NextFin News - Ontario Premier Doug Ford said Canada should prepare to cut off electricity and critical minerals to the United States if the trade fight deepens, moving the dispute from tariffs on goods to threats against the integrated energy and resource backbone that North American industry was built on.
Speaking in an interview published Monday, Ford said "everything is on the table" after Prime Minister Mark Carney suspended trade negotiations late Friday, hours before 50 percent U.S. tariffs on roughly $20 billion of Canadian goods took effect.
"I'll cut them off," Ford said of critical minerals. "You won't get a grain of sand out of Ontario."
The statement marks the most pointed escalation yet from a Canadian provincial leader in a dispute that has now run through threatened duties, collapsed talks, enacted levies and promised retaliation — and it puts two commodities at the center that neither side has previously treated as bargaining chips: the electrons flowing over a shared grid and the metals inside American factories.
The Threat And What It Targets
Ford framed the dispute in stark terms, saying Ronald Reagan would be "throwing up" over President Donald Trump's trade policies and "disgusted with President Trump," noting that Trump keeps a portrait of Reagan near his desk. He accused Washington of trying to hollow out the Canadian economy.
"He wants to bleed out every single sector and bring them down to the U.S.," Ford said.
Beyond minerals, Ford said Ontario could raise electricity prices or stop sending power south, and he called on the federal government to consider oil and potash as additional leverage. "We power 1.5 million homes and businesses," he said. "Everything's on the table. I'll do whatever it takes."
The exposure behind the threat is real and concentrated. Canada exported 35.6 million megawatt-hours of electricity to the United States in 2024, worth $3.13 billion — enough to power more than 3.3 million American homes, according to data compiled from the Canada Energy Regulator and the U.S. Energy Information Administration. Ontario is the single largest provincial exporter, accounting for more than one-third of the total. New York alone imported 8.6 million MWh worth $491 million, 77 percent of it from Ontario, and five border states — New York, Minnesota, Vermont, Michigan and Maine — took 78 percent of all Canadian power exports across 86 cross-border transmission lines.
The mineral exposure is wider still. The United States is Canada's top critical-minerals trading partner, buying $28.8 billion of Canada's $49.4 billion in critical-minerals exports in 2025 — roughly 57 percent of the total, according to Natural Resources Canada. Canada runs a $20.2 billion surplus with the U.S. in critical minerals. Nickel, the metal Ford singled out by name, accounts for about 9 percent of critical-minerals export value, while aluminum, copper and potash make up the bulk of the rest. Canada is also the world's second-largest uranium producer and a top-five producer of aluminum, cobalt, lithium and nickel, giving the threat reach into both power generation and battery supply chains.
Market Reaction: A Loonie That Has Already Priced A Lot
The Canadian dollar absorbed the latest escalation without a fresh rout. USD/CAD traded at 1.3787 on August 24, up a fraction on the day but stronger over the past month, suggesting investors are treating the tariff round as another turn in a long negotiation rather than a regime break. That calm is partly arithmetic: the 50 percent duties cover about $20 billion of goods, roughly 5 percent of Canada's annual exports to the U.S., not the economy-wide barrage that was threatened earlier in the year.
The quiet currency masks where the risk has migrated. Canadian utilities with cross-border sales and miners shipping nickel, copper and aluminum south carry the direct exposure, while the broader Toronto equity index remains sensitive to each tariff headline. Ottawa has promised dollar-for-dollar retaliation beginning September 8, targeting U.S. steel, electronics and other sectors, and U.S. Trade Representative Jamieson Greer has said Washington will respond to any Canadian countermeasures. The more consequential repricing, if Ford's threats harden into policy, would be a wider risk premium on Canadian resource and power projects — a slower, less visible move than any daily currency print.
Why A Cutoff Threat Lands Differently From A Tariff
A tariff is a tax at the border; a cutoff is a physical interruption. That distinction is what makes Ford's language more than bargaining noise. Electricity between Ontario and the northeastern and midwestern United States flows over an integrated grid tied together by 86 cross-border transmission lines. Power sales are not just revenue for Ontario — they are a pressure valve for the provincial grid, letting generators sell surplus output when local demand is low and import when it is high. Severing those flows would not simply deny the U.S. supply; it would remove a market for Ontario generators and force the province to manage excess power inside its own system, with costs that fall on local ratepayers.
The same logic runs through critical minerals. Canada's appeal to U.S. buyers rests on reliability and shared standards — the argument that North American supply chains can be rewired away from China only if Canada is seen as a predictable supplier. An export cutoff would prove the opposite: that political risk in Canada can bind as tightly as any geography. For U.S. automakers and defense contractors already scrambling to qualify non-Chinese sources of nickel, graphite and rare earths, a Canadian cutoff would not redirect supply to friendly hands; it would widen the shortage on both sides of the border.
There is also a timing question that undercuts the threat's immediate bite. Canadian electricity exports to the U.S. have already been falling — down 28 percent in 2024 from the prior year, the second consecutive annual decline, with volumes ranging between 16.2 million MWh in 1990 and a peak of 73.5 million MWh in 2016. A cutoff threat lands hardest when exports are at their peak; deployed against a declining flow, it signals more about political intent than immediate economic pain.
