Thank you for your question.
The issue of carbon border adjustments is especially timely when you consider decarbonization in the context of international trade. We know that the European Union will be bringing in adjustments in the next few months, although they could be delayed. That means Canadian companies exporting aluminum, steel, fertilizer, cement and other such products to Europe will have to start paying a surtax when those products enter European territory.
We have to think carefully about our carbon pricing. We are caught between Europe, which has put a very high price on carbon, and our other big trading partner, the U.S., which hasn't really put a federal price on carbon and isn't considering a carbon border adjustment mechanism.
Canada will have to consider all of those things carefully. Consultations on the issue were conducted about a year ago. We also need to keep a very close eye on what happens at the WTO. The next trade war will probably focus on carbon border adjustments.