Alberta Premier Danielle Smith and Prime Minister Mark Carney appear to be on the cusp of finalizing a significant agreement on industrial carbon pricing, with a target of $130 per tonne by 2040 emerging as a key benchmark, as per reporting by the Calgary Herald. Following a 45-minute meeting in Ottawa on May 8, Smith expressed optimism that a framework for the deal could be announced within a week.
Under the proposed plan, Alberta’s effective carbon price, currently frozen at $95 per tonne under the Technology, Innovation and Emissions Reduction (TIER) system, would see staged increases over the next 14 years to hit the $130 mark.
A source familiar with the discussions confirmed that both sides have aligned on this timeline, despite missing an earlier deadline in April due to disagreements over the pace of the hike. Mechanisms such as a floor price and contracts for difference are also under consideration to stabilize the carbon trading market.
This carbon pricing accord forms part of a broader memorandum of understanding signed five months ago, which also addresses energy and environmental priorities. Among them is Ottawa’s commitment to fast-track federal approval for a proposed bitumen pipeline to the British Columbia coast by designating it a project of national importance through the Major Projects Office.
Smith emphasized the strategic value of this infrastructure, stating: ‘We’ve made our case that if we want to have an advantage in accessing Asian markets, then the best way to do that is to build a pipeline that is the shortest route to those Asian markets.’
However, the pipeline’s progress remains tied to the Pathways carbon capture project, a $20 billion initiative aimed at decarbonizing oilsands operations in northern Alberta. The project awaits approval from the Oil Sands Alliance, casting uncertainty over the timeline for both endeavors.
Smith described the recent talks with Carney as productive, noting that officials have been directed to iron out remaining details in the coming days. ‘We’re still inking the deal, and we just have to make sure that some of the undertakings that the prime minister and I had are worked out,’ she said.
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