Canada publishes new carbon price trajectory

On 19 May 2026, the Canadian federal government published its updated headline price trajectory for all industrial carbon pricing systems in Canada, effective 15 May 2026.

The revised price trajectory keeps the headline carbon price at CAD 95 in 2026 (unchanged from 2025), then increases it to CAD 100 in 2027. It rises to CAD 115 in 2030, and then by CAD 3 each year thereafter until it reaches CAD 130 in 2035. From 2036 onward, the price is indexed to inflation with a 1.5% annual escalator, reaching CAD 140 by 2040. The government has announced that this new trajectory is part of a broader updated federal benchmark that will be published later in 2026.

On 15 May 2026, the Canadian federal government and the government of the Canadian province of Alberta released the Implementation Agreement for a Memorandum of Understanding that both jurisdictions entered into on 27 November 2025. In the Implementation Agreement, both jurisdictions made a commitment to recognize the headline carbon price trajectory set by Alberta for its Technology Innovation and Emissions Reduction (TIER) system. This headline carbon price trajectory is the same as the one published by the Canadian federal government.

Under the 2021 update to the Pan-Canadian Approach to Pricing Carbon Pollution, the minimum national carbon price had been set at CAD 65 in 2023, increasing by CAD 15 each year to reach CAD 170 in 2030.