Close X
Monday, November 11, 2024
ADVT 
National

Premier Jim Prentice says low oil prices punch $6B-$7B hole in Alberta budget

Darpan News Desk The Canadian Press, 10 Dec, 2014 10:27 AM

    EDMONTON — Premier Jim Prentice says if oil prices continue to remain low, they will blow a $6 billion to $7 billion hole in the $40-billion provincial budget and no Albertan will be spared the pain.

    "A return to extremely volatile energy prices has created conditions that we cannot ignore," Prentice said Tuesday in a speech to the Edmonton Chamber of Commerce.

    "Tough choices are going to have to be made and they will be made."

    Prentice was reacting to the price of oil that was around the US$100 barrel mark in the summer but has since fallen to the mid to low $60-range this week due to a supply glut caused by OPEC and increased production in the United States.

    The price trough forced the province last month to revise its revenue forecasts for the current fiscal year from a surplus of $1.1-billion to $933 million.

    The province forecast oil at US$95 a barrel in the spring budget but last month revised that to $75 a barrel.

    Prentice has promised to keep the operating side of the budget balanced, but when asked later by reporters if that balance is in jeopardy, he said, "It remains to be seen.

    "Clearly it makes it more challenging to balance the budget even in this fiscal year, let alone the fiscal year that we're facing," said Prentice.

    Prentice has been making similar speeches in recent weeks, warning of "prudence" and "consequences" with low oil prices, the key driver of Alberta's economy.

    He reiterated Tuesday his plan to look for in-house savings while keeping the rate of future spending increases below the benchmark level of inflation plus population growth.

    He added that "current forecasting would mean that this (belt-tightening) will actually need to be even tighter."

    Prentice said the cuts will not impact the core programs of education, health and care for seniors.

    The savings, he said, are there.

    "We are spending on a per capita basis in most areas more than anyone in Canada," he said.

    He wouldn't say what changes will be made on the revenue side, but said he won't punish future generations with exorbitant debt.

    The premier also said he wouldn't introduce a sales tax.

    Prentice didn't close the door to changes to personal and corporate income taxes, but said "Albertans cannot be asked to pay more without first seeing clear evidence that we're doing more and as much as we possibly can with the dollars that we currently have."

    NDP Leader Rachel Notley said Prentice is laying the groundwork for steep cuts to programs and benefits for everyday Albertans.

    Notley said Prentice needs to bring back a progressive income tax and do away with the current 10 per cent flat tax on income she says benefits only the wealthy.

    "I would have liked to have seen (Prentice) deliver his cautious, prudent message of impending austerity to any one of the number of very wealthy and privileged Albertans who have been benefiting from our flat tax and low (oil) royalty regime for so many years," said Notley.

    "We already have a province where inequality is growing.

    "And if they choose to deal with this financial crunch by once again pulling services from those Albertans who most rely on them, then that problem is just going to get larger and larger."

    Also Tuesday, the new boss of the Canadian Association of Petroleum Producers spoke to the Calgary Chamber of Commerce.

    He struck an optimistic tone about low oil prices, saying while there will likely be some short-term belt-tightening, "CAPP looks at the longer view."

    "We are an industry that has come from far lower prices in the past," Tim McMillan, a former Saskatchewan cabinet minister, told reporters after the speech.

    MORE National ARTICLES

    Court told accused mum in police interview about encounter with peace officer

    Court told accused mum in police interview about encounter with peace officer
    CALGARY — An Alberta man accused of killing a peace officer refused to talk about what happened when he was questioned by police.

    Court told accused mum in police interview about encounter with peace officer

    Ottawa introduces bill to modernize grain sector rules to help industry grow

    Ottawa introduces bill to modernize grain sector rules to help industry grow
    OTTAWA — The federal government is continuing its overhaul of rules governing the grain sector with legislation aimed at ensuring producers get paid for their crops and to allow for the testing of grain in Eastern Canada.

    Ottawa introduces bill to modernize grain sector rules to help industry grow

    Canadian teacher says Indonesian indictment is 'baseless' and should be dropped

    Canadian teacher says Indonesian indictment is 'baseless' and should be dropped
    JAKARTA, Indonesia — A Canadian teacher facing allegations he sexually abused a kindergarten student at an international school in Indonesia has filed a letter with the court calling on the case against him to be dismissed.

    Canadian teacher says Indonesian indictment is 'baseless' and should be dropped

    Canadian Video Testing iPhone's Bendability Makes YouTube's Year-end List

    Canadian Video Testing iPhone's Bendability Makes YouTube's Year-end List
    TORONTO — Lewis Hilsenteger typically hopes to get at least 200,000 to 300,000 views after posting videos to his YouTube channel Unbox Therapy. If the tech product he's profiling is really buzzy, he might strive for 500,000.

    Canadian Video Testing iPhone's Bendability Makes YouTube's Year-end List

    B.C. Premier Clark says Petronas LNG project still has hurdles to overcome

    B.C. Premier Clark says Petronas LNG project still has hurdles to overcome
    TORONTO — British Columbia's premier said Monday the province's multibillion-dollar agreement with Petronas to build a liquefied natural gas terminal is "done," while acknowledging the Malaysian energy giant still has hurdles to overcome before the project can go ahead.

    B.C. Premier Clark says Petronas LNG project still has hurdles to overcome

    Obama 'Colbert' show appearance won't have Canada's oilpatch laughing

    Obama 'Colbert' show appearance won't have Canada's oilpatch laughing
    WASHINGTON — In the Monday night episode of "The Colbert Report," the joke was on Canada's oil industry.

    Obama 'Colbert' show appearance won't have Canada's oilpatch laughing