All options on table as N.B. tries to restrain rising bills — including sale of utility
N.B. Power much deeper in debt 15 years after a former government's unpopular effort to sell it
Premier Susan Holt says the New Brunswick government is examining options — from a rate freeze to the sale of N.B. Power — to tackle high energy bills.
The province will have a plan to announce "within weeks," Holt told reporters in mid-March.
"We have to do more and different with N.B. because the status quo is not an option."
Holt confirmed that the options on the table include a rate freeze, additional rebates, and the elimination of debt repayment targets.
Former Quebec premier Jean Charest and former New Brunswick premier
Shawn Graham announced a proposed deal in October 2009. (CBC)
More drastic options, such as the province assuming responsibility for N.B. Power's debt or selling the utility entirely, are also on the table.
"I want you to know that the government is looking at many different options of what we can do with both N.B. Power, with the situation you are facing on these increased rates," Holt said.
N.B. Power is conducting a third-party audit after people across the province complained of spikes in their bills this winter. That audit is expected to be released in April.
N.B. Power for sale? All options on the table, premier saysAn economic consultant is skeptical about the sale option. David Campbell wonders who would want to buy the utility in its current state.
"Selling the whole of N.B. Power to an investor … that's an option, but it would probably involve the government writing down a huge portion of the debt and also taking liability for Mactaquac," said Campbell, who helped guide economic development strategy under previous Liberal governments, including those of Frank McKenna and Brian Gallant..
N.B. Power's net debt sat at $5.3 billion after the 2023-2024 fiscal year.
The utility is also facing necessary upgrades across its aging transmission network, problems at the Point Lepreau nuclear plant, and the looming refurbishment of the Mactaquac Dam west of Fredericton — arguably its most important asset, according to N.B. Power officials.
The auditor general and bond rating agencies have repeatedly raised concerns about N.B. Power's ability to sustain its operations.
Economic
development consultant David Campbell argues that the best step for the
government at this point may be to take on some or all of N.B. Power's
debt load. (Silas Brown/CBC News)
Darren Murphy, the utility's financial vice-president, warned lawmakers during a recent committee appearance that N.B. Power 's annual capital budget will likely hover around $1 billion in the coming years. The yearly capital expenditure has typically been around $450 million over the last several years.
The current financial pressures, and corresponding rate hikes, have been blamed on previous political decisions. Holt herself made that case, even as she didn't rule out taking similar measures.
"One of the reasons we're in this position is because successive governments have artificially frozen rates, or put them in places where that has wiped out N.B. Power's ability to do the kind of maintenance that they needed to do," she said.
N.B. Power was almost sold before.
In October 2009, with a joint news conference at Government House in Fredericton, then-premier Shawn Graham and Quebec premier Jean Charest announced an agreement to sell most of N.B. Power's assets to Hydro-Québec for $4.8 billion, which was the total amount of the debt at the time.
The plan included rate freezes for N.B. Power customers for five years, after which rates were to be tied to the consumer price index. Industrial customers were to see their rates cut to the significantly cheaper Quebec industrial rate.
But the proposed agreement was received poorly by both the public and opposition politicians. Hundreds gathered outside the legislature to protest the decision, and two members of Graham's cabinet resigned.
Fifteen years later,Graham says he wishes he could have seen a deal through. Part of the problem, he said in an interview, was that he couldn't tell New Brunswickers exactly how bad the situation at the utility was.
"It was like saying, I had an old car and I wanted to go out and sell it and get the best possible price for that automobile," he said. "I could not go out and tell everyone how dire the situation was and then negotiate the best possible price.
"We were hamstrung in our communications."
Graham,
the Liberal premier of New Brunswick from 2006 to 2010, says he regrets
not being able to get a deal done to sell N.B. Power. (Silas Brown/CBC News)
The intervening years have seen N.B. Power's financial picture continue to deteriorate. Graham said he can't imagine there would be much of a case for anyone to buy the utility.
"There's no utility in the world that will come in and pay for the $5.3 billion in debt," he said, also pointing to the impending multimillion dollar Mactaquac refurbishment.
"Sadly, that window has closed."
The utility has been exploring a potential deal with Ontario Power Generation involving Point Lepreau that could include some sort of joint ownership arrangement.
And on the Mactaquac refurbishing, it has been looking at alternative funding pathways, such as the Canada Infrastructure Bank, that would limit the debt impact of the project.
But the fundamental problem of N.B. Power's large debt load, and its struggles to pay it down, remains.
Campbell has advocated the province take on all or part of the utility's debt, which would give N.B. Power some breathing room as it looks to recover.
He argued that in some ways, transferring responsibility from the ratepayer to the taxpayer is fairer.
"The taxpayer pays taxes based on their capacity and their ability to pay," he said. "In other words, the more money they earn, the more they pay income tax. Whereas the ratepayer pays the same rate whether they're poor, whether they're middle class or they're upper class.
