnesota receives only a small share of its electricity from Ontario, but Democratic Gov. Tim Walz was sharply critical of Trump's actions that led to Monday’s announcement from Ford.

“The first victims of Trump’s Trade war? Minnesotans struggling to pay their skyrocketing electric bill,” Walz tweeted with a link to a story about Ontario’s move. “Minnesotans cannot afford Trump’s billionaire-run economy. We have to put a stop to this madness.”

But Minnesota Power, the main electrical utility serving the part of Minnesota that borders Ontario, gets only a “very small” proportion of its power from the province, company spokesperson Amy Rutledge said.

Minnesota Power bought only about $300,000 worth of electricity from Ontario last year, and only for four months out of the year. The utility serves over 150,000 customers, mostly with power it generates itself in Minnesota, she said. While it gets about 11% of its power supply from Manitoba Hydro, she said, that’s not affected by Ontario’s announcement.

“We really expect any impact on our customers to be negligible,” Rutledge said.

Midcontinent Independent System Operator — the organization that manages a regional power grid that stretches from Manitoba to Minnesota to Louisiana — also expects little effect, spokesman Brandon Morris said. MISO gets under half its power from Canada, and less than half of that comes from Ontario, he said.

Ford's office said the new market rules require any generator selling electricity to the U.S. to add a 25% surcharge. Ontario's government expects it to generate revenue of $300,000 Canadian dollars ($208,000) to $400,000 Canadian dollars ($277,000) per day, “which will be used to support Ontario workers, families and businesses.”

The new surcharge is in addition to the federal government's initial $30 billion Canadian dollars ($21 billion) worth of retaliatory tariffs applied on items like American orange juice, peanut butter, coffee, appliances, footwear, cosmetics, motorcycles and certain pulp and paper products.

Trade war intensifies

Trump launched a new trade war last week by imposing tariffs against Washington's three biggest trading partners, drawing immediate retaliation from Mexico, Canada and China and sending financial markets into a tailspin.

Trump later said he has postponed 25% tariffs on many goods from Canada and Mexico for a month, amid widespread fears of a broader trade war.

Ford estimated it will add about $100 Canadian dollars ($69) a month to the bills of each American affected.

“It needs to end. Until these tariffs are off the table, until the threat of tariffs is gone for good, Ontario will not relent,” Ford said.

Trump has urged U.S. automakers to move auto production from Canada and Mexico to the U.S. Last week Trump granted a one-month exemption to 25% tariffs on vehicles and auto parts traded through the North American trade agreement USMCA after speaking with leaders of automakers Ford, General Motors and Stellantis. Ontario is the auto sector hub of Canada.

Premier Ford also noted Trump is threatening Canada with steel, aluminum and dairy tariffs.

“I will do whatever it takes to maximize the pain against Americans,” Ford said.

Ford calls for export taxes on Canadian oil

Trump's trade war and his talk of making Canada the 51st U.S. state have infuriated Canadians, who are booing the American anthem at NHL and NBA games. Some are canceling trips south of the border, and many are avoiding buying American goods when they can.

Ford said the Canadian province of Alberta should agree to put an export tax on oil. Alberta provides 4.3 million barrels of oil a day to the U.S.

“You want to talk about a Trump card. That will instantly change the game," Ford said. “I know the Americans. If all of a sudden their gas prices go up a dollar a gallon they will lose their minds.”

Despite Trump’s claim that the U.S doesn’t need Canada, nearly a quarter of the oil America consumes per day comes from Canada. About 60% of U.S. crude oil imports are from Canada, and 85% of U.S. electricity imports as well.

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Associated Press writer Steve Karnowski in St. Paul contributed to this report.

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