Alberta plans to continue holding a freeze on industrial carbon prices in the year 2026, placing the responsibility of action on Ottawa.
Alberta Premier Jason Kenney has announced a freeze on the industrial carbon tax price for 2026, setting a rate of $95 per tonne of emissions. This decision comes amidst ongoing discussions between Premier Kenney and Prime Minister Mark Carney regarding the federal industrial carbon pricing scheme.
Initially, Alberta was scheduled to increase the price to $110 per tonne in 2026, in line with the federal carbon tax program that allows provinces to implement their own policies as long as they meet federal pricing. However, Premier Kenney has expressed concerns that some proposals to reach the federal carbon tax price of $170 per tonne by 2030 could be job-killing and project-killing.
Stephen Legault, a senior manager for advocacy group Environmental Defence, has stated that neither Alberta nor Ottawa seem to think the policy is effective. He added that it would be astonishing if the federal government under Carney enforces the backstop rate. Legault further suggested that Carney is embarking on a systematic rollback of climate change efforts.
Environmental groups have called on Carney to enforce the federal rate on Alberta come next year. Experts say Alberta's move doesn't break any laws, but puts pressure on Carney to act. If provinces fall behind, the federal backstop rate is supposed to be implemented, but it's unclear if Prime Minister Carney will enforce a higher price.
In response, Federal Environment Minister Dabrusin's office stated that Ottawa is ready to collaborate with Alberta on a new path forward. Alberta Premier Smith has also stated that they have sent a signal to the prime minister and the market that the current industrial carbon price of $95 per tonne is what the market can bear.
Prime Minister Carney's office did not immediately respond to questions about enforcing the higher price. Meanwhile, Saskatchewan dropped its industrial carbon price completely earlier this year, and Carney has not taken action against them.
Premier Smith acknowledged the importance of the industrial carbon pricing lever, but emphasized the need to set the price correctly. He is currently in discussions with Prime Minister Carney to address concerns about the industrial carbon scheme. The future of carbon pricing in Alberta remains uncertain, with both the provincial and federal governments seeking a mutually beneficial solution.
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