Five years of development. Four hundred million dollars. A waste-to-energy facility in Edmonton that was shovel ready and waiting to break ground.

Varme Energy built their entire business case on one federal promise: that Canada's industrial carbon price would rise to $170 per tonne by 2030. The math worked at that price. The investment made sense.

Then on May 15th, Mark Carney and Danielle Smith announced a revised deal that lowered Alberta's industrial carbon price trajectory.

The math stopped working.

Jamie Stephen, managing director of Torchlight Energy, said it plainly. That change in schedule and the lower price makes pretty much every carbon capture and storage project in Canada not viable. His own company has a separate $2 billion carbon capture facility near Hinton, Alberta that is now also at risk.

That is not one project in trouble. That is an entire category of investment that just had the floor pulled out from under it.

The Fraser Institute noted this week that Carney is already walking back the promises made to Alberta in the May MOU. The ink was barely dry.

For years, conservatives argued that the carbon price killed investment in Canada. Now the government has lowered the carbon price trajectory to make a political deal with Alberta, and it is killing a different kind of investment. Clean energy developers who did exactly what the government asked, built projects around federal policy, are the ones holding the bill.

The companies that ignored climate policy were never going to build these projects anyway. The companies that believed the government did. And now they are the ones absorbing the cost of Ottawa changing its mind.

Inconsistent climate policy is not just an environmental problem. It is an investment credibility problem. When the rules change mid-game, the next developer thinks twice before committing five years and four hundred million dollars to a government promise.

That is the Canadian take.

Until next time,

Dean

P.S. If the government can change the carbon price rules after clean energy companies already committed, what other policy promises would you not build a business around? Hit reply and tell me.