"Without some kind of rethinking of this, electricity rates are going to keep going up and up. … I think the time is right for a structural change to set N.B. Power on a firm foundation for the future."
ABOUT THE AUTHOR
Parts of 249 private properties needed to improve transmission link to Nova Scotia, says N.B. Power
'There are still a lot of unknowns': some Memramcook residents upset to lose part of their land to project
New Brunswick and Nova Scotia are set to begin construction of the first phase of a large joint project they say will help them keep their commitment to phase out coal by 2030.
The interprovincial electricity transmission line will span 160 kilometres, from Salisbury, new Moncton, to a substation in Onslow, near Truro.
Murielle Belliveau's Memramcook home will be in the shadow of the new transmission tower. She is one of 249 property owners who will lose part of their lot or their homes to the line.
The senior was one of a few dozen people who attended an open house about the project this week, hosted by N.B. Power. The open houses in Salisbury, Tantramar and Memramcook are all areas where the transmission line will pass through.
The environmental impact assessment identifies a total of 267 properties that the power line will cross, totalling 313 hectares. Of those, 249 are privately owned, and many of those property owners from the Memramcook area were in attendance at the recent open house.
"We thought that by coming today we'd have more answers. But there are still a lot of unknowns," said Bellieveau, who lives on Royal Road.
Residents anxious as N.B. Power shares plans for new transmission link to N.S. A portion of her family property will be under easement by N.B. Power for the next 75 years.
That means the utility can use the land for a right-of-way, build towers and supports, and install underground or above ground wires, but the resident will still have ownership of the property.
"It's not the full land," she said. "I'm losing just the part where I do my gardening."
Bob Garland, the project director, said property owners don't have a choice.
"N.B. Power has the right to expropriate — we don't take that lightly," he said. "With respect to choice, this is ultimately for the greater good."
Bob
Garland, project director for the interprovincial transmission line,
says it will twin the existing line that was built in the 1970s,
'essentially doubling up on it.' (Victoria Walton/CBC)
According to documents, "where land negotiations are not successful, the expropriation process would be initiated." Property owners will receive "compensation, as appropriate" for their land, which will be negotiated individually.
Garland said the project will twin the existing line that was built in the 1970s, "essentially doubling up on it."
While Belliveau is upset about losing her garden, she also worries about her neighbours, some of whom will have to pack up and move.
"My neighbour has to move, and they are taking over his house," she said. "So that's the sad part, to lose such a wonderful neighbour."
Belliveau said because the transmission line changes direction on her property, the largest of the three tower structures that N.B. Power will be using for the project will be within her field of vision.
"So it will just be like a lot of this structure where there used to be trees and birds and all the beautiful things," she said.
There are three types of towers that the interprovincial transmission
line project will use, depending on location. (Victoria Walton/CBC)
Another neighbour, Jocelyne Richard, said she had breast cancer and went through treatment and open heart surgery in 2016. She worries about the impact the electromagnetic field might have on her health.
"My house is not being bought, but it's gonna be 140 feet from my house," Richard said. "It's like you're getting radiation all the time."
N.B. Power's website for the transmission line links to Health Canada documents which indicate there's no evidence that "extremely low frequency" electromagnetic fields, which are defined as under 300 hertz, cause harm.
But for Richard, it's not the reassurance she wanted.
"I'm being affected and I'm living there, but they're more concerned about the environment than they are about us, the people living in their house so close to the power lines," she said.
Jocelyn
Richard has dealt with breast cancer and open heart surgery and is
worried about the impact on her health of having power transmission
lines close to her home. (Victoria Walton/CBC)
Richard was originally told N.B. Power would buy her house and she'd be forced to move. But the lines have moved slightly and now she can stay. Or rather, she's forced to stay.
"I don't know what to do. It's like, where do I go?" she said. "Even now, people know, they already know that there's going to be another power line. So it might affect the selling of my house and the price I can get."
Belliveau says it's caused a lot of anxiety and stress among her and her neighbours.
"I don't want to lose the value of my property, but I'm not in it for financial gain. And I'm sure that other individuals in the room who are losing their homes are not in for the financial gain," she said.
Eugene Gautreau says he was surprised to hear the project is
progressing faster than he was initially told. (Victoria Walton/CBC)
"They would much rather stay in their home and keep doing what they've always done — to harvest the land and just wake up and listen to the birds."
Some residents at the Memramcook open house expressed concern that the public consultation process came too late and the project is moving faster than they expected, but ultimately support the project.
"The last time I talked to a guy from N.B. Power, he told me it could be up to five years. Now, six months later, they come along, and in another six months they're going to be starting," Eugene Gautreau, who lives in Memramcook East, said.
"So that's a big surprise to us."
