Canada's industrial carbon pricing system should be protected
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On the campaign trail, Mark Carney, promised to bin the consumer carbon tax. Now Prime Minister of Canada, Carney has cut the tax rate to zero, a prelude to it being cancelled entirely once a change in legislation allows. In one stroke the move eliminated the key battleground issue upon which Conservative Leader Pierre Poilievre had been waging the election battle: ‘Axe the tax!’ (see A tactical retreat: Mark Carney axes Canada's consumer carbon tax).
In response, Poilievre has now announced that if re-elected, he would also scrap the federal carbon pricing system for industrial emitters. The federal Output-Based Pricing System (OBPS) applies to large industrial producers that emit more than 50,000 tonnes of CO2e per year. Provinces would be free to continue to price carbon emissions from industry should they wish, but there would be no more federal backstop as its known.
The incumbent Liberal Party is now the favourite to win the election according to
. The incumbent party’s chances have swung sharply over the past few months, from a low of only 5% at the start of 2025 to 52.6% currently. At the weekend Prime Minister Mark Carney dissolved Parliament and called an election for 28th April (see Three carbon markets facing electoral turbulence in 2025: Opposition parties paint carbon pricing as inflations 'pantomime villain').1Rather than focusing on a policy that will move the needle with the electorate, Poilievre’s attempt to kill off industrial carbon pricing smacks of desperation. Before we get into some of the implications should Poilievre get his way (short answer: none of it good), it’s worth recapping how Canada’s industrial carbon price system actually works.
