Canadian Prime Minister Mark Carney will visit Calgary on Friday to announce details of a new deal with Alberta on industrial carbon pricing, a provincial government source and an industry source with knowledge of the plan told Reuters on Wednesday.
Canada and its main oil-producing province of Alberta are on the cusp of a deal to increase the effective credit cost in the province’s industrial carbon market to C$130 a metric ton by 2040, a third source familiar with the agreement said. The Globe and Mail was first to report on Wednesday the agreed-upon credit cost and target date.
Alberta froze its headline industrial carbon price in May 2025. Credits in its market currently trade between C$20 and C$40 a metric ton, which experts say is too low to give polluters an incentive to invest in emissions reduction technology.
The sources, who were not authorized to disclose the plans, told Reuters Carney will visit the oil-and-gas city for the first time since November, when he and Alberta Premier Danielle Smith agreed to work together to boost investment in energy production.
The sources said he will announce the new industrial carbon pricing plan, aimed at strengthening Alberta’s pollution pricing regime while also clearing the path for Alberta’s plan to propose a one-million-barrel-per-day crude oil pipeline to British Columbia’s northwest coast.
The third source said the agreement will include escalating carbon price floors to ensure Canada’s heavy emitters have continued incentives to reduce their emissions footprint each year. The deal will see Alberta’s headline price on carbon increase to $100 per metric ton next year compared to the existing $95 a ton, rise to $130 a ton in 2036 and then escalate by 1.5% per year starting in 2036, the source said.
A spokesperson for the prime minister’s office would not confirm the visit.
Environmentalists have been keen to see Alberta’s effective market price for carbon credits reach C$130 by 2030, not 2040. They have argued that a swifter time frame would encourage companies to make immediate efforts to reduce their emissions.
Alberta and the oil and gas industry have been lobbying for a later implementation date, arguing a carbon pricing regime that puts Canada’s industry at a competitive disadvantage would slow oil sands production growth at a time the country is keen to grow its energy exports and reduce its reliance on the U.S. market.
The federal government has said its approval of a new pipeline depends on Canadian oil companies making investments in emissions reduction through carbon capture technology.
Adam Waterous, executive chair of Canada’s fifth-largest oil company, Strathcona Resources, told Reuters on Wednesday companies will not make those investments until the government drops an existing ban on oil tankers off Canada’s northwest coast and addresses other barriers to pipeline construction.
(Reporting by Amanda Stephenson in Calgary; Editing by Aurora Ellis and David Gregorio)