Gautreau said the line will pass behind the tree line near his property. And while he wishes he'd been more informed, he doesn't have any issues with the project itself going ahead.
"It's like a business," he said. "They've got to do what they've got to do."
Impact on the natural environment
In January 2025, N.B. Power submitted an environmental impact assessment to the Department of Environment for review of their portion of the project.
It identifies 10 species at risk spotted during field studies in 2022 and 2023, including the bald eagle, bank swallow, barn swallow, monarch butterfly, wood turtles and two types of bats.
"We've had bird surveys done, we hired a consultant to walk the entire line and identify water bodies and species at risk," Garland said.
The new interprovincial transmission line will run parallel to the
existing one, which was built in the 1970s. (Victoria Walton/CBC)
There are also 206 groundwater wells located within the project area, all used as domestic drinking water sources.
The nearly 650-page document includes mitigation measures such as operating machinery in "previously disturbed areas whenever feasible" and avoiding wetlands when building tower structures "unless absolutely necessary."
The Department of Environment will have an opportunity to ask questions about the document, which N.B. Power will have to answer.
But Garland says that "right now there's nothing major with respect to environmental that we're aware of."
The project is still in the planning phase, with construction expected to start in both provinces in 2026.
"It's what ultimately started out as Atlantic Loop, the evolution of the Atlantic Loop," Garland said. On the Nova Scotia side, it's called the N.S.-N.B. Reliability Tie.
Nova Scotia will foot the bill for the entirety of Phase 1, including the New Brunswick portion of the line. In 2023, it was estimated the total project in both provinces, including a Phase 2 extension to Point Lepreau, would cost $1.4 billion.
ABOUT THE AUTHOR
N.B. Power sees 'no issues' with bills so far, but can't explain anomalies
MLAs disappointed that audit promised this week won’t be ready until April
N.B. Power says it doesn't see any flaws with its smart-meter program and billing system, but is acknowledging it still can't explain anecdotal evidence of unusually high electricity consumption in some residential bills.
CEO Lori Clark told a committee of the legislature that early indications from an audit still underway are that the fault does not lie with the new units.
"No issues have been identified," she said.
When ratepayers started complaining about shockingly high December power bills, Clark said it was likely caused by a combination of a colder month than December 2024, a longer billing period and the utility's recent rate increase.
No issues found in preliminary power bill probe, but questions remainBut Clark wasn't able to explain how a family in Green Leader David Coon's riding of Fredericton Lincoln had a bill showing a 45 per cent increase in their electricity consumption compared to a year earlier.
"Their conclusion is that they simply aren't consuming the amount of power that N.B. Power says they are," Coon said.
"That's exactly why we need to do more work," Clark responded.
"I can't give a broad-brush answer. … Those are the things that we actually need to dive into deeper, to understand exactly what is happening with our customers."
MLAs from all three parties told Clark they were disappointed that the audit, ordered in January, wasn't ready in time for this week's meeting as promised.
"We are very disappointed to learn that we can't ask questions based on the audit," said Moncton East Liberal MLA Alexandre Cedric Doucet.
"New Brunswickers need answers."
'We
are very disappointed to learn that we can’t ask questions based on the
audit,' Moncton East Liberal MLA Alexandre Cedric Doucet said. (Jacques Poitras/CBC)
N.B. Power's board chair wrote to Energy Minister René Legacy Tuesday to say the audit wouldn't be finished in time.
Clark explained to the committee that so far, the audit has only looked at 20 of the utility's new smart meters and 20 of its older meters.
While the process has found no problems with the equipment, it's too small a sample for definitive conclusions, Clark said.
Opposition Progressive Conservative Leader Glen Savoie said the committee should have been told sooner than Tuesday.
"I think it would have engendered that sort of trust and confidence that I'm talking about here."
Opposition
Progressive Conservative Leader Glen Savoie suggested slashing costs as
the only alternative to further rate increases. (Jacques Poitras/CBC News)
N.B. Power has promised to have the audit finished by April and to return to the committee then to answer questions about it.
MLAs also probed other N.B. Power issues, including the utility's $5 billion debt.
Savoie said even with rate increases equal to around 13 per cent this year, the Crown corporation is making no progress toward lowering that debt.
He suggested slashing costs as the only alternative to further rate increases, but Clark pushed back.
MLAs also asked about other N.B. Power issues, including the utility’s $5 billion debt. (Silas Brown/CBC News)
"The challenges that the utility has with debt today, we cannot cut our way out of," she said.
Reducing spending would compromise N.B. Power's ability to operate its system, conduct maintenance and trim vegetation — all essential to remaining a reliable source of electricity for customers, she said.
Darren Murphy, the utility's chief financial officer, said those challenges will become steeper in the coming years with a need to raise capital spending from around $450 million to $500 million a year to about $1 billion.
That includes a 15-year refurbishment of the Mactaquac hydroelectric dam at a cost now pegged at $7 billion to $8.9 billion.
