To help make Canada into an energy superpower, the federal and provincial governments should reset their relationship on climate policy. A new vision paper from Clean Prosperity explains how. 

The paper recommends that the federal government cancel the oil and gas emissions cap and the Clean Electricity Regulations. Instead Ottawa should reach a deal with the provinces to strengthen their industrial carbon markets. 

For their parts, provinces must commit to carbon market reforms, and backstop them with carbon contracts for difference offered in partnership with the federal government. 

“Stronger carbon markets can help Canada build big projects and grow this country into a diversified low-carbon energy powerhouse,” said Clean Prosperity President and CEO Michael Bernstein, co-author of the new vision paper. 

“The federal and provincial governments should seize on their new spirit of co-operative nation building to make reforms to Canada’s carbon markets that will incentivize massive investment.” 

“Stronger carbon markets can help Canada build big projects and grow this country into a diversified low-carbon energy powerhouse. The federal and provincial governments should seize on their new spirit of co-operative nation building to make reforms to Canada’s carbon markets that will incentivize massive investment.” 

Michael Bernstein, Clean Prosperity President and CEO and co-author of the new vision paper

New vision paper shows how Canada’s carbon markets:

• Are already incentivizing Canadian companies to invest. In a new survey, companies across Canada report that carbon markets are having positive impacts on their efficiency, competitiveness, and environmental performance. 
• Could unlock at least $50 billion worth of mostly shovel-ready new investments in strategic sectors of the Canadian economy.  
• Deliver big benefits at low cost to Canadians. Industrial carbon pricing only adds $3 to the cost of a new pickup truck and $0.12 to the price of a refrigerator.

Stronger carbon markets can also help Canada compete with the United States for low-carbon investment. They can improve Canada’s trading relationships with partners like the EU and the UK that already have carbon markets.

To make progress, federal and provincial governments need a climate policy reset:

• The federal government should cancel the oil and gas emissions cap and the Clean Electricity Regulations. These policies are unnecessary with stronger carbon markets.
• The next federal review of provincial carbon markets should start as soon as possible. The review should focus on federal-provincial cooperation to make carbon markets ready to attract billions in capital.

To strengthen carbon markets and drive investment, the federal and provincial governments should:

• Adopt new responsive rules to support carbon credit prices over the long-term, and increase market transparency. Low credit prices and opaque markets are hindering investment.
• Jointly offer standardized carbon contracts for difference to all industrial emitters. Contracts should guarantee the future value of carbon credits so firms can have confidence in making big decarbonization investments.
• Link Canada’s carbon markets as part of the broader effort to remove interprovincial trade barriers.
• Define a path for the headline carbon price through at least 2040, at a level that is sufficient to incentivize large-scale decarbonization.
• Protect Canada’s industrial competitiveness against jurisdictions that don’t have strong climate policies.

Read the report

For more information: media@cleanprosperity.ca