Ottawa, provinces form carbon market linking group

Federal, provincial and territorial governments have started work on how to link Canada’s separate carbon markets, Environment and Climate Change Canada said in a news release issued Oct. 23.

The working group, which has a representative from each province and territory plus the federal government, held its first meeting that week and discussed a draft workplan. First Ministers agreed in July 2026 to create the group to explore different models for linking carbon markets across the country.

It is expected to report back to First Ministers with detailed recommendations by July 2027. The department said the group will handle technical collaboration between governments.

“This working group is an opportunity to consider how we can work together to better streamline and integrate the many distinct carbon markets operating in different provinces and territories across our country,” Environment Minister Julie Dabrusin said in the release. She said the goal is to give industry and investors long-term certainty while keeping Canadian companies competitive.

A price on carbon pollution has applied across Canada since 2019 through a mix of federal, provincial and territorial systems, which gives each province flexibility to design its own. The result is a patchwork of industrial pricing systems that operate separately.

The department said the working group is separate from broader engagement on carbon pricing under the Greenhouse Gas Pollution Pricing Act and the review of the federal benchmark. It also noted that in September the federal government said it is exploring a policy framework for trading internationally transferred mitigation outcomes.

The release did not say which provinces attended or whether any has proposed a specific linking model. It also did not set out what linking would change for emitters or consumers.

Carbon pricing is also a trade issue. Canada News Media has reported on how the European Union’s carbon tariff exposes $2.8 billion of Canadian metals, and on the Canada and European Union joint statement released Monday.

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