Overview

As major economies move to protect their climate ambition and industrial competitiveness through Carbon Border Adjustment Mechanisms (CBAMs), Canada urgently needs to modernize its own approach to industrial carbon pricing.

With nearly one-third of global emissions now covered by some form of carbon price—and wide variation in how jurisdictions design and enforce these systems—the risk of trade exposure, carbon leakage, and declining investor confidence is growing.

A Canadian CBAM-equivalent could offer a strategic path to safeguard competitiveness and drive deep decarbonization. By identifying what works across international systems and where Canada is vulnerable, this project will inform a coherent, future-ready framework that levels the playing field for industry, accelerates emissions reductions, and positions Canadian exporters to succeed in an increasingly carbon-constrained global economy.