· policy
Wikipedia (opens in new tab)

Danielle Smith on Carbon Tax

Adjusting industrial pricing (strong)

TL;DR

Danielle Smith's government is focused on adjusting Alberta's industrial carbon pricing to incentivize local investment over compliance payments.

Key Points

  • The provincial government is changing the industrial carbon tax program to allow companies to invest in their own emissions reduction projects instead of paying provincial fees.

  • As of October 2025, she stated she was open to adjusting aspects of the industrial carbon pricing program, including the existing $95 per tonne price freeze.

  • In 2021, Danielle Smith had previously stated that carbon pricing made sense and that she personally benefited from the carbon tax.

Summary

Danielle Smith's government is actively changing Alberta's industrial carbon pricing system, the Technology Innovation and Emissions Reduction (TIER) regulation, which has been in place since 2020. The core of the adjustment involves allowing industrial emitters to avoid paying provincial fees by reinvesting that money directly into their own on-site emissions reduction projects, a move framed as incentivizing local spending rather than regulation. Furthermore, the province announced changes that will permit smaller companies, those below the minimum emissions threshold, to opt out of the carbon pricing system for the 2025 period, aiming to save them money for operational improvements.

This approach stems from government consultations with oilsands and natural gas officials from the previous spring. The government has also previously frozen its industrial carbon price at $95 per tonne, putting it below the federal backstop rate, which is set to increase. While the province views these changes as a significant win for industry, allowing companies flexibility in compliance, critics warn that enabling companies to avoid compliance costs while also generating carbon credits could lead to the double-counting of reductions and dilute the market incentives for cleaner technology.

Key Quotes

"That's part of why we're having a conversation about how we adjust some of the programs"

Frequently Asked Questions

Danielle Smith's government is focused on altering the provincial industrial carbon pricing system, known as TIER, to favor direct investment in emissions reduction projects by large companies. She advocates for provincial control over carbon pricing, even while freezing the rate below the federal backstop price. This represents a shift from prior positions where she acknowledged the policy's merits.

Yes, evidence suggests a significant evolution in her public position regarding carbon pricing. In 2021, she acknowledged the sense of the policy and its personal benefit, but as Premier, she now actively seeks adjustments and opposes the federal system. Observers note this shift aligns with current political priorities for the province's industry.

The Premier recently announced that the industrial carbon tax program will be modified to allow companies to reinvest in on-site emissions reduction technologies rather than paying fees. She argues this change supports economic growth and will let smaller industries opt out of the system for 2025.