Clark also said N.B. Power is now "unsure" whether ARC Clean Energy's small modular nuclear reactor — originally expected to be ready by 2030 — will be available by "the late 2030s."
She later told reporters there are "some current challenges with the technical work being done on the technology."
Last year a former ARC CEO told CBC News that problems at the company suggested N.B. Power should be looking at other alternatives for new nuclear generation — a move Clark suggested Tuesday the company is preparing for.
"We're hoping there is a pathway for ARC to be successful," she said of the company, which has ambitions to develop a made-in-New-Brunswick reactor that could be piloted at Point Lepreau to supply N.B. Power with non-emitting energy.
"We will continue to work with ARC. They are looking for investors now, and we will continue to work with them, but we also have to have a Plan B in the event ARC isn't ready."
ABOUT THE AUTHOR
Holt defends N.B.'s 'cooler heads' approach on electricity sales to U.S.
Premier says she won’t cut off power to Maine or apply surcharge ‘just for show’
Premier Susan Holt is defending her decision to not use electricity exports to Maine as leverage against U.S. tariffs, arguing the move might cause long-term pain for New Brunswickers.
In a week that saw Ontario Premier Doug Ford secure a meeting with Trump administration officials in Washington after his electricity threat, Holt said she would not give in to the temptation to "lash out" at the United States.
She said adding a surcharge to N.B. Power's electricity exports, or cutting them off altogether, might lead U.S. utilities to do the same to New Brunswick when it needs to import electricity.
"If I'm going to ask New Brunswickers to go through pain that I'm going to put on them, it better be because that's going to yield a result of reducing or eliminating the tariffs that the Americans have put in place, and not just for show," she said.
"I'm not certain that adding a surcharge to what the folks in Maine experience is going to yield a result from the White House, and instead will just cause damage to a relationship that we want to protect in the long run."
Ford's announcement Monday of a 25-per-cent surcharge on Ontario's electricity exports to three U.S. states provoked an angry reaction from President Donald Trump.
Ontario
Premier Doug Ford made a bold threat to add a 25 per cent surcharge on
exports of U.S.-bound electricity this week but later suspended the levy
once a meeting with a Trump official was set. (Chris Young/The Canadian Press)
Trump said he would double some planned tariffs on Canadian exports, then backed down after Ford agreed to suspend the surcharge and travel to Washington to meet with Commerce Secretary Howard Lutnick.
"The president woke up this morning and he saw it and he jumped right on it," Lutnick told CBS News earlier this week.
But Holt said she would prefer to let "cooler heads prevail" rather than poke the U.S. president into a reaction.
About 58,000 Maine residents are customers of four local utilities that rely exclusively on N.B. Power for electricity.
Financial health of N.B. Power in the way of more extreme tariff counterpunchThey are not connected to the larger regional power grid in the southern part of the state, leaving them nowhere else to go to turn on their lights and heat their homes.
Holt said leveraging that fact might prompt U.S. policymakers to extend that grid to northern areas of the state, which would mean a loss of customers — and revenue — for N.B. Power.
Ford has agreed to meet with U.S. Commerce Secretary Howard Lutnick to discuss tariffs. (Ben Curtis/The Associated Press)
"These are decisions that need to be taken very carefully. They can't be made as a knee-jerk situation, because our situation here in New Brunswick is unique."
The utility's already precarious financial position makes it even harder to contemplate that risk, the premier acknowledged.
She said her government is looking at "many different options" to help the utility deal with a $5 billion debt that has forced it to hit customers with large rate increase last year and this year.
"The status quo is no longer an option with N.B. Power," she said.
That could include a rate freeze, rebates, easing the Crown corporation's debt-reduction targets, moving some of its debt onto the government's accounts or even selling the utility.
"That's on the table," she said of a possible sale.
A previous Liberal government's attempt to sell the utility to Hydro-Quebec in 2009 prompted a widespread popular backlash in the province and contributed to the party's defeat in an election the following year.
Holt
says she is deciding whether to keep the Tesla electric cars in her
government's fleet. Tesla, owned by Trump ally Elon Musk, is among
companies 'seeking to do New Brunswickers harm,' she said. Musk, left,
and Trump promoted Tesla products earlier this week at the White House.
(The Associated Press)
Holt did not announce any new provincial countermeasures to the U.S. tariffs Thursday, acknowledging that her government does not have "a dozen tools at our disposal."
She said American alcohol remains off the shelves in N.B. Liquor stores and the government has "looked at" replacing service contracts it has with U.S. companies, once it sorts out the cost implications and the availability of alternative suppliers.
A spokesperson said later in the day, however, that no contracts have been cancelled to date.
Holt also said officials would "look at" whether to keep the Tesla electric cars in the government fleet — referring to the company, owned by Trump ally Elon Musk, as among "companies seeking to do New Brunswickers harm."
