Oil Sands Alliance raises concerns over revised Canada–Alberta industrial carbon tax agreement

Oil Sands Alliance has said that a newly announced agreement between the Canadian federal government and the Government of Alberta on industrial carbon pricing provides greater policy clarity but continues to impose what it describes as uncompetitive costs on the country’s oil sands sector.

The statement follows the bilateral agreement on a revised industrial carbon tax framework linked to a November 2025 memorandum of understanding between the two governments. While acknowledging the increased policy certainty, the alliance said the updated structure still places additional financial pressure on Canadian oil sands producers compared with international competitors, arguing that no other major oil-producing nation applies a similar carbon cost regime.

The agreement also sets an ambition to reduce the carbon emissions intensity of Canadian heavy oil production to levels aligned with global best practice by 2050. Industry representatives noted that Canada’s oil sector already performs below the global average in emissions intensity, but warned that further policy measures must be carefully balanced with competitiveness considerations.

The Oil Sands Alliance reiterated its support for the proposed Pathways carbon capture and storage initiative, describing it as a key potential decarbonisation project for the sector, but emphasised that its viability depends on appropriate regulatory and fiscal conditions. The group cautioned that additional carbon taxation could add to the overall cost burden of deploying large-scale carbon capture infrastructure.

The statement also referenced broader discussions between federal and provincial governments on expanding energy export capacity, including potential pipeline development to Asian markets. The alliance said that while it supports efforts to strengthen Canada’s role as an energy supplier, long-term investment will depend on stable and competitive regulatory frameworks capable of attracting significant capital.

The organisation said it remains committed to engaging constructively with both levels of government as policy details are finalised, and called for continued collaboration aimed at ensuring the competitiveness of Canada’s oil sands industry while pursuing emissions reduction goals.

Overall, the alliance framed the agreement as a step towards greater policy clarity but urged further work to align climate policy with investment certainty and long-term industrial growth objectives.