Prime Minister Mark Carney said Alberta's carbon market is broken and that his office is negotiating a reform deal with the province [1, 2].
This effort to overhaul the industrial carbon pricing framework aims to close climate-policy gaps and establish a sustainable economic model for emissions. Because Alberta is a primary driver of Canada's energy sector, a failure to stabilize its carbon market could undermine national climate targets.
Carney met with Alberta Premier Danielle Smith in Ottawa on Friday, May 8 [3, 2]. During the discussions, the prime minister said that he and the premier are making progress on a potential memorandum of understanding to restructure the market [1, 2].
Premier Smith said that the federal government is aligned with her timeline for these changes. "The prime minister shares my urgency," Smith said [3].
Central to the ongoing negotiations is a proposed industrial carbon price that would rise to $130 per tonne by 2040 [4]. This price floor would provide a predictable trajectory for heavy emitters, and industrial operators within the province.
Carney said the current state of the Alberta market is untenable. He said that a new framework is necessary to set a functional industrial carbon price and address existing systemic failures [1, 2].
“"The carbon market in Alberta is broken."”
The push for a memorandum of understanding suggests a shift toward a cooperative federal-provincial approach to carbon pricing, moving away from the legal and political friction that has characterized previous climate policy disputes in Alberta. By setting a clear price target for 2040, the government aims to provide industrial certainty while maintaining a commitment to emissions reductions.
