Charting the Course

The report analyzes three carbon price scenarios for Canada's industrial sector: a flat price (CAD 130/t), a low price (rising to CAD 230/t), and a high price (rising to CAD 380/t by 2040). It finds that a high-price trajectory significantly reduces greenhouse gas emissions and stimulates clean investment with minimal impact on GDP growth. The authors recommend adopting a strong national price trajectory, differentiating performance standard tightening rates based on sectoral competitiveness risks—specifically tightening faster for oil and gas—and implementing complementary policies such as a green industrial strategy and the removal of fossil fuel subsidies.

• A high industrial carbon price trajectory reaching CAD 380/t CO2e by 2040 would significantly reduce annual greenhouse gas emissions compared to a flat price of CAD 130/t, with projected reductions of 73 Mt CO2e in 2035 and 108 Mt CO2e in 2040. These 2040 reductions are equivalent to eliminating nearly all road transportation emissions in Canada for one year and could avoid an estimated CAD 36.8 billion in global climate-related damages.
• The economic impact of a high-price scenario is minimal; while national GDP growth would be 0.05% lower on average from 2030 to 2040 compared to a flat-price scenario, resulting in a 0.49% GDP loss by 2040, annual GHG emissions would be 20% lower.
• Higher carbon prices stimulate economic investment in clean technologies. A high-price scenario is expected to increase total economic investment by approximately CAD 11 billion in 2035 (a 4.5% increase) and CAD 8 billion in 2040 (a 3% increase) relative to the flat-price scenario.
• Adjusting the tightening rates of performance standards to reflect real-world competitiveness risks—by tightening standards more quickly for less trade-exposed sectors like oil and gas production—improves economic outcomes. In a high-price scenario, this approach would result in CAD 2.6 billion more in GDP, over CAD 1 billion more in net exports, and nearly 12,000 more full-time equivalent jobs by 2040, with almost no impact on total annual emissions.
• Industrial carbon pricing alone cannot achieve Canada's net-zero 2050 goal because it primarily targets industrial sectors; nearly 90% of the reductions from a high price by 2040 occur in manufacturing and oil and gas. Complementary policies for non-industrial sectors (buildings, agriculture, and transportation) and a green industrial strategy to lower clean technology costs are essential.
• Weakening or repealing existing climate policies, such as clean fuel, methane, and clean electricity regulations, increases emissions without providing clear economic benefits. A policy rollback scenario results in annual emissions being 26 Mt CO2e higher in 2030, largely due to a 5-year delay in methane regulations for the oil and gas sector.

APA

Haig, S., & Cosbey, A. (2026). Charting the Course. International Institute for Sustainable Development. https://www.iisd.org/system/files/2026-06/canada-industrial-carbon-price-beyond-2030.pdf

Chicago

Haig, Steven, and Aaron Cosbey. Charting the Course. International Institute for Sustainable Development, 2026. https://www.iisd.org/system/files/2026-06/canada-industrial-carbon-price-beyond-2030.pdf.

Wikipedia

{{cite report |last1=Haig |first1=Steven |last2=Cosbey |first2=Aaron |title=Charting the Course |publisher=International Institute for Sustainable Development |date=June 2026 |url=https://www.iisd.org/system/files/2026-06/canada-industrial-carbon-price-beyond-2030.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{haig2026charting, author = {Haig, Steven and Cosbey, Aaron}, title = {{Charting the Course}}, institution = {International Institute for Sustainable Development}, year = {2026}, month = jun, url = {https://www.iisd.org/system/files/2026-06/canada-industrial-carbon-price-beyond-2030.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }