OP-ED: Picking fights with Trump could leave Canada in the dark
"A political dispute could put both the power supply and billions in provincial revenue at risk."
Author: Joseph Quesnel
Ottawa has been pushing to diversify trade from United States markets, but geography trumps policy when it comes to electricity. Our power grids intertwine so deeply that this is no ordinary trade relationship. They keep the lights on in both our countries.
Electricity has dodged tariff bullets so far, but three longstanding trade irritants could explode if tensions escalate. Americans maintain longstanding complaints about subsidized provincial utility rates, claim limited access to Canadian markets while we sell into theirs, and cross-border transmission projects bog down in red tape.
Several provinces depend on U.S. imports. New Brunswick leads, followed by P.E.I., Nova Scotia and Ontario. They need American power for peak demand and maintenance backup.
Cross-border electricity imports provide grid balancing, cheaper energy access, emergency backup and seasonal optimization. Losing imports means compromised reliability, pricier domestic generation, reduced industrial competitiveness and higher consumer energy costs.
The export stakes run higher. According to Natural Resources Canada, electricity exports to the U.S. generate several billion dollars annually, with Quebec, Manitoba and British Columbia accounting for most of that trade. American restrictions could wipe out billions in revenue, seriously affecting provincial budgets that rely on energy exports.
But the Trump administration has already shown it is willing to accept domestic economic costs when imposing tariffs on trading partners, so electricity may not stay protected forever. Grid reliability concerns may not stop retaliation if tensions escalate.
The current B.C. government should exercise double caution given its anti-American rhetoric. B.C. risks losing significant electricity trade if provincial politicians make intemperate remarks.
Those risks are magnified by how Canada now generates much of its electricity. Canada’s abundant hydroelectric resources create what are often described as “low emissions” electricity advantages, but concentrating relationships around hydro also increases exposure when cross-border electricity trade becomes politically vulnerable.
Over the past decade or so, Canadian policy has shifted from hydrocarbons for electricity generation, increasing reliance on weather-dependent sources. Hydro proves more predictable and secure than wind or solar but still depends on weather and water levels. Quebec and B.C. have experienced droughts that reduce hydroelectric output and limit exports in the recent past, demonstrating how domestic conditions can affect cross-border electricity flows.
We have decommissioned reliable fossil fuel power plants that can be turned on when needed, reducing flexibility while increasing weather dependence. Combined with potential trade disruptions arising from political disputes, this loss of flexibility increases Canadian energy security risks.
Because Canada’s grid is deeply integrated with the U.S. and our domestic flexibility has narrowed, Ottawa must manage this relationship carefully. It should engage proactively with U.S. counterparts, emphasizing mutual benefits such as grid stability, lower costs for American consumers and system reliability.
Work with provinces developing contingency plans for disruptions. Identify key vulnerabilities, map alternative sources and invest in grid flexibility capable of handling sudden cross-border flow changes. We need more dependable natural gas and, yes, coal-generated electricity on our grids. More provinces should adopt nuclear power, especially more easily deployed small modular reactors (SMRs).
The path requires diplomatic finesse combined with practical planning. Canada should continue emphasizing the mutual benefits of electricity trade while preparing for potential disruptions. Shared power grids bring real reliability and economic benefits, but they also require careful diplomacy.
When lights go out, nobody cares about positioning or diplomatic “victories.” They want power restored. Canadian policymakers must keep this reality front and centre when dealing with our unpredictable neighbour.
Smart policy means long-term thinking with short-term disruption preparation. We have excellent resources and geographic advantages, but we need leaders with political wisdom to protect them. We can start by recognizing that some relationships prove too important to risk over diplomatic point-scoring.
Joseph Quesnel is a senior research fellow with the Frontier Centre for Public Policy.