Threat to tariff or cutoff U.S. energy stays on the table as Ford heads to Washington

As Ontario Premier Doug Ford heads to Washington, D.C. for a meeting at the White House, his threat to tariff or cut off U.S. energy remains on the table and could return after the high-stakes date.

Ford and his team are set to fly in and out of the U.S. capital on Thursday for a meeting with President Donald Trump’s commerce secretary, Howard Lutnick. The result of those talks could calm or reignite trade tensions.

The meeting comes after a whirlwind week in which Ontario levelled a 25 per cent surcharge on the energy it exports to the U.S. before Trump responded on Tuesday by threatening his own 50 per cent tariff on steel and aluminum.

His team called Ford’s threat to cut off power “egregious and insulting” and promised to batter Canada with economic retaliation.

Hours later, Lutnick had called Ford and invited him to the White House for a meeting the premier described as an “olive branch.” Ford then paused his energy surcharge to facilitate the meeting and Trump lowered his 50 per cent tariff to the 25 per cent rate he is applying to the rest of the world.

Since then, the president has oscillated between calling Ford a “strong man” and describing the surcharge as Ontario’s “little threat.” Lutnick also publicly claimed Ford “knows he made a mistake and he withdrew it.”

One senior Ontario government source speaking on background to discuss the meeting acknowledged to Global News that Ford was “taking a chance” pausing the surcharge and sitting down with Lutnick at a volatile White House.

They said it was worth the risk to see if economic sanctions on Canada, many of which threaten Ontario industries like automakers, could be removed.

Ford said on Tuesday that the “worst thing” he could do was turn down the invitation to a meeting and the government source pointed out that if the meeting leads to nothing, Ontario will just be back to where it was at the start of the week.

They underscored, however, that the energy surcharge and threat to cut power altogether remain on the table depending on how the meeting progresses.

The source said if Ford’s team left the meeting feeling there was a route to exempt Canada from steel and aluminum tariffs and to work together on a closer trade relationship, the energy surcharge pause would likely remain in place.

If the meeting doesn’t go well, Ford could decide to put it back in place, they said.

“We won’t be pushed around,” the source said, referring to Thursday’s White House meeting.

If Ontario reintroduces the 25 per cent surcharge it levied on the energy it sells to Michigan, Minnesota and New York, it would need to order the Independent Electricity System Operator to once again add the fee.

The charge would raise an average of $400,000 per day, the government said. Any money the levy raises would be spent on Ontario families and businesses, the province has said, although it is still determining how that will be done.

A source with the Ministry of Energy said civil servants and political staff were still working out if legislation would be required to spend any money raised through the charge. The source was granted anonymity to explain ongoing policy considerations.

They said the question of how the energy funds could be spent is not urgent because the surcharge would only be collected monthly when the IESO settles the market. The next date that is due to take place is mid-April.

The way Ontario’s electrical grid is managed means the 25 per cent surcharge would be added by whichever group or company operates an individual power station. They would add the extra fee when selling energy into the United States and hold it until the monthly settlements.

When IESO completes its final regular calculations it would then take the surcharge raised by various power generators and keep it in an account. The money could stay there until the Ford government works out where it will be spent — and if it needs to pass legislation in order to move it around.

Ontario could also still cut power to the U.S. altogether.

Ending the power Ontario sells to the United States would require the province to reduce its own energy generation to avoid causing issues within its own grid. Electricity generated once it enters the system has to go somewhere and cannot simply be wasted.

The electrical grid operates similarly to a network of pipes filled with water. If water enters the system and doesn’t have an outlet to spill into, it can explode. In the case of energy, not having somewhere to go could cause overheating and, in the worst case, blackouts.

Therefore, if Ontario decides to cut off the U.S., it would need to ramp down its own energy production.

In that case, Ontario would turn off its natural gas generating stations first, the Ministry of Energy source said. Next, it would lower its hydroelectric generation by reducing the amount of water flowing to generating turbines.

Wind turbines can also be disconnected in times of extremely low demand, the source said.