The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.
Ottawa and the provinces will lose a combined $14-billion in government revenue this year as a result of falling oil prices, according to new analysis that comes as the federal Conservatives shift their economic message ahead of Parliament’s return next week.
The federal government alone is set to lose $4.3-billion this year, the Conference Board of Canada said in a report Tuesday. The board is among the organizations that provide forecasts to the finance department and its findings add to the growing private sector opinion that Ottawa’s return to budget surplus is in jeopardy.
The International Monetary Fund lowered its forecast for global economic growth, helping trigger a 4.7 per cent drop Tuesday in the price of North American crude, which closed at $46.49 (U.S.) a barrel Tuesday. The IMF also cut its forecast for Canada. The Bank of Canada is expected to comment in detail Wednesday on the impact of low oil prices in its quarterly Monetary Policy Report. Analysts suggest the Canadian dollar could sink below 82 cents U.S. depending on what the bank has to say.
The rapidly changing economic picture is also leading to some mixed messages from the Conservative government.
A senior government source, speaking on condition of anonymity, moved Tuesday to play down statements made by Employment Minister Jason Kenney over the weekend. Mr. Kenney had said in media interviews that the government would consider further spending “restraint” in response to lower revenues. He also said the government would not spend what he called a “contingency fund,” in reference to the $3-billion downward adjustment Ottawa makes to its revenue forecasts as a form of fiscal prudence.
Since those comments were broadcast Sunday, no minister or government spokesperson has provided on-the-record comment to confirm or contradict Mr. Kenney’s remarks. However the source said no cuts are planned and indicated the contingency will be used if necessary. “The contingency is there for unforeseen events,” said the source.
The government announced last week that it would not be releasing a federal budget until “at least” April, a move opposition parties have described as a sign of panic from the Conservatives.
For the rest of this article, click here: http://www.theglobeandmail.com/report-on-business/oil-slide-to-shave-billions-off-federal-and-provincial-government-revenue/article22543445/