Carbon Tax Increases to $170 by 2030 Could Cost Workers $1,160 in Annual Income and 50,000 Jobs, Study Finds
A new report from the Fraser Institute warns that the federal government's plan to raise the national industrial carbon tax to $170 per tonne of greenhouse gas emissions by 2030 could have severe economic consequences for Canadian workers and the overall economy.
Economic Impact and Job Losses
The study estimates that this carbon price hike would result in an average loss of $1,160 in annual income per worker across Canada, alongside a reduction of 50,000 jobs nationwide. Additionally, the Canadian economy is projected to shrink by 1.3% compared to a scenario where the carbon price remains frozen at the current level of $95 per tonne.
Elmira Aliakbari, director of natural resource studies at the Fraser Institute and co-author of the report, emphasized the need for policymakers and the public to understand these significant costs. "Policymakers — and all Canadians — need to understand the significant costs further carbon price increases would impose," she stated.
Alberta Faces the Hardest Hit
The economic impact is predicted to be most severe in Alberta, where the carbon price is currently frozen at $95 per tonne. According to the study, workers in Alberta could lose $1,730 in annual income, with the province alone facing 10,000 fewer jobs. This disproportionate effect highlights regional disparities in the carbon pricing framework.
In November 2025, Prime Minister Mark Carney and Alberta Premier Danielle Smith signed a memorandum of understanding aimed at raising the carbon price in Alberta to $130 per tonne by April. However, reports suggest that negotiations may extend beyond this deadline, with the current effective carbon price in Alberta around $20 per tonne due to surplus carbon credits available to large emitters.
Long-Term Consequences and Investment Plans
The report also forecasts negative impacts on capital earnings, including interest, dividends, and capital gains. This could lead to reduced or cancelled investment plans, further contributing to long-term declines in Canadian living standards. The carbon price is scheduled to increase by nearly 16% to $110 per tonne on April 1, as part of the incremental rise to $170 by 2030.
As debates over climate policy and economic stability continue, this study adds to the ongoing discussion about balancing environmental goals with financial well-being for Canadians.
