CALGARY, Canada: Canada's carbon pricing policy, long a central pillar of its climate strategy, is facing mounting pressure as political leaders and oil executives push for its repeal.

The calls come amid rising concerns about global competitiveness and political uncertainty ahead of an anticipated spring election.

Opposition leader Pierre Poilievre this week pledged to dismantle the federal system if elected, promising instead to expand tax credits for emissions reduction and allow provinces to decide their own carbon rules.

Poilievre said he would scrap the federal rules and replace them with expanded federal incentives, such as tax credits to encourage companies to cut pollution. Carbon pricing decisions would then be left to individual provinces.

Introduced in 2019, the carbon pricing system requires high-emitting industrial sites to either pay a fee or purchase carbon credits for emissions above a certain threshold. The policy was designed to grow stricter over time, increasing the cost of carbon emissions to drive cleaner practices.

In an open letter, 14 CEOs from Canada's oil and gas sector called for repeal of the law, arguing that it hurts competitiveness and should be replaced with provincial regulation. Among the signatories were the CEOs of Canadian Natural Resources, Suncor Energy, Imperial Oil, Cenovus Energy, and MEG Energy.

This week, the Pathways Alliance—a consortium of six major oil sands producers—echoed those concerns, stating that the current carbon policy is "uncompetitive" and that Canada needs "federal policies that will grow Canada's oil sands."

Pathways has proposed a C$16 billion carbon capture and storage (CCS) project that could significantly reduce emissions in the oil sands. However, its future is uncertain without a clear policy direction.

"Until there is clarity on the future of policy... we are unlikely to see that (Pathways) investment materialized," said Michael Bernstein, CEO of Clean Prosperity.

Prime Minister Mark Carney has defended the carbon pricing system, warning that scrapping it could harm trade relations with countries like Britain, which plans to impose a carbon levy on imports.

"If you look at that combined with the views of the administration in the U.S., on tariffs and so forth, those discussions on Pathways have slowed somewhat," said Canadian Natural CEO Scott Stauth.

Analysts warn that without a carbon pricing mechanism, the only way to support projects like Pathways would be through direct taxpayer subsidies.