By: Marie Jen Galilo, Staff Writer
On May 15, 2026, Prime Minister Mark Carney and Alberta Premier Danielle Smith signed an agreement that permits Alberta to use its own carbon pricing system instead of the federal one, and outlines the construction of the West Coast pipeline. The agreement also pauses the Canadian Electricity Regulations (CER) in Alberta while the regulations are argued in the provincial and/or federal court. These regulations were designed to help Canada reach “net-zero emissions by 2050.” The adjusted carbon pricing saves Alberta’s oil industries “$250 billion in compliance costs” and provides a baseline carbon credit price to address Alberta’s carbon market flood. The pipeline, on the other hand, would increase the profit of oil industries by $3.16 billion 15 years after the pipeline is built. However, these economic benefits mean nothing if it requires us to sacrifice our climate change goals of reaching net-zero by 2050.
Alberta and the rest of Canada will now be working towards a headline industrial carbon price of $130 by 2035 and then a yearly increase to $140 over five years. This is $30 less per megatonne than the original target set in 2023. The “headline price” is what large-emitter companies must pay to the government as a form of monetary punishment if they exceed their assigned emission thresholds. Companies that fall below the threshold earn credits which can be purchased by the companies that exceed the threshold as an alternative to paying the government directly. The carbon credit price is the price at which carbon credits are sold. This pushes Canada a decade back from achieving its goal of a 40% decrease in emissions in 2030 relative to emission levels in 2005. We have no more room for error, and yet we’re compromising our goals in pursuit of profit.
Alberta will also aim for a carbon credit price of $130 by 2040, however the current carbon credit market has a large surplus due to years of stored credits. This has led to carbon credits costing closer to $20 per megatonne instead of the current headline carbon price of $95. Large-emitting companies that exceed their emissions threshold are more likely to purchase cheap carbon credits rather than pay an expensive headline carbon price. The discrepancy between carbon headline and credit prices ultimately obliterates the punitive purpose of the carbon pricing system so that these prices no longer dissuade companies from exceeding their emission benchmarks.
An analysis by 440 Megatonnes and Navius Research reinforces that the CER is needed to achieve our goals with its strong carbon pricing. Applying this new agreement’s weaker carbon prices along with the 20 megatonne of emissions from oil extraction prevents Canada from reaching net-zero by 2050. A strong carbon market that starts at $130 and increases by $5 per tonne each year with the CER plus the pipeline puts Canada on track for achieving its emission reduction goals.
We must also consider how the West Coast Oil Pipeline would affect Indigenous communities and their lands. While the exact route of the pipeline is still being finalized, it is predicted to cross into either the coast of northern BC or Roberts Bank in Delta. Coastal First Nations (Gitga’at, Gitxaała, Haida, Heiltsuk, Kitasoo Xai’xais, Metlakatla, Nuxalk, and Wuikinuxv First Nations) have expressed their opposition to the pipeline saying, “Governments and would-be proponents should be aware of our absolute determination to protect our economy and our coast” and that “there is no technology that can clean-up an oil spill at sea, and one spill could destroy our way of life.” Respecting First Nations and acknowledging ownership over their lands is crucial in the ongoing process of reconciliation.
This new agreement shows Carney’s plans to combat climate change are illusory. The agreement also aims to “double Canada’s electricity grid” and power it using clean energy, but if we’re expanding natural gas industries and using it as a crutch, we’re tethering ourselves to the very emissions we’re trying to escape from. Transitioning to clean electricity with less dependence on natural gas is a crucial step that safeguards both the environment and the Canadian economy, it reduces emissions while also avoiding “price shocks” from unstable fuel markets.
Economic demands, environmental concerns, and affected Coastal First Nations support call for careful consideration of future action; reframing our perspectives to view economy, people, and environment as intertwined.
Investing in clean industries would not only provide long-lasting and stable financial support to Turtle Island, but also protect the very land we live on for many years to come.
