Thank you for the opportunity to providecomments on strengthening industrial carbon pricing and securing major clean energy investments. Canada’s Climate Competitiveness Strategy is not only about reducing emissions—it is also about building a resilient economy, creating good jobs, protecting affordability for Canadians, and securing our position as a global leader in the clean energy transition. At a cost of a “Timbit per barrel” of oil and with virtually no impact on families, leading experts indicate that industrial carbon pricing can improve the international competitiveness of Canadian firms, and has the potential to drive one-third of Canada’s total emissions reductions. We appreciate this review and provide the following comments: We thank the Government of Canada for considering these comments and for its leadership in advancing industrial carbon pricing to achieve Canada’s climate, economic, and social goals. Providing clear, predictable, and stable carbon pricing is essential, as Canadian businesses require certainty to make the investments necessary for decarbonization and long-term competitiveness.
We ask that the government commit to maintaining the annual increases to the federal “headline” carbon price (currently $110/te) to $170/te of greenhouse gas emissions by 2030, and also establish how the price will be increased after 2030.
Details: The federal government first set a price of $20/te of emissions in 2019 and later laid out a schedule to increase it annually to $170/te by 2030. Future guidance beyond 2030 has not been provided. As this deadline approaches, investors need certainty about carbon pricing to drive innovation and reduce emissions. Added uncertainty arises from the recent Canada-Alberta Memorandum of Understanding committing to a minimum effective carbon price of $130/te.
We support the federal government’s commitment to periodically review provincial and territorial industrial carbon pricing systems to ensure they conform to the federal Benchmark and, where these fall short, to impose the federal Backstop (Output-Based Pricing System).
Details: The Discussion Paper identifies challenges where provincial and territorial systems do not meet the federal Benchmark. While some flexibility is warranted, conformance is essential to maintain confidence in Canada’s industrial carbon pricing system and achieve national emission reduction goals. The Discussion Paper notes that “Improvements to the federal Benchmark and its application are needed to address these challenges.”
We support addressing the issue of oversupply of emissions reduction credits, which lowers the market price below the national “headline” carbon price.
Details: Excess credits must be addressed. The market price of these credits, not the government’s headline price, sets the real carbon cost. For example, in Alberta, excess credits traded for about $30/te in 2025, despite an official carbon price of $95. The government should consider tightening provincial emissions standards, addressing unused credits (almost $50 million in Alberta), and evaluating offset credit impacts.
We support addressing the issue of “offset” credits, which have often proven to be of questionable value.
Details: Setting eligibility standards for offset credits is essential, as these credits are often of limited value.
We support increased transparency of provincial and territorial industrial carbon pricing systems.
Details: Provincial and territorial systems must be transparent regarding design, annual emissions subject to pricing, credit trading prices, and market operations. This ensures public confidence and aids evaluation of carbon markets.
We support expanding the scope of coverage of the federal benchmark.
Details: Scope coverage must be addressed to achieve national emission reduction goals. Differing thresholds and the removal of consumer carbon pricing reduce incentives for smaller facilities (emitting 10 kte+ annually) to participate.
We are concerned about potential conflicts between this consultation and the Canada-Alberta MOU, both addressing federal Benchmark stringency.
Details: Conflict may arise because the MOU commits to sector-specific stringency factors for large Alberta emitters in oil, gas, and electricity sectors by April 1, 2026.
