A SHOCK TO ONTARIO'S ELECTRICITY EXPORT TAX
PRESIDENT TRUMP VOWS TARIFF RESPONSE, ONTARIO SUSPENDS TAX
As we have previously written about here, there is suggestion that Ontario’s electricity export tax (the “export tax”) may lack constitutional authority to be imposed as a retaliatory measure to the United States’ (“US”) recent tariffs on Canadian goods. Despite its questionable legality, Premier Ford imposed the export tax on March 10, 2025. In response, President Trump indicated the US would increase its tariffs on Canadian steel and aluminum to 50 percent on March 12, 2025, which prompted Premier Ford to suspend the export tax shortly thereafter.
In this instance, it appears that Premier Ford’s export tax was a bad idea, much like we suggested here concerning Canada’s second round of retaliatory tariffs. Accordingly, it might make little sense – both in economic theory and practical terms – to “enflame” the situation further with retaliatory measures when the US is an economic giant whose response can cripple the Canadian economy.