Canada Weighs Cutting Power Exports to New England and New York After 50% US Tariffs
- Capacity & Wholesale Markets Policy & Markets Regulatory
Marin Holt
- 0
- 7 minutes read
- US-Canada power trade, 2025: $3.2 billion
- Share flowing to the US: 67%
- Tariff rate under discussion: 25% on exports
- New US tariffs: 50% on about $20 billion of goods
- Champlain Hudson share of NYC: about 20%
Ontario Premier Doug Ford put electricity exports on the table in Canada’s answer to new United States tariffs, and the load would land on New England and New York. Washington imposed 50 percent tariffs on about $20 billion of Canadian goods over the weekend of August 22, 2026. Canada is expected to name its counter-measures on August 26. Cross-border power trade was worth $3.2 billion in 2025, and about 67 percent of it flowed south into the United States. ISO New England and the New York ISO carry that exposure.
Reporting points to a 25 percent tariff on electricity exports as the option under discussion. That figure is not new.
The 25 percent surcharge already had a test run
Ontario charged 25 percent on power exports to Michigan, Minnesota and New York in March 2025. It lasted one day. It collected about $260,000 before Ontario suspended it. Washington answered by threatening to double steel and aluminum tariffs to 50 percent. Both capitals now hold a documented precedent for how fast this measure gets imposed and then withdrawn.
The grid operators expect a price event, not a reliability event
ISO New England does not anticipate reliability problems under typical weather. The operator expects the effect to arrive as higher wholesale prices and higher regional emissions, because gas units replace imported hydropower. Extreme temperatures would tighten that margin. The New York ISO reports close and regular contact with Canadian operators and expects adequate supplies.
Champlain Hudson raises the stake for New York City
The Champlain Hudson Power Express entered service in June 2026. The $6 billion line carries hydropower into New York City. It is sized to cover about 20 percent of the city’s electricity. One point deserves care. That line delivers Quebec power, while Ford speaks for Ontario. A provincial surcharge out of Ontario would miss it. A federal Canadian measure would not.
Why It Matters
Load-serving entities in New England and New York City face a price risk with a known date attached rather than an open-ended one. The 2025 episode resolved inside 24 hours, so the near-term test is narrow. Two things settle it: what Canada announces on August 26, and whether the measure is provincial or federal. That second point decides whether Champlain Hudson volumes are touched at all.
Critical Perspective
The $260,000 Ontario collected in March 2025 is the most useful number in this story, and it is a small one. A 25 percent surcharge ran for a full day and raised about a quarter of a million dollars. Cross-border trade runs to $3.2 billion a year. The measure works as a signal. As revenue it is not worth the trouble of collecting.
It also cuts both ways in a manner a tariff on cars or steel does not, because electricity buyers can substitute within hours. If a New England utility answers a surcharge by dispatching gas instead, Ontario collects no tariff at all. It loses the sale, and its own generators lose the revenue attached to it. That asymmetry is the plainest explanation for why the 2025 attempt lasted a single day.
The reliability language deserves a closer read. ISO New England expects no problems under typical weather, and typical weather is exactly the condition under which imported hydropower matters least. Import dependence concentrates into a handful of cold January mornings. A reassurance about ordinary days says very little about the days that decide the question.
The Champlain Hudson exposure also looks smaller than the headline suggests. That line carries Quebec power, and Hydro-Quebec answers to a different provincial government than Doug Ford does. An Ontario surcharge reaches none of the roughly 20 percent of New York City supply moving through it. Only a federal measure would, and Ottawa would then be repricing deliveries a US city has already built its supply plan around.
