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Carney’s Carbon Pricing Pivot
Canada’s new Liberal leader embraces industrial pricing and regulatory muscle over a politically untenable consumer carbon charge
With Mark Carney stepping in as the new leader of the federal Liberal Party, Canada’s carbon pricing system faces a critical juncture. Long a proponent of market-driven climate policy, Carney inherits a system designed to reduce emissions while maintaining economic competitiveness. The current framework consists of a consumer-facing fuel charge, an output-based pricing system for industry, and regulatory mechanisms like the Clean Fuel Regulations. Each component plays a role in achieving Canada’s climate targets, but with growing political opposition, particularly to the consumer carbon price, adjustments are inevitable.
Consumer Carbon Price
The consumer carbon price applies to gasoline, diesel, propane, and natural gas, levying a charge at the distributor level that is passed through to end users. At the current rate of $65 per tonne of CO₂, this translates to about 14 cents per liter of gasoline, 12 cents per liter of diesel, and approximately $1.30 per gigajoule of natural gas. These costs will rise in increments to reach $170 per tonne by 2030.
