‘Temperature needs to come down’: Ontario suspends 25 per cent export tax on electricity sent to U.S.

Premier Doug Ford has agreed to suspend the 25 per cent surcharge on the electricity Ontario sends to the U.S. after Commerce Secretary Howard Lutnick offered an “olive branch” and invited him to a meeting in Washington on Thursday.

“With any negotiation that we have, there’s a point that both parties are heated, and the temperature needs to come down. And I thought this was the right decision,” Ford told reporters at Queen’s Park following his call with Lutnick on Tuesday.

“They understand how serious we are about the electricity and the tariffs, and rather than going back and forth and having threats to each other, we have both agreed that cooler heads prevail, we need to sit down and move this forward.”

Ford described the meeting with the commerce secretary as “constructive.” It occurred hours after U.S. President Donald Trump threatened to double tariffs on Canadian steel and aluminum in response to Ontario’s electricity tax.

“When you’re negotiating with someone, they call you and they hand over an olive branch, the worst thing I think I could do as Premier of Ontario is ignore them and hang up the phone on them. I don’t operate that way. I believe when someone’s putting out an olive branch, we sit back, we accept it graciously,” Ford said.

LIVE UPDATES: Trump turns up the heat on trade war

The premier shared he will be joined by federal Finance Minister Dominic LeBlanc on Thursday to meet with U.S. trade representatives to discuss a “renewed” United States-Mexico-Canada (USMCA) trade deal.

“They know we aren’t fooling around. We’re going to negotiate hard, but we want a fair deal. We want a fair and free trade deal with our closest friends and allies,” Ford said.

The premier believes Ontario’s electricity surcharge caught the Americans’ attention.

“Sometimes you have to play your cards, and this is one of the cards that we played, and hopefully we’re going to have a very good, constructive conversation with the secretary when we get down there,” Ford said.

He warned that he would not hesitate to use the measure again as a tool against U.S. tariffs. The surcharge was just one of the countermeasures the provincial government took in response to Trump’s tariffs on Canadian goods.

The province estimated that the surcharge would likely bring in $300,000 to $400,000 in revenue a day and add about CAD$100 a month to some utility bills being paid by the Americans who rely on electricity from Ontario. The province currently supplies electricity to about 1.5 million homes and businesses in New York, Michigan and Minnesota.

Tariff on Canadian steel and aluminum back to 25 per cent: White House

Shortly after Ontario announced the pause, Trump told reporters that he was “probably” going to reduce the tariffs on Canada.

He also called Ford a “very strong man.”

“It would have been a very bad thing if he did and he’s not going to do that,” Trump said, referring to electricity surcharge. “So, I respect that, but we were just informed that he’s not going to do that.”

The White House subsequently confirmed that it will no longer double the 25 per cent tariff on on Canadian steel and aluminum. On Tuesday morning, Trump threatened to double the tariff in response to Ontario’s measure, saying Canada would pay a big “financial price.”

“Pursuant to his previous executive orders, a 25 per cent tariff on steel and aluminum with no exceptions or exemptions will go into effect for Canada and all of our other trading partners at midnight,” White House spokesperson Kush Desai said in a statement.

In his post on Truth Social on Tuesday morning, the commander-in-chief asked why the U.S. “allows” another country to supply Americans with electricity.

“Who made these decisions, and why? And can you imagine Canada stooping so low as to use ELECTRICITY, that so affects the life of innocent people, as a bargaining chip and threat,” Trump wrote.

“They will pay a financial price for this so big that it will be read about in History Books for many years to come!”

The post was the latest in a series of online comments Trump has made in the last 12 hours in response to Premier Ford’s decision to add a 25 per cent surcharge.

The U.S. president also said he was ready to declare a “national emergency on electricity” within the “threatened area.”

“If other egregious, long time Tariffs are not likewise dropped by Canada, I will substantially increase, on April 2nd, the Tariffs on Cars coming into the U.S. which will, essentially, permanently shut down the automobile manufacturing business in Canada,” Trump wrote.

He reiterated his desire to see Canada become “our cherished Fifty First State.”

‘We need to stop the bleeding’

On Tuesday evening, Ford appeared on several U.S. media networks, where he explained his decision to drop the electricity surcharge.

Ford said, “We need to stop the bleeding,” telling NBC’s Meet the Press that the two countries should work together to get a trade deal done that is beneficial for workers on both sides of the border.

“Cooler heads have to prevail here, or we’ll decimate both economies,” Ford said, adding that he’s looking forward to Thursday’s meeting.

“Nothing happens if you don’t sit down and discuss the issues. Let’s get the differences on the table. Let’s come up with a solution. Let’s move forward.”

The premier noted that Canada being a 51st state will never be part of any trade deal.

On CNN’s Erin Burnett OutFront, Ford said he doesn’t care if the Trump administration wanted to call his action backing down.

