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There’s been some good momentum toward elevating Canada’s status as a global oil and gas supplier, but the industrial carbon price is eroding its competitive edge, says the head of the Canadian Association of Petroleum Producers.
“We’re still talking about an industrial carbon tax when no other producing and exporting nation does that to their producers,” Lisa Baiton said in an interview as the 2026 BMO CAPP Energy Symposium kicked off in Toronto on Tuesday.
Baiton said the war embroiling much of the Middle East has “put an exclamation point” on an argument CAPP has been making since Russia’s invasion of Ukraine in 2022: Canada is blessed with one of the biggest oil and gas reserves on the planet and has not only the opportunity, but the responsibility, to develop them and bolster global energy security.
“And yet we seem to be sometimes focusing on the wrong things,” Baiton said. “Instead of seizing the moment and taking the mantle of that responsibility, we are focusing on things that add cost and make us less competitive.”
The conference is also being held amid a push in Canada to more quickly build oil and gas export infrastructure to serve markets beyond what has traditionally been this country’s biggest customer — the United States.
The Alberta government, aided by industry experts, is looking at filing an application for a new West Coast crude oil pipeline this summer to the federal major projects office, which aims to speed along infrastructure deemed in the national interest.
The Alberta and federal governments signed a sweeping memorandum of understanding late last year on a host of energy matters, including a path toward building a new B.C. pipeline in tandem with an industrial carbon price that would support the economics of the massive Pathways carbon capture proposal.
Agreements on the nitty gritty of the carbon price and Pathways pieces remain unresolved two weeks past the April 1 deadline set out in the energy accord.
Under the MOU, Alberta’s industrial carbon price is to eventually reach $130 per tonne from $95. Premier Danielle Smith said late last month that talks were still ongoing around how quickly that price is to rise.
Climate policy non-profit Clean Prosperity said in a recent analysis that oilsands producers should be able to easily recoup the added carbon costs because their product would be able to sell for far more if a new pipeline enabled more exports to Asia. Producers’ bottom lines have already been benefiting from the existing Trans Mountain expansion, which began shipping oilsands crude to the Vancouver area almost two years ago.
The group looked at the carbon intensity at four oilsands operations: Cenovus Energy’s Christina Lake operation, Suncor Energy’s Firebag site and the Cold Lake and Kearl projects run by Imperial Oil.
It found that under the carbon price increase set out in the MOU, costs at those facilities would increase to between 81 cents and $3.75 per barrel at the time a new pipeline is likely to come online, from between 53 cents to $2.46 per barrel under the current price.
That increase is far outweighed by a more than $10 per barrel profitability boost as the differential between West Texas Intermediate and Western Canadian Select crude narrows, the group said.
In the shorter term, the Middle East war has caused global crude prices to surge, creating a windfall for the industry. A barrel of West Texas Intermediate was trading around US$92 around midday Tuesday, a drop of almost seven per cent from Monday, but still 37 per cent higher than it was before the war began in late February.
Mike Verney, executive vice-president at reserve evaluation firm McDaniel & Associates, said Canada is looking like an attractive global supplier these days. The firm recently conducted a study for the Alberta government showing the province sits on 177 billion barrels of proven oil reserves, the fourth biggest in the world.
Verney, who is to deliver a keynote address at the conference, said “energy security trumping energy affordability or sustainability” is expected to be a key theme.
With U.S. tight oil production, once thought to be virtually “infinite,” maturing faster than many had assumed, Verney said Canada sits in an enviable spot.
“We’ve got a largely undeveloped resource that’s highly commercial at prices north of US$70 WTI,” he said.
“We think interest is going to continue to rise here.”
This report by The Canadian Press was first published April 14, 2026.
Lauren Krugel, The Canadian Press
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