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By way of responding to President Donald Trump’s pointless tariff war with Canada, Ontario Premier Doug Ford briefly imposed and, after having gotten Trump’s attention, withdrew a 25 percent surcharge on electricity exports to the U.S. Since it is unclear whether Trump will relent any time soon as far as tariffs on Canada are concerned, it is worth pondering how New York would be affected if Ford were to really impose a 25 percent surcharge on electricity exports from Ontario into our state.
Simply put, the effects on New York could be substantial, impacting its economy, energy security, and environmental goals. Ontario is a salient supplier of electricity to New York, providing a substantial portion of the state’s power through hydroelectric and nuclear energy. A surcharge of this magnitude would disrupt New York’s energy markets, most likely increase costs for consumers and businesses, and complicate the state’s ambitious climate and clean energy agenda. Let us consider four specific impacts on New York in greater detail.
First, the economic impact. The most immediate effect of a 25 percent surcharge would be an increase in electricity prices for New Yorkers, particularly in Buffalo, Rochester, and Ogdensburg because these three cities are the top three consumers of electricity from Ontario. A surcharge would force utilities to either absorb the higher costs or pass them on to consumers. For households, this could mean higher monthly utility bills, straining budgets and reducing disposable income. For businesses, particularly energy-intensive industries like manufacturing, the increased costs could erode profit margins, reduce competitiveness, and potentially lead to job losses or to relocations to states with lower energy costs.
New York’s utilities could also face challenges in managing the surcharge. In the short term, utilities might seek alternative energy sources, such as natural gas or coal, which could increase greenhouse gas emissions and undermine New York’s climate goals. Alternately, they might turn to other Canadian provinces or neighboring states for electricity, potentially driving up prices in those markets as well.
Second, consider energy security and reliability. New York relies on Ontario’s electricity exports to maintain grid stability and meet peak demand, especially during extreme weather events like heatwaves or cold snaps. A surcharge could reduce the volume of electricity imports, forcing New York to rely more on domestic energy sources. While New York has been investing in renewable energy infrastructure, such as wind and solar, these sources are intermittent and may not fully compensate for the loss of Ontario’s reliable baseload power. This could lead to concerns about energy reliability, particularly during periods of high demand.
Third, there are environmental and climate goals. New York has set ambitious climate targets, including the goal of achieving a zero-emission electricity system by 2040 and an 85 percent reduction in greenhouse gas emissions by 2050. Ontario’s electricity exports, which are significantly from hydroelectric and other renewable sources, play a noteworthy role in helping New York meet these targets. A surcharge that reduces electricity imports from Ontario could force New York to rely more on fossil fuels in the short term, increasing greenhouse gas emissions and slowing progress toward its climate goals. This would be a setback for a state that has positioned itself as a leader in the fight against climate change.
Fourth, there are political and diplomatic implications. If a surcharge on electricity exports really comes to pass, it could strain the relationship between New York and Ontario, two regions that have a long history of cross-border cooperation on energy and environmental matters. New York policymakers might view the surcharge as a protectionist measure, potentially leading to calls for retaliatory actions or a reevaluation of other cross-border partnerships. This could complicate efforts to collaborate on shared challenges, such as climate change and regional energy planning.
In conclusion, what matters most for New York is the magnitude of the surcharge and for how long it stays in place. In economics speak, in the short run, an actual 25 percent surcharge on electricity exports from Ontario to New York will have relatively small effects on both consumers and businesses. However, matters are likely to be rather different in the long run if an actual surcharge rises in magnitude and/or stays in effect for a long time. If this happens, the impacts may well be far-reaching, disrupting energy markets, increasing costs, and complicating our state’s climate goals. While an actual surcharge will provide short-term revenue for Ontario, the long-term costs to both economies could be substantial, thereby underscoring the importance of maintaining stable and cooperative cross-border energy trade.
