Smith freezes carbon price at $95/tonne, citing US tariffs and risk to industry investment
Alberta Premier Danielle Smith announced Monday that the province is freezing its industrial carbon price at $95 per tonne effective immediately.
CBC News reports that the decision halts a previously scheduled increase to $110 in 2026 and $170 by 2030.
Smith said the measure is intended to defend jobs and maintain competitiveness as Canada responds to new tariffs from the United States.
“With the change in government south of the border, it is essential that we have a reasonable carbon pricing system, not one that will price our industries out of global markets,” she said.
According to a government release cited by CBC News, US tariffs are “increasing costs, disrupting supply chains and creating uncertainty for industry.”
Freeze to remain indefinitely, province says it will stay federally compliant
Environment Minister Rebecca Schulz stated that carbon prices above $100 per tonne would make Alberta “wildly uncompetitive.”
She said the indefinite freeze does not compromise Alberta’s emissions targets, adding, “We are absolutely a leader when it comes to energy and resource development, but also when it comes to emissions reduction.”
Schulz told reporters that Alberta’s system will remain compliant with federal benchmarks until Ottawa’s own carbon price standard increases.
Alberta’s industrial carbon pricing scheme has existed since 2007 and uses revenue to fund emissions-reduction technology and innovation grants.
Federal benchmark and industry impact under scrutiny
As explained by the Canadian Climate Institute, all provinces and territories can implement their own large-emitter trading systems, provided they meet the federal benchmark.
These carbon pricing systems—also called LETS—are Canada’s most significant policy for reducing greenhouse gas emissions by 2030.
According to Institute research with Navius Research, industrial carbon pricing will account for between 20 and 48 percent of Canada’s emission reductions by 2030.
Alberta’s own pricing system previously accelerated the phaseout of coal-fired electricity.
The Institute also noted that these systems have “next to no impact” on household costs, averaging zero percent change to household consumption in 2025 and just one-tenth of a percent by 2030.
Industry support and warnings of investment risk
The Canadian Association of Petroleum Producers supports the freeze.
President Lisa Baiton urged the federal government to reset its carbon regulatory framework, stating, “Changes are necessary to establish a long-term signal to lock in investments and to reduce emissions, while remaining globally competitive.”
Pathways Alliance president Kendall Dilling called the move a recognition of the competitiveness pressures facing Canada’s oil sector.
He added, “Additional discussion is needed to enable an approach to carbon management that is effective and enables investment in our natural resources.”
According to the Canadian Climate Institute, Alberta companies currently hold about $5bn in carbon credits that would lose value if the system were dismantled.
Around $4.3bn in annual clean energy investments are linked to the current pricing regime.
Projects at risk include a $9bn carbon-neutral petrochemical facility near Edmonton and a $1.4bn low-carbon cement plant in Alberta.
Critics say freeze undermines clean investment
Environmental Defence’s Stephen Legault said the move would reduce funding for clean technology and delay Alberta’s 2050 carbon-neutral target.
“A lot of us would agree Alberta isn't serious about hitting those targets,” he said. He also suggested the decision may reflect a preference for the oil and gas sector rather than responses to American tariffs.
Janetta McKenzie of the Pembina Institute warned the freeze could discourage decarbonisation investment, especially as other countries implement carbon border adjustments.
“We are going to need a leaner, cleaner oil and gas sector that is ready to compete in global markets,” she said.
Opposition calls out uncertainty and political motives
Opposition NDP energy critic Nagwan Al-Guneid argued that the freeze creates more uncertainty for industry, rather than offering stability.
“I think the biggest threat right now to our economic competitiveness is this flirtation with the separatist agenda, and not Alberta's industrial carbon pricing,” she said.
Smith and Schulz said they hope the federal government, led by Prime Minister Mark Carney, will engage in further discussions.
Carney is expected to announce his first cabinet Tuesday.
The Prime Minister’s Office has not responded to requests for comment, as per CBC News.
