CALGARY, AB, June 25, 2026 /CNW/ - The $140 per tonne industrial carbon tax and carbon capture regulations agreed to by Ottawa and Alberta will increase the costs of producing energy in Alberta, and as a result will make the province less competitive than energy-producing U.S. states for investment, finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

"By increasing the marginal costs to produce energy in Alberta, federal and provincial policymakers are in effect encouraging investors to look at other energy-producing jurisdictions where costs are lower and returns on investment are higher," said Jack M. Mintz, the president's fellow of the school of public policy at the University of Calgary, and author of Impact of Carbon Policies on Competitiveness in Oil, Natural Gas and Electric Power: An Alberta-US Comparison.

The study finds that in addition to corporate, royalty and fuel taxes, Alberta's industrial carbon tax on large emitters (under the Technological Innovation and Emissions Reduction Regulation), as well as the costs to industry to comply with mandatory carbon capture, utilization and sequestration requirements will significantly increase the cost to produce energy in Alberta.

Critically, these costs do not apply to energy in US energy-producing states, such as Texas and New Mexico, putting Alberta at an uncompetitive disadvantage.

Specifically, by 2040, under Alberta's corporate level taxes, carbon capture requirements, and the industrial carbon tax of $140 per tonne agreed to by the federal and Alberta governments in the recent Memorandum of Understanding:

Conventional oil: The cost to produce a barrel of conventional oil increases from US$43 to $54, a 25.6 per cent increase.

Oil sands: The cost to produce a barrel of oil sands oil increases from US$51 to $61; a 19.6 per cent increase.

Natural gas: The cost to produce a gigajoule (GJ) of natural gas increases from CDN$1.56 to $2.17; a 39.1 per cent increase.

Electric power: The cost to produce a megawatt hour (MWh) of electricity increases from CDN$39 to $53; a 35.9 per cent increase.

"Critically, by increasing the cost to generate electricity, policymakers will be raising costs on producers across the province, meaning their goods and services will be more expensive," Mintz said.

"As energy becomes more expensive to produce as a result of the increased taxes and regulations, investors will inevitably look to other energy-producing jurisdictions where costs are lower."

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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, Montreal and Halifax and ties to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org

SOURCE The Fraser Institute