The City of Medicine Hat is likely to be affected by some sort of carbon pricing system, regardless of who wins government in the 2025 federal election.--NEWS FILE PHOTO
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The future of the consumer carbon tax may be unclear after shifting policy statements from federal political party leaders this week, but a levy and credit system targeting CO2 could still affect the city-owned power business.
Industrial pricing, like that charged on carbon-intensive industries and power generation, could remain in some form, even under conservative governments in both Alberta and Ottawa.
The issue has been a major point of debate for Hatters since last month’s announcement that the city had secured rights to purchase the Saamis Solar Park project in Medicine Hat.
Part of the basic business case for buying and building the 1,600-acre proposal in phases is to collect carbon credits on green production as an offset to escalating charges on the city’s base-load gas-fired generation units.
That diversification, officials stated last week, would help keep the entire power complex viable – economically and operationally – for longer.
Ever since though, Hatters have asked about the future of carbon pricing in general.
This week, federal NDP Leader Jagmeet Singh announced his party’s plan to oppose the current consumer carbon pricing plan, a keystone of the minority Liberal government’s climate plan.
It’s also a clear target of the federal conservatives, who have called for the government to be brought down over the issue, and have vowed to “Axe the Tax.”
Local MP Glen Motz told the News that his Conservative Party would end the consumer carbon levy, charged on gasoline, diesel and natural gas for home heating, which he says is inflationary.
A “strong environmental and industrial policy” that could address industrial emissions “is in the works,” said the Member of Parliament for Medicine Hat-Cardston-Warner.
“We’re over a year from a scheduled election, and there is plenty of policy that we are developing as we speak – that includes our environment plan,” said Motz. “Alberta’s system is pretty robust as it is, and our leader has made it clear that a Pierre Poilievre Conservative government will respect provincial jurisdiction and choice as much as possible.
“At this stage we’re in the development stage.”
Alberta has had its own price on carbon dioxide since the late 2000s, and it now acts and an equivalent to the federal price under an agreement.
The City of Medicine Hat paid $8 million in provincial levies in 2023, leading it to explore cost-saving ideas, such as solar, carbon capture and efficiency measures, division head Rochelle Pancoast told a committee last week.
She said the city will advocate for Alberta’s timetable of 2050 for net-zero in electricity production – thereby extending the life of city’s existing gas-fuelled plants past the federal government’s goal of a net-zero grid in 2035.
“Political elections can change the direction, but there has been significant momentum globally for federal action across all nations, and this is how the (current) government have drafted (regulations),” said Pancoast.
“The outcome remains uncertain but the momentum appears to be moving to fewer carbon emissions, rather than more … we’re looking to manage risks (of regulatory increases) in our energy business.”
The province will review TIER regulations in 2026, but Premier Danielle Smith told reporters this spring that she sees the program’s worth in triggering companies to work toward reducing emissions and providing incentive for new investments.
“We’re going to continue with an industrial carbon-pricing strategy because it is working,” she told the Globe and Mail on May 30.
City officials say that every 25 megawatts of installed solar-generating capacity would produce enough power annually to earn credits in the TIER program valued at $1.5 million today, rising to $2.4 million in 2027 as the per tonne charge on carbon rises.
The city plans to build an initial 75-megawatt phase in 2027, according to applications now before provincial regulators, leading to $7.2 million in credit revenue beyond sale of electricity that is cheaper to produce on an operating basis.
The entire project has a capacity of 325 megawatts in peak conditions, and would put power into the city’s distribution system.
