Who’s really to blame for Canada’s wildfires? The $95 that isn’t $95.

The fire and the question

As Episode 2 was recorded, more than 180 fires were burning in Ontario, First Nations communities had been evacuated, and Toronto briefly recorded the worst air quality of any major city on Earth. Nationally it is not a record year — but the smoke crossed the border, and the blame followed.

In mid-July, Members of the US Congress sent a letter to Prime Minister Carney urging Canada to manage its forests — thin them, clear the fuel, burn it back. The Prime Minister's answer pointed the other way: climate change is "everyone's responsibility," including the United States'. One side blames the forest floor. The other blames the atmosphere. Almost nobody names the thing that dried the forest out — or asks whether the policy Canada is proudest of, its carbon price, is doing the work it claims.

Symptom and cause

The episode's first move is to separate symptom from cause. Canada is warming at roughly twice the global average — about three times in the North — which lengthens fire seasons and dries fuel loads. Peer-reviewed attribution work in Environmental Research Letters (Dahl et al., 2023) ties a substantial share of burned forest area in western North America to emissions traced back to the world's major fossil fuel producers. The forest floor matters; what dried it out matters more.

The scale is stark in Canada's own books. ECCC's land-based greenhouse gas indicator records natural disturbances — wildfire and large insect infestations — at roughly 1,100 megatonnes of CO₂-equivalent for 2023. Those tonnes do not count toward Canada's targets, but the atmosphere counts them all the same. Meanwhile the flagship 2 Billion Trees program, a $3.2-billion commitment, is being wound down; existing agreements will be honoured but no new applications are being accepted.

How a forest carbon credit works

Before the money trail, one piece of mechanics. A forest carbon credit pays the difference between a baseline — the carbon you claim would have been cut or lost — and the project — the carbon you actually kept standing. Defer a harvest, improve management, keep the forest on its feet: the difference becomes a credit someone can buy.

Fire complicates this everywhere: a credited forest that burns gives its carbon back. Registries hold insurance-style buffer pools for exactly that reason, and the western US fires have been drawing those pools down. But in Ontario, the province where this summer's fires are burning, the sharper problem is simpler:

The $95 patchwork

Ask what Canada's carbon price is and you will get a number: $95 a tonne. The episode's central argument is that this is not a price — it is a promise, and a negotiable one. Canada prices carbon as a federation: every province may build its own system, and the federal benchmark acts as the minimum-stringency backstop underneath them. Here is what the promise looks like province by province:

• Ontario (EPS) — the charge for excess emissions in 2026 is $95, straight from Ontario's own cost table. But the system is output-based: a large emitter pays the full rate only on tonnes above its performance line. Pay $95 on the ~10% above the line, spread it across all 100 tonnes, and the average cost lands near $9.50 a tonne. The margin still bites at full price — but offsets are not eligible, so forests are outside the room entirely.
• Alberta (TIER) — credits traded around C$24.50 in August 2025 (S&P Global Commodity Insights), a fraction of the $95 fund price the province froze in May 2025. Performance credits and offsets together add up to roughly three years of banked demand — a glut that keeps the working price low.
• Quebec (WCI cap-and-trade) — the May 2026 joint auction with California settled at US$28.81, roughly C$39.63 — just under forty dollars, set by auction, not by the federal schedule.
• British Columbia (OBPS) — the charge sits at the benchmark, but compliance units can cover only a capped share of obligations (30% for 2026), so the effective bite differs again.

Four provinces, four machines, one finding: almost nowhere does a tonne actually clear at the bar. And the bar itself moved. The benchmark was built to climb $15 a year to $170 by 2030 — until the March 2026 federal–provincial MoU capped the path at $115, reaching $140 only by 2040. Ottawa had committed to an interim review of the benchmark by 2026; its note this May says the updated benchmark, due later this year, will carry the new, lower path.

The fire test

Is the diluted price enough? The episode runs two tests. First, industrial carbon capture — the counter-argument every defender raises, because CCS and carbon removal take time. Fair. But CCS projects pencil against the carbon price they expect to face, and a path capped at $115 funds less than a path climbing to $170. The gap between what heavy-industry capture costs and what the price pays is the first shortfall.

What Australia proves

This is not a hypothetical design. Australia has run savanna fire management inside its carbon market for over a decade: 86 registered projects shifting fire regimes toward early-season, lower-intensity burns across roughly 35 million hectares. Savanna projects account for close to 1 in 10 of all ACCUs issued for 2024, about 70% are Indigenous-operated, and the credit stream sends $50M+ per year to Indigenous organisations — while long-running programs like WALFA show measurable declines in late-season fires.

One honest caveat, straight from the episode: savanna credits monetise avoided methane in grass fires. Different forest, different chemistry — the method does not copy-paste onto the boreal. The lesson does: a purpose-built method, Indigenous fire stewardship, and a price that actually pays for fire work.

The verdict — three frameworks, three gaps

Canada is not missing the pieces. It has a published forest-carbon protocol — but scoped to private land, without fire-risk crediting, and with no door into Ontario. It has Indigenous fire stewardship — Guardians programs, cultural burning — funded by grants, not by credit revenue. And it has a carbon price — real, but fragmented, glutted and diluted. Three frameworks, three gaps, and no connection between the money and the fire line.

The episode's closing read: the fires are a climate story and a fossil-fuel story before they are a forestry story — but the tool Canada built to price that pollution is not yet built to protect the thing burning. Watch the full episode above for the complete argument.

Sources

• Ontario EPS — Excess Emissions Units cost table, ontario.ca (2026 charge: $95/t; EEU/EPU-only compliance).
• Federal benchmark & March 2026 federal–provincial MoU, canada.ca / ECCC ($170-by-2030 path capped at $115; $140 by 2040).
• ECCC note, May 15, 2026 — updated federal benchmark to publish the revised path.
• S&P Global Commodity Insights — Alberta TIER market pricing (~C$24.50/t, Aug 2025).
• Government of Alberta — TIER fund price frozen at $95, May 12, 2025.
• WCI joint auction results, May 2026 — settlement US$28.81 (≈C$39.63).
• Government of British Columbia — OBPS compliance-unit rules (30% cap, 2026).
• Canada's Changing Climate Report, ECCC — warming at ~2× the global average.
• ECCC land-based GHG emissions & removals indicator — 2023 natural disturbances ~1,100 Mt CO₂e.
• Natural Resources Canada — 2 Billion Trees program wind-down.
• Dahl et al., Environmental Research Letters (2023) — attribution of burned forest area.
• Clean Energy Regulator (Australia) — savanna fire management project register and ACCU issuance.
• Letter from Members of the US Congress to PM Carney, July 15, 2026; Federal Register — Paris Agreement withdrawal EO.