Amitrajeet A. Batabyal is a Distinguished Professor, the Arthur J. Gosnell professor of economics, and the head of the Sustainability Department, all at Rochester Institute of Technology, but these views are his own.
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Kate Fall – What you fail to see is that the “progressives” (particularly the BernieBrats in 2016) helped elect Trump because they were too “pure” to vote for Hillary in the general election. And that old fool Bernie helped force the Democratioc Party to the left. My point was clear. Sadly you missed it. We’re never going to get accountability from the Trump/Musk administration. Never. So don’t waste time thinking about it. The ONLY course of action is to stop scaring off moderates and even small “c” conservatives by muzzling the “progressives”. Then, and only then might we have a shot at taking back the government and reversing the damage done by Trump and Musk. IF it’s not too late. Which it may well be.
if Ontario drops a 25% surcharge on electricity exports, New York’s in for a rough ride. Higher bills in Buffalo and Rochester aren’t just a minor inconvenience; they could seriously dent household budgets and industrial competitiveness. Ontario’s reliable hydro and nuclear power isn’t just extra capacity—it’s a stabilizer for our grid, especially during those extreme weather swings. This isn’t about political posturing; it’s about real impacts on energy security and our climate goals. Instead of playing tariff games, we need genuine cross-border cooperation to keep our lights on and our future green.
The last line of this excellent analysis, stating, “the importance of maintaining stable and cooperative cross-border energy trade” makes clear why the US-Canada relationship is doomed for now. US policy is in the hands of an individual who is neither “stable” nor “cooperative” but is simply a petulant child who can do nothing but throw a perpetual temper tantrum while smashing everything he touches. Particulatrly galling is that Blue States like New York have to suffer because of the ignorance and gullibility of Red State voters. To our Canadian friends, we apologize for the inconvenience/nous excusons pour la gêne occasionnée.
Yeah this. So you know what you can do? Contact every Republican representative you have – every single one at all levels – as well as your Democratic representatives who seem to think that “cooperation” with Trumps goals is in our favor – and demand a retraction of a stupid trade war that will cripple our local economy, damage relations withour allies, and cause a recession. Also demand that any rhetoric about “making Canada the 51st state” or “buying greenland” be terminated immediately.
And oh by the way, while you are at it demand that they stop dismantling government and turning over the control of it to a megalomaniac private citizen who sells cars and blows up rockets.
Your only recourse in this is action. I recommend the 5 calls app on your phone. Use it. Be loud. Object strenuously. Or just roll over and take another economic hit caused by rabid republican policies.
Let’s see. We have a second term GOP president with no concerns about running again. We have a House of Representatives where the GOP currently holds a 218 to 213 seat majority (and can’t lose control even if Dems win all four of the upcoming special elections, which will never happen) . We have a Senate where the GOP holds a 53 to 47 seat majority (lumping the two Independents with theDems) And we have a Supreme Court with a 6 to 3 count of justices appointed by right-wing Republicans presidents, a court which has basically given Trump a blank check to rape and pillage the government.
Now tell us again how calling our elected representatives and demanding that they oppose all that is going to help.
You want to REALLY help? Then call those members of Congress who style themselves as “progressives” and ask them to sit down and shut up. The country has taken a severe turn to the right. So it’s time for Dems to move to the center and try to protect what we’ve accomplished over the past half century rather then making fools of ouselves in doomed attempts to move furter to the left. After all, those “progressives” bear no little share of the blame for the First Felon being in the White House.
I fail to see how crushing progressive voices will hold Republican lawbreakers to account. We want accountability. The non-progressive voices are all listening to Wall Street and doing what they can to keep people like Elon Musk from reaping the consequences of their own actions. If you don’t want progressives to take over, there is only one way to prevent it: call for accountability instead of depending on only the progressives calling for accountability. But the centrists are too busy helping Eric Adams break the law and rehabbing Andrew Cuomo to be accountable to the law. I’m admittedly not psychic, but it seems obvious that the People are going to turn on lawbreakers. We need to distance ourselves from them.