“They can use any terminology. I just feel when it’s at a fever pitch and we see the market tumbling over $4 trillion, inflation happening, uncertainty, and consumer confidence is down, it is not about backing down. It’s about sitting around the table and negotiating a fair deal,” Ford told Burnett.

The premier reiterated that he had a “constructive” conversation with Lutnick and that he informed the commerce secretary that they need to speed up a new trade deal so there is certainty in the markets.

When asked if changes to the U.S.-Canada border could be up for negotiation, Ford said that’s not going to happen, calling the issue a “nonstarter.”

“That’s just not on the table. We will never be a 51st state. We’re proud of our sovereignty. We will always stay as Canada,” the premier said.

Later on Newsmax, Ford insisted that “no one told me to back off” when asked about his decision on the electricity surcharge.

“I called a compromise,” Ford told Rob Finnerty during an interview on his show. “When there’s a fever pitch in any negotiation I’ve ever been in, business or in politics, I think cooler heads have to prevail, and that’s exactly what happened today.”

He repeated his call for the U.S. to come to the table so both countries could work out a deal that would benefit them.

“We’re much stronger together than going at each other,” the Ontario premier said.

When Finnerty asked Ford if he likes Trump, the premier replied, “Yes. As a person, I respect him. Anyone that becomes president and has went through what he has gone through, absolutely the utmost respect for him.”

Speaking to CNBC on Tuesday morning, Premier Ford called the trade war initiated by Trump an “unprovoked attack” on Canada.

“There is one person to be blamed if we go into a recession. It will be called the Trump recession.”

Ford said the tariffs Trump announced on aluminum will just hurt American businesses.

“Only 16 per cent of the aluminum is produced in the U.S. They can’t get it anywhere else but Quebec, Canada,” Ford said.

Ford noted that the U.S. also relies on a significant amount of high-grade nickel from Ontario.

“Protectionism does not work. We are the two closest allies in the world, as we’re going back and forth duking it out with each other, China is laughing. They are creating more critical minerals that they aren’t going to give the U.S.,” Ford said.

“Fifty per cent of your (the U.S.) military or aerospace or manufacturing relies on our high-grade nickel. I want to ship you more high-grade nickel.”

He urged the president to end the “chaos” and sit down to renegotiate a free-trade agreement between Canada, the U.S., and Mexico.

“Let’s sit down at the table and resolve the problem.”

Prime minister-designate Mark Carney said Trump’s latest tariffs are “an attack on Canadian workers, families, and businesses.”

“My government will ensure our response has maximum impact in the U.S. and minimal impact here in Canada, while supporting the workers impacted,” he said in a statement released Tuesday.

“My government will keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade.”

Conservative Leader Pierre Poilievre strongly condemned Trump’s “unjust tariffs targeting Canadian steel and aluminum workers and manufacturers.”

“I am calling on the government to immediately bring in retaliatory tariffs to respond to this unjust act and to protect Canadian steel and aluminum workers. If President Trump is applying 50 percent tariffs on our steel and aluminum then Canada must hit back with 50 percent tariffs on all steel and aluminum imported from the United States,” he said in a written statement.

“Our message to the U.S. administration must be clear, do not mistake our kindness for weakness, we are a strong, proud and sovereign country and we will fight back against these attacks against our economy and our workers.”

‘Harmful policies’

In a post on X Tuesday, New York Gov. Kathy Hochul shared the news that Ontario is pausing the 25 per cent electricity surcharge on energy it exports to her state pending a meeting between Ford and Lutnick, set to take place Thursday.

“I spoke with (Premier Ford) earlier today to share our frustrations & urge him to suspend this plan. He made clear that he does not want to hurt New Yorkers,” she said.

Hochul added: “Trump’s trade war will only hurt working families. It needs to end.”

On Monday, Hochul and Sen. Chuck Schumer highlighted the damage Ontario’s retaliatory measures will cause in an open letter posted on social media.

“President Trump’s reckless tariffs on Canadian energy imports will be a direct financial hit to New Yorkers, driving up the utility costs, disrupting energy markets, and creating uncertainty for businesses and families,” the letter read.

“In response, Ontario has announced retaliatory tariffs on electricity exports, escalating the crisis and threatening the reliability of our energy supply.”

The two Democrats said the U.S. federal government and Ontario should reverse the “harmful policies” and noted that New York State agencies will be directed to conduct “an urgent review to ensure transparency on the real cost to consumers.”

“It is unfortunate that we must now consider reliability contingencies should the century-long energy partnership between New York and Canada be destroyed due to President Trump’s harmful, short-sighted actions,” the letter continued.

“To address this, the New York State Department of Public Service and New York State Energy Research and Development Authority (NYSERDA) should require that all New York utilities clearly communicate to consumer any increase in cost due to President Trump’s tariffs and Canadian retaliation.”

She urged Trump to immediately “rescind the tariffs.”

“If he refuses, Republicans in Congress must act to overturn them before they inflict further damage on working families and businesses,” the letter concluded.

With files from Chris Fox and Joshua Freeman