OTTAWA — The pace at which Alberta agrees to increase its industrial carbon tax and the regulations governing the system emerged Thursday as a key sticking point in negotiations between Prime Minister Mark Carney's government and Canada's largest oil-producing province.
Background of the Agreement
Senior officials from both levels of government have been working to finalize an agreement, as outlined in a memorandum of understanding signed by Carney and Alberta Premier Danielle Smith last November, with a target completion date of April 1. That deadline has passed, and while Smith reported progress on the criteria requiring Alberta to raise its carbon tax from $95 per tonne to $130 per tonne, she acknowledged more work is needed.
“It’s just a matter of how quickly we get there, and what the stringency will be and the benchmarking on the industry,” Smith said Thursday. “Those are kind of the things that we still just have a little bit more work to do, but we have made some progress.”
Stakeholder Reactions
The final agreement is being closely monitored by oil and gas sector leaders, who argue the policy undermines Canada's competitiveness at a time when the country is seeking to boost export capacity. Conversely, climate policy groups insist Canada cannot afford to lag in reducing emissions, with the industrial carbon tax being a cornerstone of that strategy.
Liberal MPs are also paying attention, including Steven Guilbeault, a former environment minister under Carney's predecessor, Justin Trudeau. Guilbeault resigned from cabinet the day Carney signed the agreement with Alberta and penned an opinion piece in the Toronto Star, warning the country is at a “crossroads.”
“In the coming days and weeks, the federal government will decide whether the country compromises its climate commitments or embraces a more sustainable path towards a greener future,” the Quebec MP wrote. He highlighted “worrying signs” in the deal, particularly regarding the industrial carbon tax commitments.
While the document does not specify when Alberta must reach the agreed $130 per tonne rate, Guilbeault emphasized it must be achieved by 2030. Under the federal standard established under Trudeau, provincial systems must progressively increase the tax to $170 per tonne by 2030.
“Industrial carbon pricing must be reinforced, not weakened,” Guilbeault wrote. “Carbon pricing is a pillar of Canada’s climate change strategy.”
Prime Minister's Stance
When asked about timelines on Thursday, Carney did not commit to a specific date but said it is part of the discussions. The goal, he stated, is “to have an effective, functioning carbon market with respect to the competitiveness of our oil and gas sector.” He noted that Canada's oil production is at a “record high.”
