Up in the air.
That’s the UCP government’s official position on industrial emissions as former prime minister Justin Trudeau’s signature climate initiative dissipates into vapour.
That’s because the Alberta government is quietly reviewing its industrial carbon tax even as federal politicians are vowing to scrap all or just portions of the Liberals’ failed ‘carbon pricing’ policy.
Prime Minister Mark Carney has already signed off on the consumer carbon tax, effectively killing it effective April 1. Instead of increasing it to $95 per tonne of CO2, it will now be nullified, a move that is expected to save motorists upwards of 15 cents per litre starting next week.
What’s less clear is what happens to the industrial carbon tax. Alberta was the first jurisdiction in North America to tax big emitters, starting in 2007 and morphed it into the Technology Innovation and Emissions Reduction program to fund research and development of new emissions technology under former premier Jason Kenney.
Now the future of the multi-billion fund is literally, up in the air as the UCP government considers next steps and what to do with the $900 million or so it was expected to generate in the 2025 fiscal year.
Alberta Environment Minister Rebecca Schulz’s office confirmed the review, stating that informal discussions with stakeholders have begun.
“A review of the TIER regulation is underway. We have started informal discussions with various stakeholders. This includes discussions around a wide range of options and ideas,” said Ryan Fournier, a spokesperson for Schulz.
The TIER regulation, Alberta’s current industrial carbon pricing system, was introduced in 2020 by former Premier Jason Kenney as a response to federal carbon pricing requirements.
However, Alberta has had some form of industrial carbon pricing since 2007, when the Specified Gas Emitters Regulation (SGER) first set a price on emissions from large industrial polluters. The revenue from these programs has been reinvested in emissions reduction technologies, including renewable energy and carbon capture initiatives.
“TIER has been a successful component of the province’s emissions reduction efforts,”Environmental Defence
Ironically, the potential for TIER’s elimination has raised concerns from environmental groups and some industry stakeholders.
In an emailed statement to The Western Standard, Environmental Defence’s Alberta ‘Energy Transition’ manager, Stephen Legault, called scrapping the program “an economic mistake,” arguing that it would weaken Alberta’s ability to attract investment in clean energy and emissions reduction technologies.
“TIER has been a successful component of the province’s emissions reduction efforts,” Legault said. “Instead of gutting climate policy, Alberta should be assessing where future markets for clean, renewable energy will be and strengthening our commitment to carbon reduction.”
A report from the Canadian Climate Institute found that industrial carbon pricing is one of the most effective policies for cutting emissions. By 2030, such pricing systems — including Alberta’s TIER — are projected to account for between 23% and 39% of Canada’s total emissions reductions.
The review also comes amid shifting federal politics, with Conservative leader Pierre Poilievre vowing to eliminate the national industrial carbon tax if elected. Premier Danielle Smith has expressed support for this move, while Saskatchewan Premier Scott Moe has already pledged to eliminate his own province’s industrial carbon tax.
Despite the uncertainty surrounding TIER’s future, the Alberta government has maintained its commitment to achieving net-zero emissions before 2050.
However, how the province plans to reach that goal without an industrial carbon pricing system remains unclear, even though commitments to achieving a so-called ‘net-zero’ energy economy by 2050 remain unchanged — so far.
“Alberta’s emissions are declining while our economy continues to grow thanks to our common-sense approach,” Fournier said. “We will keep Albertans updated as this work unfolds.”