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The oil-price crash that is causing a major pullback in energy investment is also stirring plenty of worry in oil-revenue dependent Canadian governments. But while top oil-producing provinces such as Alberta are in full damage-control mode, the federal government is taking the oil shock in stride.
In a speech in Calgary Thursday, federal finance minister Joe Oliver was sympathetic to Alberta’s predicament, noting the price crash is the third-largest in four decades. As for the impact on Canada, he said Ottawa remains on track to balance its budget after years of deficit spending triggered by the global recession. He said there are no plans to increase taxes.
“Lower oil prices will adversely impact our federal government’s fiscal situation, but the decline in oil prices will not prevent our government from achieving the budgetary balance in 2015/16,” Mr. Oliver said in a speech to the Calgary Chamber of Commerce, after conducting consultations on the upcoming federal budget.
Because of the high level of instability in the economy, though, he said the budget would not be tabled at least until April.
Tough times in the energy sector are balanced by benefits for consumers at the gasoline pumps, as well as lower energy costs for manufacturers and transport companies that are also getting a boost from a decline in the value of the Canadian dollar, making them more competitive, he said. The result for the overall economy is broadly neutral over the mid-term, he said.
Mr. Oliver said the oilpatch doesn’t need to be overly pessimistic.
For the rest of this column, click here: http://business.financialpost.com/2015/01/15/no-help-from-ottawa-as-albertas-economy-devastated-by-oil-collapse/?__lsa=f0be-ea31