Premier of Ontario Doug Ford responded to growing trade tensions between Canada and the United States by threatening that the province would end its energy exports to the United States in retaliation against the president-elect. Donald TrumpThe threat of drastic customs tariffs.
But what would it look like if Ontario and other provinces followed through on this threat?
Some experts say Canada doesn’t have much room to maneuver in the event of potential retaliation.
On Wednesday, Ford and other Canadian prime ministers met with Prime Minister Justin Trudeau to discuss the 25 percent tariffs that Trump threatened to impose on all Canadian imports on his first day in office, January 20, 2025.
After the meeting, Ford presented his own threat: “cutting off” the millions of U.S. residents living in border states from Ontario’s energy exports.
A map of Canada with the largest export for provinces and territories. Donald Trump announced that he would sign an executive order imposing 25% tariffs on all products entering the United States from Canada and Mexico.
“It would turn out the lights for a million and a half Americans,” Ford said. “If they come after us, we have to defend Canadians, we have to defend Ontarians. »
A spokesperson for the Independent Electricity System Operator (IESO), Ontario’s energy regulator, said discussions are ongoing.
“Active discussions are ongoing with the government on this matter and the IESO is unable to comment at this time,” IESO spokesperson Andrew Dow told Global News in a statement.
Drew Fagan, a professor at the Munk School of Global Affairs & Public Policy, said Canada may have more to lose than the United States in an energy war.
“I would be very careful about trying to get into an all-out war where they have a gun and we have a knife,” Fagan said.
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Fagan said risking a trade war with the United States, particularly in the energy sector, could put Canadian jobs at risk.
Canada’s two largest exports to the United States are crude oil and motor vehicles. Donald Trump announced that he would sign an executive order imposing 25% tariffs on all products entering the United States from Canada and Mexico.
“Tit for tat means we will damage our economy far more than we will damage their economy. And that means (a negative impact on) economic growth and employment. And when we talk about the energy sector, we talk about good, well-paying jobs,” he said.
Last month, Global News reported that according to documents filed with the BC Utilities CommissionBC Hydro imported 13,600 gigawatt hours of electricity in fiscal 2024, at a cost of nearly $1.4 billion.
Much of the electricity came from the United States and Alberta, where it was produced by burning fossil fuels.
Although three American states — mainly Michigan and New York, but also Minnesota — receive energy from Ontario, it does not represent the majority of their energy consumption.
According to IESO dataOntario sent 7,718 gigawatts of electricity to Michigan. However, the state produced 120,656 gigawatts electricity at the national level.
New York saw similar numbers, producing 124,039 gigawatts nationally and import 4,149 gigawatts from Ontario. Minnesota received 66 gigawatts from Ontario last year.
Alberta Premier Danielle Smith doesn’t share Ford’s enthusiasm about stopping energy exports to the United States.
Fagan said: “She (Smith) would not take this step because it would be something close to an economic Armageddon for her economy. Interestingly, Premier Ford did not suggest eliminating car numbers. He suggested an important (for Ontario) but secondary product.
On Thursday, Smith said: “Under no circumstances will Alberta agree to suspend its oil and gas exports. »
“I do not support tariffs on Canadian products and I do not support tariffs on American products. Because all this does is make life more expensive for ordinary Canadians and Americans,” she said.
In 2022, Canada’s largest export to the United States by value was crude oil, worth $152.6 billion. According to Statistics Canada, the United States accounted for 97.4 percent of Canada’s crude oil exports, with Alberta contributing 87.4 percent of the total volume exported to the United States.
Is Canada Ready for a Wider Tariff War?
Fagan warned that a trade battle with the United States may not be limited to the energy sector.
“What if they retaliated by doing something about cars, which are a much larger part of Ontario’s economy?”
Ontario is the largest exporting province to the United States, with exports to its southern neighbor amounting to $220.5 billion annually. Ontario’s most profitable export is motor vehicles at $36 billion, followed by gold at $17.66 billion.
With conflicts in the Middle East and Eastern Europe currently raging, Fagan said Canada could present itself as the best bet to meet U.S. energy needs.
“Who do you want to buy from?” You want to buy in Canada. We should trade more, not less, in all forms of energy,” he said.
Fagan said a bigger trade war would hurt Canada more.
“The Canadian economy is about the size of New York State. There is a huge imbalance,” he said.
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