Ontario has already used a narrower version of this lever. In an earlier tariff episode, the province applied a 25 percent surcharge — $10 per megawatt-hour — to electricity exports bound for Michigan, Minnesota and New York rather than cutting flows outright. The choice of a price weapon over a physical cutoff is itself evidence of the constraint: a surcharge raises revenue; a cutoff destroys a market.
The 2018 Precedent And What It Does Not Cover
The cyclical read has history on its side. The 2018 steel and aluminum dispute between the same two countries followed a familiar arc: Section 232 duties, Canadian counter-tariffs calibrated to hit politically sensitive U.S. products, and eventual unwinding as part of the USMCA renegotiation. On that record, Ford's lever belongs to a playbook that gets put back on the shelf once a deal is struck.
But the precedent cuts both ways. In 2018, neither side reached for energy or critical-mineral exports as a weapon, even at the peak of the fight. The restraint reflected an unwritten rule that some flows were too intertwined to touch. Ford's statement breaks that norm explicitly. Once electricity and minerals are named as legitimate leverage, the floor for what is thinkable in the next dispute moves up — and the next dispute does not need to wait for the current one to end.
The Cyclical Fight Riding A Structural Break
The immediate driver is cyclical: this is a retaliation cycle, and retaliation cycles tend to peak and then get negotiated down. Tariffs were threatened, talks opened, talks collapsed, duties took effect, and now officials on both sides are naming the next rung of the ladder. On that history, the pattern is mean-reverting.
But beneath the cycle, something structural is shifting. For decades, North American energy and minerals policy was built on the assumption that integration itself was a deterrent to conflict — that grids, pipelines and smelters wired across the border made coercion too costly for either side. Ford's statement treats that integration not as a shield but as a target. Once that premise flips, the damage does not reverse when the tariffs come down. U.S. buyers will have been given a reason to qualify alternative suppliers; Canadian producers will have been marked as politically exposed. Investment in cross-border energy and mining projects carries a longer memory than any single trade round.
The two forces should not be blended. The cyclical leg says the specific threats may never be implemented, because both sides retain an interest in returning to a deal. The structural leg says the episode still raises the long-run cost of doing business across the border, regardless of the outcome.
The Second-Order Cost Canada Would Pay
The first-order effect of a cutoff is obvious: the U.S. loses supply. The second-order effect runs the other way. Canada's critical-minerals strategy depends on foreign capital flowing into mines and processing plants, and capital prices political risk. If Ottawa or a major province demonstrates it will weaponize exports, the discount investors apply to Canadian projects widens — and that discount persists after the dispute ends. The same is true for electricity: export revenue helps keep Ontario power costs lower for local ratepayers; cutting that revenue shifts the burden home.
This is the gap the market has not fully priced. Investors are watching the tariff rate and the dollar value of affected goods; they are watching less closely the change in the perceived reliability of North American supply chains. A 50 percent tariff on $20 billion of goods is a large, measurable hit. A durable increase in the risk premium on Canadian resource and power assets is smaller in any single quarter but compounds across every project that needs financing over the next decade.
The Counter-Thesis
The strongest case against reading this as a structural break is that Ford can only speak for Ontario, and Ontario's own incentives run against following through. The province has already chosen a surcharge over a cutoff because a cutoff hurts its own grid economics. The federal government in Ottawa has shown equal restraint, matching U.S. duties dollar-for-dollar rather than reaching for supply chokepoints.
"Despite the U.S. offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk backs of other commitments by Canada have upended the careful balance reached in the past days," U.S. Trade Representative Jamieson Greer said, calling the collapse a "missed opportunity."
On this reading, the rhetoric is bargaining noise: loud enough to satisfy a domestic audience, calibrated not to cross a line that would be costly to uncross.
That argument holds only while the threats remain threats. The specific signal that would falsify it is implementation: an Ontario order or federal regulation that physically restricts power flows or mineral exports to the U.S., or an expansion of the existing electricity surcharge beyond the three states already affected. Absent that, the bargaining-noise reading stands.
What Comes Next
Three scenarios frame the path from here. The base case is more rhetoric and targeted measures without an immediate cutoff: both governments have too much to lose from severing integrated infrastructure, and the political utility of the threat exceeds its practical value. Canadian equities and the currency stay sensitive to headlines, while U.S. buyers of Canadian power and metals accelerate supplier qualification as a hedge rather than an immediate switch.
The upside case for stability is a return to negotiations with a tariff-rollback timeline — that would confirm the cyclical read and let the loonie and cross-border utilities recover ground. The downside case is a prolonged stalemate past the September 8 retaliation date, which would let the structural damage accumulate quietly, project by project, even without a single watt being cut.
In the long term, the question is whether North American energy and minerals integration survives as the organizing assumption of continental industrial policy. Ford's statement is the clearest signal yet that a Canadian official now sees that integration as a vulnerability to be managed, not a fact to be relied upon. If that view hardens into policy, the continent's supply chains will be smaller, more redundant, and more expensive — even after the tariffs are gone.
The tariff is the weapon both sides understand; the real shift is that the grid and the mine are now on the bargaining table, and putting them there changes the deal even if they are never touched.
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