Leaders in Canada's oil and gas sector say the industrial carbon levy would erode the country's competitive edge at a time when the world is clamouring for a reliable energy supply.
"We're still talking about an industrial carbon tax when no other producing and exporting nation does that to their producers," Lisa Baiton, head of the ºÃÉ«tv Association of Petroleum Producers, said in an interview as the 2026 BMO CAPP Energy Symposium kicked off in Toronto on Tuesday.
Baiton said the war embroiling much of the Middle East has "put an exclamation point" on an argument CAPP has been making since Russia's invasion of Ukraine in 2022: Canada is blessed with one of the biggest oil and gas reserves on the planet and has not only the opportunity, but the responsibility, to develop them and bolster global energy security.
"And yet we seem to be sometimes focusing on the wrong things," Baiton said. "Instead of seizing the moment and taking the mantle of that responsibility, we are focusing on things that add cost and make us less competitive."
The conference is being held amid a push in Canada to more quickly build oil and gas export infrastructure to serve markets beyond what has traditionally been this country's biggest customer, the United States.
The Alberta government plans to file an application for a new West Coast crude oil pipeline this summer to the federal major projects office, which aims to speed along infrastructure deemed in the national interest.
The Alberta and federal governments signed a sweeping memorandum of understanding late last year on a host of energy matters, including a path toward building a new B.C. pipeline in tandem with an industrial carbon price that would support the economics of the massive Pathways carbon capture proposal.
Agreements on the nitty gritty of the carbon price and Pathways pieces remain unresolved two weeks past the April 1 deadline set out in the energy accord.
Under the MOU, Alberta's industrial carbon price is to eventually reach $130 per tonne from $95. Premier Danielle Smith said late last month that talks were still ongoing around how quickly that price will rise.
A recent analysis from climate policy non-profit Clean Prosperity suggested oilsands producers should be able to easily recoup the added carbon costs because their product would be able to sell for far more if a new pipeline enabled more exports to Asia. It found net profits at four oilsands facilities it studied would increase by more than $3 billion in the 15 years following the opening of a new pipeline.
A separate analysis from the ºÃÉ«tv Climate Institute pegged the per-barrel hit from the increased carbon price at an average of 50 cents — about the cost of a Timbit.
But Cenovus Energy Inc. CEO Jon McKenzie, who chairs CAPP's board of directors, said he sees it as a "fallacy" that a carbon levy would encourage industry to invest in decarbonization.
"What it means at the end of the day is more of the global supply will come from countries outside of Canada," he said.
"It represents nothing more than an incremental cost that makes us less competitive with the rest of the world."
Chris Carlsen, chief executive at mid-sized natural gas and oil producer Birchcliff Energy Ltd., said there's only so much the company can do to drive down its emissions. Its plants are relatively new and have the latest technology, he said.
"We've done a ton of the low-hanging fruit. The only real further option is carbon capture and storage, which is taking the exhaust stream and spending a significant amount of money to try and inject that back down to the ground. And we just don't see the feasibility at our size and scale to do that," he told The ºÃÉ«tv Press.
"It goes back to this competitiveness lens," he said. "(The higher carbon price) just stacks on top of everything else."
Mike Verney, executive vice-president at reserve evaluation firm McDaniel & Associates, said Canada is looking like an attractive global supplier these days, given the geopolitical turmoil and challenges producing elsewhere around the globe. McDaniel recently conducted a study for the Alberta government showing the province sits on 177 billion barrels of proven oil reserves, the fourth biggest in the world.
With U.S. tight oil production, once thought to be virtually "infinite," maturing faster than many had assumed, Verney said Canada sits in an enviable spot.
"We've got a largely undeveloped resource that's highly commercial at prices north of US$70 WTI," he said.
Randy Ollenberger, head of oil and gas research at BMO Capital Markets, said Canada's oil is the most competitive in the world based on the cost savings that have been achieved at existing operations.
But growing production is another matter, he said, expressing skepticism that the right policy conditions exist for a new pipeline to pan out.
"We're not competitive if it takes five to 10 years to approve a project, or you can't actually ship your oil because of a tanker ban, or you can't ship your oil because there's not a pipeline."
This report by ºÃÉ«tvwas first published April 14, 2026.
