Canada set to raise carbon price considerably over next decade

Enlarge / An oil refinery in Alberta. (credit: Kurt Bauschardt)

In 2018, Canada passed a federal carbon pricing law in an effort to reduce greenhouse gas emissions. The Greenhouse Gas Pollution Pricing Act was designed to not interfere with any provinces that had independently put a price on carbon, so long as a province's system met the requirements of the federal law. In provinces that hadn't acted, the federal scheme would kick in instead.

That scheme involved a tax on fuels starting at CAN$20 per ton of CO₂, rising to CAN$50 by 2022.

On Friday, the government announced its plan for the program through 2030. Although the price was increasing by CAN$10 each year through 2022, it will now go up by CAN$15 each year afterward. That means it would reach CAN$170 per ton of CO₂ in 2030-notably higher than current prices around the world. For this reason, the announcement also notes that the government will explore the potential of border carbon adjustments"-a type of import tax meant to protect domestic industry from goods produced in countries without similar carbon taxes.

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