Holt said she would use the weekly news conferences "to talk about the things you want to talk about, and to provide a forum for regular communication during a time of consistent uncertainty. … It's my job to connect with New Brunswickers in a time of uncertainty."
She also referred to how stressful the trade war is and, after providing a toll-free phone number for mental health support, urged New Brunswickers "to be with your friends, to get outdoors, to clear your head, to turn off the news and to reach out to the people around you."
ABOUT THE AUTHOR
Holt hesitates to use N.B.'s most powerful trade lever: electricity
58,000 Maine residents rely on New Brunswick for power, but so far, premier is reluctant to cut them off
New Brunswick's most powerful lever in Canada's trade war with the United States is found mostly along the province's back roads, cutting through forests and across fields rarely seen by most residents.
That lever — a series of N.B. Power transmission lines running to the border with Maine — is one that, so far, Premier Susan Holt is opting not to use to strike back.
"Our government is using every tool in our toolbox to protect New Brunswick workers and our economy," Holt said last week when she rolled out her action plan in response to President Donald Trump's 25 per cent tariffs on most imports from Canada.
But not every tool. Not exactly.
Holt promised to spend tens of millions of taxpayer dollars helping hard-hit companies and workers absorb the impact of the tariffs.
She avoided a riskier, more painful — but possibly more effective — option.
In northern and eastern Maine, 58,000 people rely on electricity from N.B. Power to keep their lights on and their homes warm.
They're not connected to the large-scale regional power grid in the southern part of the state.
They have nowhere else to go for power.
The tariff leverage New Brunswick’s premier is hesitating to use"Electrically, northern and eastern Maine are part of Canada, not part of the rest of the United States," says Bill Harwood, a former public advocate who represented state residents at energy regulatory hearings.
"They are integrated into the New Brunswick system and the electricity comes from New Brunswick."
Four local utilities are now working through what Trump's tariffs on Canadian imports will cost them — and how to pass those costs onto their customers.
Bill
Harwood, a former public advocate who represented Maine residents at
energy regulatory hearings, says those who rely on N.B. Power have some
of the lowest incomes in the state. (CBC/Zoom)
If Holt slapped an additional surcharge on that electricity, it would increase the pain even more.
"A lot of this is unknown," said Greg Sherman, the general manager of Houlton Water Company, which serves 5,500 customers in and around Houlton.
Another electricity company, Versant Power, has more than 37,000 customers in northern Aroostook communities such as Caribou, Presque Isle, Fort Kent and Van Buren.
"We are staying tuned for more details on potential federal policy changes," spokesperson Tina Morrill said.
Harwood
says cutting off power to northern Maine would spark 'an international
crisis' that would require political regulatory intervention. (Michael Heenan/CBC)
In Ontario, Premier Doug Ford has threatened to cut off electricity transmission to neighbouring states "with a smile on my face, and I'm encouraging every other province to do the same."
That attracted widespread U.S. media attention, and Ford repeated the threat again Monday as he slapped a 25 per cent export surcharge on electricity sales to New York, Michigan and Minnesota — the equivalent of about $100 extra per month per household, he said.
At her announcement last week, Holt said she wanted to avoid hurting Americans across the border.
"Our neighbours in Maine are our friends, and we want to put serious consideration into the decisions that might hurt some of the people that have already spoken up against the tariffs," she said.
Split views on tariffs
Trump won the areas of Maine that rely most on New Brunswick for power, so a surcharge or cutoff would squeeze supporters of the president who may support his move.
Even the district's Democratic congressman, Jared Golden, supports tariffs and did not sign a letter from other Maine politicians calling on Trump to cool it.
Harwood said Maine residents who rely on N.B. Power have some of the lowest incomes in the state.
"This would be a crushing financial burden on many of those customers," he said.
Ontario
Premier Doug Ford has threatened to cut off electricity transmission to
neighbouring states 'with a smile on my face, and I’m encouraging every
other province to do the same.' (Justin Tang/The Canadian Press)
Farther south, ISO New England, the agency operating the larger regional power grid across several states, has filed a regulatory application suggesting electricity may not be subject to the tariffs.
In the meantime, it's asking for clarity on what kind of mechanism it should use to collect the money.
"In a worst-case scenario, the ISO could be forced to file for bankruptcy protection should it have insufficient funds to cover costs stemming from such import duties," the filing says.
It also warns that N.B. Power and others in the New England market "may question or challenge continued participation" in that market if there is uncertainty about who will pay.
A day after saying she didn't want to inflict pain on Mainers, Holt offered a second explanation for hesitating: she prefers measures "that will hurt the U.S. and not hurt New Brunswickers," or their debt-laden Crown corporation, N.B. Power.
"It's possible that shutting off power to New England puts a big burden on a utility that is already challenged, and New Brunswickers already have power bills that are too high," she said.
