Alberta's carbon tax and related subsidies for the energy industry strike an appropriate balance between reducing emissions and protecting the economy, a panel of chief executives told a business crowd in Calgary on Wednesday.
"We've got to be both cost and carbon competitive, and I absolutely think we can do that," said Brian Ferguson, CEO of oil and gas giant Cenovus.
Ferguson said his company's recent decision to invest billions of dollars more in Alberta's oilsands was based in large part on its confidence in the province's carbon-pricing policies.
"We have embedded the cost of carbon on the basis that we understand the legislation," he said.
Alberta's policy also includes "output-based allocations," which are essentially subsidies that will reward the province's most efficient energy producers.
Ferguson said that will help drive innovation and new technology.
"A healthy proportion of the proceeds from the carbon levy will be redirected into technologies," he said.
The panel discussion was organized by the Calgary Chamber and also included Scott Thon, CEO of Berkshire Hathaway Energy Canada, who said the carbon tax hasn't diminished his company's bullishness on Alberta.
"We're long-term investors," he said. "We believe in Alberta, and we're happy to invest in the province."
Thon said jurisdictions around the world are "grappling" with the transition away from fossil fuels and Alberta has managed to chart a path that walks a fine line.
He highlighted the province's approach to carbon pricing as it relates to electricity generation, in particular, an industry that will also see increased costs offset by output-based subsidies.
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"In Ontario … they've chosen to do more of it by loading it on to the electricity customer's bill — that's what I don't want to happen," Thon said.
"And I think in Alberta, we've struck a nice middle ground. We have a fund that's going to help really shield those customers through that transition."
Chris Ragan, chair of Canada's Ecofiscal Commission — an independent, non-partisan research group devoted to pollution pricing in general — said Alberta's carbon pricing system is, overall, a "pretty well-designed policy."
"The carbon price hasn't, by any means, made the sky fall," he said.
Ferguson said the province "struck an appropriate balance" with its climate change policy as a whole, which he believes is connected to the recent federal approval of the Trans Mountain and Line 3 pipeline expansions.
"It's my belief that the carbon policy here in Alberta was one of the key reasons that the federal government was able to get its mind around approving these new expansions," the Cenovus CEO said.
"And that will benefit, very significantly, not just the Alberta economy but the whole Canadian economy."
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