The Canadian government is nearing an agreement with Alberta on a carbon price for energy producers and other industrial sectors, but negotiations continue over the speed of implementation.
Background of the Agreement
Prime Minister Mark Carney and Alberta Premier Danielle Smith agreed last year on an industrial carbon price of C$130 ($95) per metric ton, with a goal to finalize a deal by April 1. That deadline was missed, but progress is being made, Smith stated during a press conference on Thursday.
“It’s just a matter of how quickly we get there, and what the stringency will be, and the benchmarking on the industry,” the premier said. Bloomberg News reported Wednesday that a deal is expected within the next two weeks.
Industry Concerns
Some energy executives argue that carbon pricing undermines Canada’s global competitiveness, especially amid supply shocks from the Iran war, which highlight the need for reliable Canadian oil. The timeline of the carbon measures will significantly impact the economic burden on oil and gas companies. If the C$130 level is imposed by 2030, as environmental advocates urge, the costs will be higher than if the target is pushed further into the future.
Memorandum of Understanding
Smith and Carney signed a memorandum of understanding last year that included the carbon price and other measures, while also paving the way for a new crude pipeline to Canada’s west coast—a key demand for oil-rich Alberta.
On Thursday, Carney reiterated that the C$130 price has been agreed upon but did not specify a target date. “It’s part of our discussions,” the prime minister said.
Political Reactions
Former environment minister Steven Guilbeault, who resigned from Carney’s cabinet over the pipeline agreement, published an opinion piece in the Toronto Star on Thursday calling for industrial carbon pricing to be reinforced, not weakened. He argued that the effective price should reach C$130 by 2030. Guilbeault had served as environment minister under former Prime Minister Justin Trudeau.
Think Tank Concerns
The Pembina Institute, a climate and energy policy think tank, expressed concern that the governments failed to meet their own deadline. In an open letter, executive editor Chris Severson-Baker called the commitment to industrial carbon pricing “crucial” and urged that it be achieved by 2030.
Credits and offsets in Alberta’s TIER carbon market have been trading significantly below the provincial carbon price, undermining the economics of green technology investments, as they would not generate sufficient revenue.
