Leaders in Canada’s oil and gas industry are concerned about the impact of the proposed industrial carbon levy on the country’s competitiveness in the global energy market. Lisa Baiton, the head of the Canadian Association of Petroleum Producers, emphasized that imposing an industrial carbon tax puts Canada at a disadvantage compared to other oil-producing nations. Baiton highlighted the importance of developing Canada’s vast oil and gas reserves to enhance global energy security in light of ongoing geopolitical conflicts.
The ongoing 2026 BMO CAPP Energy Symposium in Toronto has drawn attention to the need for Canada to expedite the construction of oil and gas export infrastructure to diversify its markets beyond the traditional reliance on the United States. The Alberta government is planning to submit an application for a new West Coast crude oil pipeline to accelerate projects deemed crucial for the country’s energy interests.
Discussions around the industrial carbon price and the Pathways carbon capture initiative, outlined in a recent agreement between Alberta and the federal government, are still ongoing despite missing the April 1 deadline. The industrial carbon price in Alberta is expected to rise gradually to $130 per tonne, with negotiations ongoing to determine the pace of this increase.
While some analyses suggest that oilsands producers could offset the added carbon costs through increased exports to Asia via new pipelines, industry leaders like Cenovus Energy CEO Jon McKenzie caution that the carbon levy could hinder Canada’s competitiveness on the global stage. Executives like Chris Carlsen from Birchcliff Energy Ltd. also express concerns about the feasibility and costs of further reducing emissions through technologies like carbon capture and storage.
Despite Canada’s significant oil reserves and favorable production economics, challenges remain in terms of policy conditions and infrastructure development for expanding production and accessing global markets. Experts like Randy Ollenberger from BMO Capital Markets underscore the importance of streamlining project approval processes and addressing regulatory barriers to ensure Canada remains competitive in the evolving energy landscape.