Carney Kills Consumer Carbon Tax, But Alberta’s Fight is Far From Over

After years of frustration and fiery rhetoric, Alberta Premier Danielle Smith has finally seen Ottawa scrap the consumer carbon tax. But if anyone thought this was the end of Alberta’s battle over carbon pricing, they’d be dead wrong.

Just moments after Prime Minister Mark Carney eliminated the federal consumer carbon levy on Friday, Smith was already gearing up for the next fight—this time, over industrial carbon pricing.

“Every time I have heard the new prime minister speak, he has said that he doesn’t think (industrial) prices are high enough,” Smith told reporters in Calgary. “I don’t think it does Alberta any good if we end up seeing massive increases to industrial carbon taxes.”

Smith’s concern is valid. Carney has been clear about his intentions: while he’s scrapping the consumer tax to ease the financial burden on households, he’s doubling down on taxing industry—particularly oil and gas. That might sound like a fair trade-off in Ottawa, but in Alberta, where the energy sector is the backbone of the economy, it’s a looming threat.

For Smith, the move to hike industrial levies is just another example of federal overreach, punishing Alberta for its prosperity. She’s calling for an election, arguing Canadians need clarity on just how aggressive Carney plans to be. Given Alberta’s history with federal climate policies, it’s not hard to see why she’s worried.

Smith’s United Conservatives, along with her predecessor Jason Kenney, have long argued that Ottawa’s carbon tax policies have fueled inflation and made life harder for everyday Canadians. Alberta even went to the Supreme Court to fight the tax in 2019, only to lose in 2021. More recently, Smith’s government launched another legal challenge—this time over Ottawa’s decision to exempt home heating oil, largely used in Atlantic Canada, while forcing Albertans to keep paying full price.

And Alberta isn’t alone in its frustration. Saskatchewan Premier Scott Moe has been just as vocal, refusing to remit carbon levies on natural gas in defiance of Ottawa. Even Saskatchewan’s NDP Leader, Carla Beck, reacted to the tax’s removal with a simple, “Great. Finally.” That says a lot.

For Albertans, the immediate effect of Carney’s decision will be a welcome relief at the gas pump—17.6 cents less per litre, to be exact. Heating bills will also drop slightly. But the bigger question is what happens next.

Will industrial carbon pricing simply replace the consumer tax as the new battlefront? And will Alberta be forced to bear the brunt of Ottawa’s emissions crackdown while other provinces skate by with exemptions?

Smith certainly thinks so, and she’s already signaling she won’t back down without a fight. If Carney thought killing the consumer carbon tax would quiet Alberta’s resistance, he’s about to find out just how wrong he was.