Tensions are rising between Canada and the U.S. after President-elect Donald Trump threatened to impose steep tariffs on Canadian goods. Now, a top official in Canada, Doug Ford, the Premier of Ontario, is warning that Canada might retaliate by shutting down its energy exports to the United States.
Ford has made it clear that if Trump moves forward with his plan to slap a 25% tariff on Canadian imports on his first day in office, Canada won’t sit idly by. “We will go to the extent of cutting off their energy,” Ford warned. Specifically, he mentioned stopping electricity flowing to the U.S. states of Michigan, New York, and Wisconsin, which rely on power imports from Canada.
Though Ontario isn’t a major producer of crude oil, Ford’s comments likely refer to the electricity Canada exports to the U.S. If Trump follows through on the tariffs, it could severely hurt the Canadian economy, leading to a potential recession. Ford emphasized that while Canadians would suffer, Americans would feel the pain too.
Canada is a major supplier of electricity to the U.S. In fact, Canada is the leading source of imported electricity, sending about 33.2 million megawatt hours to the U.S. last year. This electricity is crucial for balancing power demand, especially during peak times or when the U.S. supply is low. Without this energy, some parts of the U.S. might struggle to meet their power needs, at least temporarily.
But while the idea of cutting off electricity is a serious threat, experts say it might not cause long-term damage. The U.S. has a large supply of its own electricity and could shift power from other regions if needed. “I don’t see much vulnerability for the U.S.,” said RJ Johnston, a researcher at Columbia University. Still, the sudden loss of Canadian power could cause disruptions in certain areas.
However, the real leverage Canada holds over the U.S. might not be electricity. Canada is also the top foreign oil supplier to the U.S., providing 1.4 million barrels of crude oil daily. This oil is vital for U.S. refineries in the Midwest and Great Lakes regions, which rely on Canadian crude to produce gasoline, diesel, and jet fuel. If Canada were to stop sending oil, it could create fuel shortages and higher prices, especially in these regions.
Despite these potential impacts, analysts believe Canada is unlikely to cut off oil exports, as it would hurt its own economy. The U.S. is Canada’s biggest customer for oil, and a move like this would damage both countries. “It would hurt everyone involved,” said Robert Yawger, an energy expert at Mizuho Securities.
However, Canada has a backup plan. The newly opened Trans Mountain Pipeline now allows Canada to sell oil to countries in Asia, such as Japan and China. This gives Canada more options if relations with the U.S. turn sour.
While some Canadian leaders, like Ford, are pushing for a tough response, others, like Danielle Smith, Premier of Alberta, have said they would prefer to keep things diplomatic. “Under no circumstances will Alberta agree to cut off oil and gas exports,” she stated.
As the situation unfolds, the question remains: will Canada take this drastic step to stand up to Trump’s tariffs, or will cooler heads prevail? Only time will tell.
