The Smith and Carney governments have yet to finalize a deal on the industrial carbon tax, despite an April 1 deadline included in last year’s Alberta-Ottawa memorandum of understanding (MOU). Considering the stakes, it’s no wonder the deal remains hard to reconcile.

To recap, in May 2025 the Alberta government froze its industrial carbon tax at $95 per tonne of carbon emissions. But under the MOU — a framework to advance major energy and infrastructure projects and “unlock the growth potential of Western Canada’s oil and gas” — the province committed to raise the tax to at least $130 per tonne, a 37% increase. And the door remains open for further increases towards the federal target of $170 per tonne by 2030. Alberta’s industrial carbon tax system applies to large emitters (including oilsands operations and refineries) when emissions exceed a government-set limit. Firms can comply either by paying the tax or buying credits from other firms engaged in........

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