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Canada’s Carbon Reckoning: Will We Lead or Lag in the Green Economy?
This article was originally published in French in Le Devoir.
Canada’s carbon pricing system has long been hailed as a cornerstone of sustainability, but in reality, it has burdened businesses, raised costs for consumers, and diminished the country’s global competitiveness. While many continue to view carbon pricing as a necessary tool for reducing emissions, the evidence suggests it has failed to deliver on its promises. Instead of further leaning into this approach, Canada should explore more innovative, market-driven solutions that encourage sustainability without penalizing industries and stifling growth.
The recent call by Conservative Leader Pierre Poilievre and 14 oil and gas CEOs to repeal the federal carbon tax shines a light on the growing discontent with the policy. They argue that the carbon tax puts Canadian businesses at a disadvantage and reduces our competitiveness in the global market. While some may dismiss these concerns, the reality is that the carbon tax has done little to drive significant emissions reductions and has placed unnecessary financial strain on industries, especially in resource-rich provinces like Alberta and Saskatchewan. Instead of sticking to an outdated model, Canada must explore alternatives that foster innovation and long-term sustainability.
Rather than relying solely on carbon taxing, Canada should invest in policies that incentivize businesses to adopt cleaner technologies and practices. Tax credits for green technology, funding for carbon capture and renewable energy projects, and stronger support for innovation in clean tech can help Canada lead the global green transition. The C$16 billion Pathways Alliance carbon capture initiative, for example, could thrive under a policy framework that encourages investment in new technologies rather than penalizing emissions. Instead of punishing businesses, Canada should create an environment where sustainability and economic growth go hand-in-hand.
Canada’s commitment to sustainability also needs to extend to corporate accountability. Transparency in climate-related reporting is essential. The government’s upcoming mandatory climate disclosure rules for large companies are a step in the right direction, ensuring that investors and consumers have access to reliable data about corporate environmental impact. These regulations will help expose greenwashing practices, making it clear that businesses must do more than just make empty claims. For these policies to be effective, they must have real enforcement mechanisms and substantial penalties for those that mislead the public.
However, a major obstacle remains: the financial sector’s continued backing of high-emission industries. A recent investigation into “green loans” has shown how some of the world’s largest polluters exploit billions in sustainability-linked financing without making any significant emissions reductions. This is a direct threat to the integrity of Canada’s climate policies. To avoid undermining its own sustainability goals, the federal government must tighten regulations around green financing to ensure that only businesses with real, measurable progress toward emissions reductions benefit from these funds.
Canada’s future in the global green economy is at a crossroads. The decisions made today will determine whether we remain a leader in sustainability or become just another country lagging behind on the global stage. Repealing the carbon tax is not a call to abandon climate action—it's a call to rethink how we approach sustainability as a nation. Instead of relying on outdated, punitive mechanisms, Canada must invest in policies that incentivize innovation, foster corporate responsibility, and create an environment where green technologies can thrive.
The world is watching. Canada must lead—not lag—in the global green transition.
Dr. Sarah Farahdel is a public scholar who earned her PhD in the department of information systems engineering at Concordia University, specializing in sustainability frameworks. She has acquired nearly 10 years of industry experience across various sectors.
