Likely carbon deal would set price at $130-a-tonne by 2040

Added: 2026-05-15

[00:00:00]CTV News has learned the federal and Alberta governments are likely to announce a deal on carbon pricing this Friday. Sources tell CTV News a deal on carbon pricing is the final piece to get a pipeline to the West Coast. They say it would set the price at $130 a ton by 2040 as opposed to $170 a ton by 2030.

[00:00:23]In November, Prime Minister Mark Carney and Alberta Premier Danielle Smith inked an energy cooperation agreement which outlined the conditions needed for a new oil pipeline to the Pacific Coast.

[00:00:35]They're now 6 weeks past a self-imposed deadline of April 1st for those carbon targets. Sources say Carney is presenting the broad strokes of the agreement to his cabinet in a virtual meeting today. Joining us now, EY Canada tax partner Greg Boone. Greg, great to have you with us to unbundle all of this. What do you make of this new carbon pricing structure?

[00:00:56]Oh, well, thanks for having me. Yeah, no, I I think it's a it's a great thing for the industry and it's a great thing for Canada.

[00:01:03]Um you know, if you look at these projects and look at our our energy sector, you know, they're very very capital intensive and I think one of the most important things around uh moving forward with large capital projects is certainty. So, I would expect that the the energy industry is really looking for some certainty around this pricing.

[00:01:24]Are you hearing in your circles today as this new news is just breaking any sense of a timeline for how staggered this $130 by a ton carbon pricing will be getting to 2040?

[00:01:37]I have not, but I think if you sort of think about the pricing and the economics, you know, the one thing to to note here is that carbon pricing, you know, it is a cost. It's a it's a cost to the industry and I think you've got to strike a balance between our industry being competitive on a global nature Uh because as I mentioned, these these projects require funding, significant capital funding, and and that funding is is really coming from markets in and outside of Canada. So, uh I think anything that allows the industry to adapt uh at a pace that's sort of reflective of the economics is is certainly certainly helpful. Uh and I think probably represents a a compromise uh between achieving uh you know, a more a cleaner barrel of oil, uh but also providing economics needed for the stakeholders. You said this provides certainty, but is $130 a ton palatable to people in the oil and gas sector, oil sector certainly, uh given that it sits at $95 a ton currently?

[00:02:35]Well, uh the government and again, I'm I can speak to I guess some of the policies uh that the government has implemented. Certainly, uh there has been some support, financial support through uh tax incentives, carbon capture tax credit incentives. Uh those go a decent amount uh away to help with the uh upfront capital costs. Uh the one thing they don't do uh is really deal with sort of the OPEX. Uh there's no funding for that. So, so certainly, um I think the oil the oil industry, uh you know, one thing to note, I guess I would also say is that Alberta's had a carbon pricing regime for for many years, well before there was a federal one. So, so I think uh the the most important thing is is the economics and the certainty uh because we've lacked that over the last few years. And I guess the other thing I would say and and we are seeing the government move on this as well is is the ability to move forward um and reduce some of the regulations to allow these projects to move forward cuz they do take a significant amount of time, and with time comes the cost of money. So, uh I would assume you know, that the agreements being negotiated uh and you know, the industry is is coming along as well.

[00:03:46]That's a compromise. Lots to see on this, Greg Boone, EY Canada Tax Partner, joining us from Ottawa. Thank you for this.

[00:03:54]Thank you.