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.
"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.
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.
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.
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."
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."
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