Changing expectations
N.B. Power won't discuss what such a move would cost, saying only it's working with other power utilities "to address the challenge of potential tariffs head-on and ensure energy security for customers."
Holt's changing explanations and her reluctance to follow Ford's lead "indicates to me that they haven't thought it out well enough yet," Opposition PC Leader Glen Savoie said.
"The response was tepid and the government seems a bit overwhelmed."
Donald Trump won the areas of Maine that rely most on New Brunswick for power. (Sam Farley/CBC)
Harwood said cutting off power to northern Maine would spark "an international crisis" that would require political regulatory intervention.
The point of tariffs is to force people to purchase products from domestic suppliers.
But there is no such domestic producer of electricity in northern Maine, he said.
"If these people are relying on electric space heaters or heat pumps to get them through the remaining cold days of the winter and you cut off their electricity, you are creating a public health risk that is unacceptable." he said.
That comment underscores just how powerful a lever New Brunswick has.
A more aggressive move on electricity "may be on the table," Holt said March 4.
Then she corrected herself: "They are on the table. They may be implemented in the future."
ABOUT THE AUTHOR
Ontario slaps 25% levy on U.S.-bound electricity in latest trade war volley
Surcharge will generate up to $400K per day to be used for worker, business supports: province
Ontario is imposing a 25 per cent surcharge on all U.S.-bound electricity as part of its retaliatory measures against U.S. President Donald Trump's tariffs on Canadian goods.
The new levy took effect Monday and will add about $10 per megawatt-hour to the cost of power heading south, the province says. It will generate an estimated $300,000 to $400,000 per day, money that will be used to support workers and businesses hit by U.S. tariffs.
"Believe me when I say I do not want to do this," Ontario Premier Doug Ford said at a news conference Monday.
"I feel terrible for the American people, because it's not the American people who started this trade war. It's one person who's responsible, that's President Trump," he said.
Ontario provides electricity to roughly 1.5 million customers in the northern border states of New York, Michigan and Minnesota. Ford said the surcharge will cost the average household or business in these states an additional $100 per month on their power bills.
He added the magnitude of the levy could be increased if the Trump administration continues to escalate its trade war against Canada.
"Until these tariffs are off the table, until these tariffs are gone for good, Ontario will not relent. We will not back down," Ford said alongside Ontario Energy Minister Stephen Lecce.
The province has also taken American booze off LCBO shelves and banned U.S. companies from government procurement contracts, in addition to the federal government's initial round of retaliatory tariffs on $30 billion worth of U.S. goods.
The electricity surcharge is being imposed by a directive from Lecce to the province's electricity system operator, which will require any generator selling electricity to the U.S. to add what's being called a Tariff Response Charge.
The system operator will then collect the money generated by the surcharge on behalf of the government on a monthly basis.
Last week, Trump temporarily paused implementation of 25 per cent tariffs on Canadians exports "compliant" with the terms of the Canada-U.S.-Mexico Agreement (CUSMA) until April 2. But both Ford and Ottawa have said retaliatory measures will move ahead until the tariffs are lifted.
"Pausing some tariffs, making last-minute exemptions — it will not cut it. We need to end the chaos once and for all," Ford said Monday.
He also reiterated his previous threat to stop flows of electricity from Ontario to the U.S. altogether if the trade war lingers on.
Asked about a specific threshold that may compel him to take that step, Ford declined to be specific.
"If necessary, if the United States escalates, I will not hesitate to cut the electricity off completely," Ford said. "Let's just see how this rolls out. [Trump] changes his mind almost every single day."
Ford’s tax plan for U.S.-bound electricity, explainedFord urged other provinces — in particular Alberta, which sends more than four million barrels of oil per day south of the border — to look at similar moves.
"A message to Premier (Danielle) Smith: one day, I think you might have to use that trump card and give approval for an export tax," he said.
"You want to talk about a trump card? That will instantly change the game, instantly, when the Americans — and I know the Americans — all of a sudden their gas prices go up 90 (cents) to $1 a gallon, they will lose their minds. So we need to at least put that in the window."
Smith has said Alberta needs to take action, but she won't curtail or impose counter-tariffs on oil and gas shipments. Saskatchewan Premier Scott Moe, who leads a province that exports vital uranium and potash to the U.S., has similarly expressed a reluctance to impose export tariffs.
Ontario won't need to buy U.S. electricity this summer: Lecce
During the news conference, Lecce noted that most of the year, Ontario sells many times more electricity from the U.S. than it purchases.
Depending on energy demands in New York, Michigan and Minnesota, those states will sometimes then re-sell surplus electricity that originated in Ontario to other states, particularly along the I-95 corridor down the eastern seaboard.
When Ontario does buy U.S.-generated electricity, it is most often in the peak summer months.
