Ontario Premier Doug Ford has responded to rising trade tensions between Canada and the United States by threatening that the province may cut off energy exports to the United States in response to President-elect Donald Trump’s threat to impose sweeping 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 operate when it comes to potential retaliation.
On Wednesday, Ford and other Canadian prime ministers met with Prime Minister Justin Trudeau to discuss the 25 per cent tariffs that Trump has threatened to impose on all Canadian imports on his first day in office, which will be January 20, 2025.
After the meeting, Ford offered a threat of his own: to “cut off” millions of American residents living in the border states from Ontario’s energy exports.
Map of Canada with largest exports to provinces and territories. Donald Trump said he will sign an executive order imposing 25% tariffs on all products coming into the United States from Canada and Mexico.
“This is going to turn off the lights for 1.5 million Americans,” Ford said. “If they attack 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 currently ongoing.
“There are active discussions ongoing with the government about this matter, and IESO is not in a position to comment at this time,” IESO spokesman Andrew Dow told Global News in a statement.
Drew Fagan, a professor at the Munk School of Global Affairs and Public Policy, said Canada may lose more from the energy war than the United States.
“I would be very cautious about trying to get into a full-blown 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, especially in the energy sector, could put Canadian jobs at risk.
Canada’s largest exports to the United States are crude oil and automobiles. Donald Trump said he will sign an executive order imposing 25% tariffs on all products coming into the United States from Canada and Mexico.
“Retaliation means we will harm our economy much more than we will harm their economy. This means (a negative impact) on economic growth and jobs. When we talk about the energy sector, we are talking about good, high-paying jobs.”
Last month, Global News reported that according to Documents filed with the British Columbia Utilities CommissionBC Hydro imported 13,600 gigawatt hours of electricity in fiscal year 2024, at a cost of approximately $1.4 billion.
Much of the energy came from the United States and Alberta, where it was generated by burning fossil fuels.
While three US states – primarily Michigan and New York, but also Minnesota – get power from Ontario, they do not account for the majority of their energy consumption.
according to ISO dataOntario sent 7,718 gigawatts of power to Michigan. However, the state produced 120,656 gigawatts of electricity locally.
New York had similar production numbers 124,039 gigawatts locally And importing 4,149 gigawatts from Ontario. Minnesota received 66 gigawatts from Ontario last year.
Among the premiers who do not share Ford’s enthusiasm for cutting energy exports to the United States is Alberta Premier Danielle Smith.
“She (Smith) wouldn’t take that step because it would be close to an economic disaster for her economy,” Fagan said. “Interestingly, Premier Ford did not propose cutting cars. He proposed a product that is important (for Ontario) but a secondary one.”
“Under no circumstances will Alberta agree to cut off oil and gas exports,” Smith said Thursday.
“I do not support tariffs on Canadian goods and I do not support tariffs on American goods. Because all it does is make life more expensive for ordinary Canadians and Americans,” she said.
As of 2022, Canada’s largest export to the United States by value is crude oil, valued at $152.6 billion. According to Statistics Canada, the United States accounted for 97.4 percent of Canadian crude oil exports, with Alberta contributing 87.4 percent of the total volume of exports to the United States.
Is Canada ready for a broader tariff war?
Fagan warned that the tit-for-tat trade war with the United States may not be limited to the energy sector.
“What if they retaliate for his retaliation by doing something about cars, which are a much larger part of Ontario’s economy?”
Ontario is the most valuable exporting province to the United States, with exports to its southern neighbor amounting to $220.5 billion annually. Ontario’s most valuable export is automobiles, valued at $36 billion, followed by gold, valued at $17.66 billion.
With conflict currently raging in the Middle East and Eastern Europe, Fagan said Canada could present itself as the best bet to meet the United States’ energy needs.
“Who do you want to buy from? You want to buy from Canada. We should be trading more in all forms of energy, not less.”
Fagan said a bigger trade war would hurt Canada more.
“The Canadian economy is roughly the size of New York State. There is a huge imbalance,” he said.
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