The Alberta government has declared a decision to maintain the current frozen industrial carbon tax price for the year 2026, which diverges from federal regulations. Premier Danielle Smith made the announcement in May, revealing that Alberta would uphold the price at $95 per tonne of emissions indefinitely. Previously, the province was scheduled to raise the price to $110 per tonne next year to align with federal guidelines but has opted to retain the freeze until 2026.
According to a statement from Environment Minister Rebecca Schulz’s press secretary, the government aims to provide the industry with certainty, stability, and economic relief. The Canadian industrial carbon tax program allows provinces to enact their own schemes as long as they keep pace with Ottawa’s specified prices. The federal plan anticipates a price hike to $170 per tonne by 2030.
While the federal backstop rate is intended to be enforced if provinces lag behind, the likelihood of Prime Minister Mark Carney implementing this higher price remains uncertain, especially given the lack of action against Saskatchewan, which eliminated its industrial carbon tax earlier this year. Although legal experts like University of Calgary’s Martin Olszynski believe Alberta’s decision is permissible, the onus is on Carney to take action.
Environmental groups are urging Carney to apply the federal rate to Alberta by next year. Smith mentioned ongoing discussions with Carney to address concerns about the industrial carbon scheme and resolve differences over the federal greenhouse gas emissions cap. She emphasized the need for a balanced approach that supports economic growth while acknowledging the importance of setting the carbon price at an appropriate level.
Carney’s office has not provided a definitive response regarding the enforcement of the higher price, but Federal Environment Minister Julie Dabrusin’s office stated that Ottawa is prepared to collaborate with Alberta on a mutually beneficial path forward. Both governments recognize the effectiveness of industrial carbon pricing as a policy tool and are working towards finding common ground. Environmental advocates like Stephen Legault have expressed concerns about the potential rollback of climate change initiatives if the federal backstop is not enforced.
