Federal Natural Resources minister Jonathan Wilkinson told Reuters most of the discussions have focused on "carbon contracts for differences." These contracts set a price on tradable carbon credits, which heavy emitters can get if they reduce pollution. If the market price for the credit falls below the minimum in the contract, the government would make up the difference.
Guaranteeing the value of reducing emissions would be a "game-changer" for investors in capital-intensive projects, RBC Capital Markets said in a note.Canada's carbon price is set to rise to C$170 a tonne by 2030 from C$50 a tonne currently, and is key to Ottawa's commitment to cut emissions 40-45% below 2005 levels by 2030 and reach net-zero by 2050.
A contract with the government guaranteeing a minimum price would mitigate that risk, said Mark Cameron, an adviser to the Oil Sands Pathways Alliance to Net Zero, which represents Canada's biggest oil sands producers.