Asked if Ontario could face reciprocal surcharges come the warmer season, Lecce said the province's electricity system operator is "fully confident in its ability to keep the lights on" with power generated in Ontario and Quebec.
ABOUT THE AUTHOR
With files from The Canadian Press
Is Doug Ford's tough talk on Trump working? Experts say it might be gaining traction
Ford's aggressive remarks earn the attention of Trump's commerce secretary
Doug Ford struck his most aggressive tone to date this week as he blamed Donald Trump for "causing chaos" with his tariff threats, and experts say the attacks from Ontario's Conservative premier and appeals to the president's Republican allies might be gaining traction.
Ford came out swinging at a news conference Tuesday, the day Trump imposed 25 per cent tariffs on most Canadian goods. He levelled some of his most pointed criticism yet of the man he once praised and pledged his "unwavering" support.
Ford slammed Trump and called on Republican politicians in the U.S. Congress and Senate to push back against the president, predicting he would be punished in the 2026 mid-term elections if the impact of tariffs were felt by Americans.
"So the Congress people in the red states, you need to speak up for your people," Ford said. "Because your factories are going to be empty, they're going to be shut down, there's going to be unemployment, inflation is going to hit and it's going to hurt the American people."
Ford to impose 25% electricity surcharge on U.S.Ford even went so far as to muse about campaigning against Trump himself.
"He needs to pay the price in the mid-terms," he said. "If I've got to go down there and knock on the doors myself, I will."
Trump ally asks Ford to tone down his rhetoric
According to a report from the Globe and Mail, confirmed by CBC Toronto, that tone sparked a call from Trump's own commerce secretary Howard Lutnick. He asked Ford to ease up with his rhetoric, a request the premier refused.
Conservative strategist Shakir Chambers said Lutnick's call shows that Ford has managed to grab the attention of people in the White House and his appeals have them concerned. He's also channeling the frustrations of many Canadians who are angrily watching the tariff threats unfold.
"I have friends, and regardless of their political stripe, they're applauding how aggressive Ford is in dealing with the White House," said Chambers, vice-president of consulting firm Oyster Group.
Doug Ford poses at a WWE event in Toronto on Feb. 28. (Doug Ford/X)
Ford has been making multiple daily appearances on U.S. cable news shows since December, when the tariff threats first emerged, which have accelerated in recent days. In those, Ford has also aggressively blamed Trump for contributing to rising retail prices for Americans, something that flies in the face of the president's promise to bring down the cost of living.
Chambers said he initially dismissed the Ford team's U.S. media strategy, thinking it would be ineffective in the massive American media market. But after this week, he thinks the premier may have broken through with messages targeting American conservatives watching channels like Fox News.
"When you have American conservatives and American commentators say, 'This is a dumb idea, maybe we should back down,' I think those are the voices that Donald Trump listens to," he said. "Ford is connecting with the right audience in the US."
Ford learns hard lesson about Trump, expert says
McMaster University political science professor Peter Graefe said it's hard to take Ford's newfound aggression towards Trump seriously. During the Ontario election, Ford admitted within ear-shot of a microphone that he was happy Trump won during the November US election.
Graefe points out that Trump's views on tariffs have been clear for some time and Ford himself has learned a hard lesson about supporting the mercurial U.S. president.
"I think Mr. Ford is maybe late in discovering some features of Mr. Trump's personality or how he engages situations," Graefe said. "But the very material impacts of Mr. Trump's decisions mean that Mr. Ford has been shaken out of thinking like a partisan and having to think much more like an Ontarian."
Liberal strategist Charles Bird said Ford's tough talk may be an asset to the federal ministers who are negotiating directly with the Trump administration. He can go further in his rhetoric and play "bad cop" because he isn't sitting at the table with them, he said.
"Premier Ford has not hesitated to go at them with both barrels," said Bird, principal at Earnscliffe Strategies. "That's something that our federal ministers, and the prime minister, have to be a little more careful about."
Graefe said he is skeptical of the overall impact of Ford's rhetoric and media strategy. But thinks he is better suited, as a prominent Canadian conservative, to deliver the message of the detrimental impacts of tariffs to Americans than other Canadian politicians.
"He probably is more effective than Mr. Trudeau in reaching parts of the American electorate with the message that this is not something that Canada wants to be doing, but has no choice to do," he said. "He's not really moving the dial that much, but presumably that's better than the alternative of not moving it at all."
But Bird disagrees, and points to the call from Lutnick as evidence that Ford has gotten under Trump's skin.
"I say this as a lifelong Liberal, I would tell him to keep doing what he's doing," he said. "If this becomes uncomfortable politically for the Americans to be doing, and as we get closer to the mid-terms at the end of next year … that is significant.
"We only have so many cards to play."
ABOUT THE AUTHOR
N.B. forestry towns on edge as U.S. tariffs, duties pile up
Trump’s new measures just the latest protectionist moves adding to cost of Canadian wood for U.S. buyers
Like other New Brunswick forestry towns, the rural community of Kedgwick is on edge.
