Report warns Ottawa's carbon tax hike could cost Alberta 10,000 jobs, slash wages

CALGARY — A new report from the Fraser Institute warns that raising Alberta’s industrial carbon tax to the federal government’s $170-per-tonne target by 2030 could have a significant impact on jobs, wages, and economic growth in the province.The study, titled Estimated Impacts of a $170 Industrial Carbon Price in Alberta and Canada, shows Alberta could see 10,000 fewer jobs created, with Albertan workers earning $1,730 less per year.Nationally, workers could lose an average of $1,160 per year, alongside broader job losses across the country, which could exceed 50,000.“The federal and Alberta governments are currently negotiating the future of industrial carbon pricing in the province, but neither government has told the public what the costs will be if the carbon tax increases,” study co-author Ross McKitrick said..The report also raises concerns about Canada’s economic competitiveness, projecting declines in both exports and investment as carbon taxes rise.Alberta’s exports are expected to fall by about 1.1%, while capital returns could drop by more than 10%, potentially leading to more canceled projects and slower long-term growth.At the same time, the study suggests Alberta’s government could see a net revenue loss of roughly $1.2 billion due to reduced economic activity, even as federal revenues increase overall.McKitrick, a senior fellow at the Fraser Institute, stated that “governments have promoted climate policy with the promise that decarbonization is easy and the energy transition is not only costless but a great driver of growth, profits, and prosperity. This is untrue.”“The costs are real — even if the government tries to hide them by not conducting the analysis,” he said.“We’ve crunched the numbers and believe the public deserves to know what’s being asked of them.”In March 2025, Prime Minister Mark Carney eliminated the consumer carbon tax on fuels such as gasoline and diesel, while maintaining the levy on large industrial emitters at $95 per tonne, set to rise to $110..Later that year, Carney and Alberta Premier Danielle Smith signed a memorandum of understanding (MOU) on energy, with one of the stipulations being that Alberta agreed to increase its carbon tax to at least $130 per tonne.The Fraser Institute study assumes that price will ultimately reach the federal benchmark of $170 by 2030.Under that scenario, the study estimates Alberta’s real GDP could fall by about 2.0% compared to a case where carbon taxes remain frozen, while Canada’s overall economy would shrink by roughly 1.3%.While greenhouse gas emissions would fall by an estimated 12.8% in Alberta and 14.3% nationally, the Fraser Institute argues those reductions come with a heavy economic cost — more than $300 per tonne of emissions reduced.It also notes that while wages and household incomes may see relatively modest short-term declines, capital income — such as returns on investment — would drop sharply, raising the risk of reduced investment and slower long-term growth.“Policymakers — and all Albertans — need to understand the significant costs that further carbon price increases would impose,” co-author Elmira Aliakbari, director of natural resource studies at the Fraser Institute, said.

Report warns Ottawa's carbon tax hike could cost Alberta 10,000 jobs, slash wages

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