As Trump Pushes Tariff War, Ford’s Electricity Bluff Loses Voltage

In the summer of 2003, a single software bug in an Ohio power plant cascaded into one of the largest blackouts in North American history, plunging most of Ontario and the northeastern United States into darkness. For many who experienced it, the blackout is fondly remembered as a time when ordinary people came together: neighbours directing traffic, impromptu block parties, stars suddenly visible in the night sky. But beyond the communal charm lay a more serious lesson: Ontario’s grid is deeply connected to those of its American neighbours. That grid, long a point of pride for Ontarians, has now become a political cudgel in US president Donald Trump’s trade war with Canada. Since before his inauguration this year, Trump has been threatening Canada with 25 percent tariffs on Canadian goods. In response, Ontario premier Doug Ford began almost immediately to threaten taxes on Ontario’s energy exports to the US. It’s not difficult to see this as a credible threat. Canada is, after all, the largest exporter of electricity to the US. Ontario has a lot to do with that. Energy flows constantly across its border with Minnesota, Michigan, and New York state—exports which help those states provide clean, reliable energy for their consumers and keep prices low.

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The only problem is that the US produces energy too, seven times more than Canada does, at 4.2 trillion kilowatt hours (kWh) a year—enough to power the entire country and then some. Their energy is dirtier (about 60 percent of American electricity comes from fossil fuels, whereas the same share of Canadian power is hydroelectric), and we might allow ourselves to feel smug about that—but it does not mean that weaponizing Canada’s energy exports, especially those from Ontario, will do much in a trade war. What it has allowed Ford to do is to recast himself as an anti-Trump figure, a protector of Canadian interests in the face of unprecedented threats to Canada’s sovereignty. Four days after Trump’s inauguration on January 20, Ford announced a snap provincial election, during which Trump’s tariff threats were a top voter issue. A month later, he won that election and continued to garner headlines in international publications like the Guardian and the BBC as a blunt-speaking Trump opponent. Central to this rewriting of Ford’s politics was his song and dance about retaliatory taxes on energy exports, allowing him to distance himself from the myriad ways he is ideologically aligned with Trump. Lest we forget, a version (admittedly less theatrical) of Trump’s program of cuts to the public service has already happened in Ontario under Ford. It is Ford whose austerity toward the province’s schools, universities, colleges, hospitals, paramedic services, and innumerable other vital public services has left them in historic and critical states of disrepair today. It was also Ford who, in 2018, during his first term as premier, abruptly cancelled more than 750 renewable-energy contracts. He argued the projects were unnecessary and claimed the decision would save taxpayers $790 million. In reality, tearing up the contracts cost more than $200 million in legal fees and decommission fees—and brought Ontario’s wind and solar power development to a grinding halt. The long-term consequences weren’t just financial. Four years later, as The Narwhal reported, Ontario found itself sliding into an energy-supply crisis, forced to scramble for solutions in a grid now less prepared for a low-carbon future. Ford picked a fight with Trump over energy exports because the illusion of leverage was all he needed. But anyone who looked at the books knew it was a bluff. In some ways, the real surprise isn’t that Ford played it tough. It’s how little he had to back it up. Not only can the US survive without Ontario electricity but, for over two decades, Ontario has maintained a lopsided electricity-sharing relationship with Minnesota, Michigan, and New York. At the heart of this arrangement is something known as a “spot market,” a system that allows buyers to purchase electricity as needed, according to real-time fluctuations in supply and demand, through the Independent Energy System Operator, or IESO, the Crown corporation overseeing the province’s grid. The flexibility of this setup allows Ontario to offload surplus electricity, often generated at night or during seasonal lulls in demand, and helps those states keep energy prices low for their residents. But while it spares the province from wasting power, it can force Ontario to sell electricity at prices far below its real value—sometimes even at a loss. A report by the Ontario Society of Professional Engineers found that in 2016 alone, the province effectively subsidized US consumers with nearly half a billion dollars in underpriced electricity. What was framed as a win-win for both partners now looks more like a long-standing bargain that’s cost Ontario taxpayers dearly. Quebec, on the other hand, has fixed long-term energy contracts with Vermont and New England. These contracts mean that Quebec is responsible for exporting a set amount of energy to these states (providing a quarter of Vermont’s electricity needs and a tenth of New England’s), but also that it can charge a fair price for these exports. It built the infrastructure to support these contracts—including a dedicated line to Vermont and New Hampshire—back in the 1980s, sharing costs with the states in exchange for these long-term contracts that promised a dedicated supply of clean energy for decades to come. So successful was this agreement that all parties renewed their contracts into the 2030s, and in 2022, Quebec reported their highest “net income ever recorded.” In the years since, that income has come down somewhat due to low rainfall, increased domestic demand, and a series of other factors. But the bottom line is that Quebec still has long-term energy commitments to fulfill to the partnering states, with whom it has had a perfectly profitable working relationship through the tenures of half a dozen American presidents before Trump. This year, Hydro-Quebec is expected to complete the New England Clean Energy Connect project, an interconnection between the province’s grid and New England’s that is set to supply the state with 9.45 terawatt hours of energy annually for the next twenty years, enough to power 1.2 million homes. As Quebec premier François Legault has said, the idea of imposing a surcharge on energy exports from Quebec is moot—the nature of Quebec’s long-term contracts with the neighbouring states is such that the province’s electricity exports are locked in at a fixed price. Legault has said that while he has not ruled out changing those contracts, it is not his first choice for a response. But because these states have come to depend on Quebec for a significant portion of their electricity consumption, the province has the kind of leverage that could do some real damage, albeit temporarily, to their power supply—the kind of leverage Ford has been bluffing about Ontario having. Using this leverage, however, would mean punishing the residents of a handful of states that all voted against Trump, jeopardizing decades of successful and ongoing cross-border infrastructure development and significantly destabilizing the region’s energy market. Worse, it would distract from the most pressing challenge both provinces face: generating enough energy to meet an explosion of demand on the horizon. To date, Ontario has imposed its energy-export tax only once, on March 10, and rescinded it a day later, when Trump threatened to double his tariffs on Canadian steel and aluminum. Trump himself has been dismissive of Ford’s threats to cut off the power, saying, when asked about it, “that’s OK if he does that, that’s fine.” New York City also released a statement following Ford’s order, saying they expect “to have adequate reserves to meet reliability criteria and forecasted demand.” Since then, Ford has pulled back from his crusade to weaponize the province’s energy, realizing perhaps that it will do little to contain the mercurial impulses of the current American president. This is probably for the best, especially if Ontario is to meet its surging energy demand—projected to grow by 75 percent by 2050. Ford’s threats to weaponize energy exports may have earned international headlines, but they’ve done little to address the real crisis at home: a province scrambling to rebuild the very infrastructure it once gutted. Last August, Ontario announced 5,000 megawatts worth of procurement contracts, and just this past year, it announced plans to refurbish its Pickering nuclear power plant to produce another couple thousand megawatts of energy by the mid-2030s. Ensuring that the province can retain a reliable supply of energy for the next few decades means investing in the power grid now. Should he fail, the province won’t be in a position to cut off its neighbours. It will be forced to depend on them. The post As Trump Pushes Tariff War, Ford’s Electricity Bluff Loses Voltage first appeared on The Walrus.