The economy of the municipality tucked in the middle of the woods in the northwest of the province relies on two major sawmills, J.D. Irving Ltd. and Groupe Savoie, and several smaller forest operations.
"The forest is the blood that runs in our veins," says Mayor Éric Gagnon.
"Around here we know what to do with a tree. Trees are really important to us. Just about the entire population, if they don't work directly with wood, a part of their work comes from it."
N.B. forestry towns face tariff triple threatSo Gagnon has been paying attention to every twist and turn in the Trump tariff saga while staying in touch by phone with the operators of the local mills.
"We're checking in with them every day or two, just to stay up to date … it's a very live issue," he said.
"It's hard to predict the unpredictable with what's happening with our American friends. Mr. Trump has a bit of a hard time staying on track."
J.D.
Irving Ltd. has one of two major sawmills in Kedgwick that are major
parts of the local economy. (Sophie Langlois/Radio-Canada)
About 24,000 New Brunswickers work in the forestry sector, and 80 per cent of the industry's output — softwood and hardwood lumber, pulp and paper, shingles, fibre and strand board — goes to the United States.
Irving, the industry group Forest NB and the New Brunswick Lumber Producers released a fact sheet last month on the threat represented by the tariffs, estimating that seven out of 10 municipalities in the province are home to at least one forestry business.
They were not giving media interviews this week.
"At this time it is too early to determine the full level of impact these tariffs will cause," Forest NB spokesperson Andy Tree said in an email statement.
"We continue working to understand the details of what the announced tariffs will mean for forest sector operations across the province."
J.D. Irving issued a nearly identical statement.
Some of the province's wood exports were already under American protectionist pressure before Donald Trump returned to the White House.
J.D.
Irving, which operates a large pulp mill in Saint John, was one of the
forestry groups that released a fact sheet detailing how tariffs would
threaten New Brunswick communities. (CBC)
In 2017 the U.S. added New Brunswick to the provinces whose softwood exports are subject to anti-dumping and countervailing duties.
U.S. competitors lobbied for the move because, they argued, increased harvesting on Crown land amounted to a larger public subsidy, which made the province's lumber artificially cheap for American buyers.
The combined duty rate is reviewed annually and this year is 14.4 per cent for all New Brunswick mills except Irving, which has an 11.5 per cent rate.
This week Trump's Commerce Department filed a notice to increase one part of that combined rate, which if adopted would increase the combined rate to 26.8 per cent for most mills and 23.9 per cent for JDI.
The administration has also launched an investigation into imposing additional duties on national security grounds.
Add the 25 per cent tariffs and it amounts to a crushing increase to the cost of Canadian softwood sold in the U.S.
"To put it simply, there's really not many Canadian softwood lumber mills that are going to be able to ship profitably into the U.S. market at the existing prices," said Dustin Jalbert, a wood products economist with the U.S. price forecasting firm Fastmarkets.
The market share for Canadian wood in the U.S. has dropped from 34 per cent in 2000 to 23 per cent last year because of multiple factors, including the duties, Jalbert said.
While
New Brunswick exports 80 per cent of forestry products to the United
States, the share of Canadian wood in the U.S. market has dropped in
recent decades. (Nicolas Steinbach/Radio-Canada)
But there still isn't enough American supply to completely replace Canadian wood, even at higher prices, and the U.S. industry couldn't ramp up to meet that demand for three to five years, he added.
"That's when I come back to the fact that market prices have to go higher to at least keep some of that Canadian supply staying into the market. So you know this is going to come to a cost of the consumer and home builders."
Irving and another major forestry company in the province are facing another challenge thanks to the Trump tariffs.
Twin Rivers Paper Company ships pulp from its Edmundston mill in a pipe across the U.S. border to its Madawaska, Maine paper mill.
The company would not comment this week on how the tariffs might affect the economics of that operation.
Irving wouldn't comment either on what the tariffs mean for the pulp it sends to the $470 million US tissue plant it opened in Macon, Ga., in 2019.
The Macon plant has already seen two expansions, the latest of which will bring employment to more than 500 people, according to a news release from the Macon area economic development authority.
Irving has a number of current job listings for the plant and would not say whether it could shift production from its New Brunswick tissue plants to Georgia to avoid the Trump tariffs.
The Holt government announced a $40 million "competitiveness and growth program" this week to help large New Brunswick companies that depend on exports, along with another $30 million to help companies diversify their markets and mitigate tariff impacts.
Gagnon said he's not sure that's enough to blunt the impact on his municipality, given how deep the industry is embedded there.
"Every part of the forestry industry, we do it here in Kedgwick, so every time there's a crisis, we're affected," he said.
ABOUT THE AUTHOR
No comments:
Post a Comment