Alberta to Freeze Carbon Price

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Justified as a way to counter the tariffs imposed by the United States, the provincial government of Alberta said it was freezing a carbon tax at its current rate in an effort to remain competitive.

"This freeze will provide certainty, stability and economic relief to the businesses that contribute so much to all of Canada," Alberta Premier Danielle Smith, a member of the Conservative Party, said Monday. "With the change in government south of the border, it essential that we have a reasonable carbon pricing system, not one that will price our industries out of global markets."

Smith's government said it would freeze the carbon price at US$68 per metric ton of emissions. It had been scheduled to increase to $78.75 next year and reach $120 per metric ton by 2030.

Her government said the freeze provides economic certainty for provincial businesses, from the oil and gas sector to forestry. Though U.S. President Donald Trump had offered some concessions for Canadian goods such as oil and gas, the tariffs are a deep source of contention between two countries that previously enjoyed the benefits of a free-trade agreement.

Irked by the positions from the government of Prime Minister Mark Carney, a Liberal, Smith said the pause would be a net benefit for the provincial economy.

"This is provincial jurisdiction, and we will not needlessly burden our businesses with further increases dictated by Ottawa that would be detrimental to our economy," she said.

Smith has been at odds with the government of Ottawa since before Carney solidified his role as prime minister through snap elections in April. Liberals at least for the last 10 years have pushed for a balanced energy policy, though the tariff threat has upended some of that agenda.

"The current tariffs imposed by the United States come after a decade of anti-industry and anti-development policies by Canada's federal government," Alberta's government said. "These rules and regulations have decreased Alberta's competitiveness, increased uncertainty and driven away much needed investment since 2015."

Though energy was left out of U.S. tariffs on Canada, Alberta may be among the provinces facing the brunt of the economic pain due to its vast natural resources, including timber.

Like tubular steel and critical minerals, the United States doesn't produce enough soft timber to meet its domestic needs. Valued at around $8 billion, Canadian timber accounts for about a quarter of U.S. consumption.

And while exempt, Alberta alone accounts for the bulk of the oil produced in Canada and much of that, some 4 million barrels per day (BBL/d), heads to the United States, representing 60% of total U.S. oil imports.

But despite the differences with the Alberta government, Carney said he would be aggressive in his pursuit of energy security and trade diversification for the sake of national interest.

North American trade corridors, however, are highly integrated. Vehicles cross the border several times before they roll off the assembly line and the Canadian oil and gas network is tied almost exclusively to the United States.

Justifying its stance on emissions, meanwhile, the provincial government of Alberta said it's made strides on controlling the pollution from the oil and gas industry while ensuring adequate supplies.

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