Canadian oil producers are lobbying to scrap or delay a proposed carbon tax tied to a new Pacific export pipeline, arguing the measure would erode competitiveness amid global supply disruptions.
The deal between Prime Minister Mark Carney and Alberta Premier Danielle Smith would allow the pipeline to carry more than 1 million barrels a day to the Pacific coast, while a minimum carbon price of C$130 ($96) per metric‑ton of CO₂ equivalent would be phased in. The governments are still negotiating the timing of the price hike, with some firms preferring a zero‑rate or a later start date.
Key figures include the C$130/metric‑ton carbon tax, the C$16.5 billion ($12.1 billion) Pathways carbon‑capture and storage network, and the pipeline’s capacity of over 1 million barrels a day. Cenovus Energy Inc. CEO Jon McKenzie said the industrial carbon tax makes the sector uncompetitive, while Tamarack Valley Energy Ltd. chief executive Brian Schmidt warned that other oil‑exporting countries lack similar requirements. Strathcona Resources Ltd. executive chairman Adam Waterous argued Canada should emulate U.S. subsidies for emissions cuts.
McKenzie noted, "Things like the industrial carbon tax are things that make us uncompetitive. And those are the things that need to be reformed or removed if we’re going to form capital in this industry and grow in a meaningful way." Schmidt added, "It’s hard to see how that would all work when you look at other areas of the world where you don’t have the sequestration project, you don’t have the carbon tax." Waterous said, "Whatever structure the provincial and federal government develops, it needs to be competitive with the United States."
Federal Energy Minister Tim Hodgson emphasized that Canada seeks a middle ground between U.S. and European policies to keep the sector competitive, while Alberta’s energy minister Brian Jean warned that a non‑competitive regime would stall pipeline investment. With the Middle East war underscoring the need for reliable supplies, Canadian producers see an opportunity to position themselves as a secure source for Asian refiners.
