Alberta Premier Danielle Smith has declared that the pace for increasing the province's industrial carbon tax to a new minimum of $130 per tonne must be determined by what the industry can financially sustain.
New Energy Deal Sets the Stage
The premier's comments came immediately after she signed a significant new energy and pipeline agreement with Prime Minister Mark Carney. This deal secures the federal Liberal government's support for constructing a new Alberta-to-British Columbia bitumen pipeline and grants Alberta an exemption from a suite of federal clean electricity regulations.
Smith made these statements in an interview with the National Post on Thursday, November 28, 2025, fresh from the deal's announcement.
Carbon Tax Commitments and Negotiations
A central component of the agreement, which Prime Minister Carney has highlighted as a major achievement, is Alberta's commitment to strengthening its industrial carbon tax. Premier Smith had previously frozen this tax at $95 per tonne earlier in the year. This contrasts with the current federal standard, which requires carbon pricing systems to increase steadily to reach $170 per tonne by 2030.
The new pact commits both the Ottawa and Alberta governments to collaborate on long-term carbon pricing for the oil, gas, and electricity sectors through Alberta's provincial TIER system. Both governments have agreed that this system "will ramp up to a minimum effective credit price of $130/tonne."
When questioned about the target year for reaching the $130 per tonne price, Smith stated, "we have to negotiate that." She explained that the province must negotiate with various partners, including a consortium of oilsands companies planning a massive carbon capture and storage project.
Balancing Competitiveness and Climate Policy
Smith noted that while these industrial partners are involved in carbon pricing discussions, they are also focused on expanding production. She emphasized that setting the tax too high could jeopardize Alberta's competitive position relative to the United States.
"We've got to gauge that. We've got to see what is happening in the global market. We've got to see what's reasonable," the Premier said.
Pressed on whether the new $130 per tonne minimum could be achieved by 2030, Smith was clear about her position: "it's got to be at a level that the industry can afford."
She clarified that the next steps for Alberta's carbon pricing policy will be the subject of further negotiations with Carney's government, which are scheduled to be concluded no later than April of next year.
"We wanted to send the signal that we're open to having a discussion about what it should be, but that hasn't been determined yet, how quickly it's going to rise, or what the ultimate top price would be," Smith concluded.
Industrial carbon pricing remains a cornerstone of Prime Minister Carney's climate policy. His government's budget from November 4 also pledged to develop a "post-2030 carbon pricing trajectory" in collaboration with provinces and territories.
