The State of Carbon Pricing in Canada

The Canadian Climate Institute's review of carbon pricing in Canada finds that while progress is being made, the current 'patchwork' of systems suffers from uneven price signals, inconsistent emissions coverage, and a lack of transparency. The report recommends establishing a common standard for emissions coverage, replacing point-of-sale rebates with direct revenue recycling, and aligning benchmarks for large emitter programs to reduce competitiveness risks and emissions leakage.

• Carbon pricing in Canada is characterized by an uneven price signal and inconsistent coverage of emissions sources. The estimated marginal cost incentive varies significantly, ranging from $16 to $41 across the country, and exemptions are applied unevenly based on the design choices of different jurisdictions.
• Large emitter programs currently grant significant quantities of free emissions and apply different cost treatments across sectors, which creates risks for both domestic and international competitiveness.
• There is a systemic lack of transparency regarding the design of carbon pricing systems, making it difficult to determine the true marginal cost incentive or how revenues are recycled and spent.
• The treatment of Indigenous Peoples is non-uniform across jurisdictions, with some communities exempt from carbon costs while others pay the full price; the report calls for further engagement to address the needs of non-status and self-governing First Nations, Inuit, and Métis communities.
• To improve effectiveness, the report recommends developing a common standard for emissions coverage to remove exemptions, replacing point-of-sale rebates with direct rebates or tax reductions, and enabling credit and emissions trading across jurisdictions.

APA

Canadian Climate Institute (2021). The State of Carbon Pricing in Canada. https://climateinstitute.ca/reports/the-state-of-carbon-pricing-in-canada-2024/state-of-carbon-pricing-in-canada-2021/

Chicago

Canadian Climate Institute. The State of Carbon Pricing in Canada. 2021. https://climateinstitute.ca/reports/the-state-of-carbon-pricing-in-canada-2024/state-of-carbon-pricing-in-canada-2021/.

Wikipedia

{{cite report |author=Canadian Climate Institute |title=The State of Carbon Pricing in Canada |date=14 June 2021 |url=https://climateinstitute.ca/reports/the-state-of-carbon-pricing-in-canada-2024/state-of-carbon-pricing-in-canada-2021/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{canadianclimateinstitute2021state, author = {{Canadian Climate Institute}}, title = {{The State of Carbon Pricing in Canada}}, institution = {Canadian Climate Institute}, year = {2021}, month = jun, url = {https://climateinstitute.ca/reports/the-state-of-carbon-pricing-in-canada-2024/state-of-carbon-pricing-in-canada-2021/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }