Alberta's coffers suffer a $170-million hit with every $1 drop in the average price of oil over the course of a year
CALGARY—Adding to an already hefty deficit is one of the unattractive choices Alberta has as it contends with the worst oilpatch slowdown in decades, Premier Rachel Notley said Friday.
Notley said she’s not pleased that Alberta is on track to run a deficit of $10 billion or more in the upcoming fiscal year.
A more precise figure is expected when Finance Minister Joe Ceci outlines the province’s 2016-17 budget in April.
“Quite honestly, it’s been a series of making a selection from a menu of bad options because we’re in that situation right now,” Notley told a news conference.
“But the … way we make those choices will continue to be driven by the values that we talked to Albertans about in the last election, which is supporting communities, supporting resilience and giving Albertans the tools to come through this and working together with partners _ not by taking a situation and making it worse.”
The U.S. benchmark price of oil is hovering just above US$33 a barrel _ a staggering drop from its mid-2014 high of US$108 a barrel.
Alberta’s coffers suffer a $170-million hit with every $1 drop in the average price of oil over the course of a year.
Energy industry players say conditions are the worst they’ve seen since the painful trough in the 1980s. The Canadian Association of Oilwell Drilling Contractors estimates 100,000 industry jobs have been lost so far in the downturn.
Notley said there is some room to reduce spending, but she’s not willing to cut so deeply that it damages Albertans’ well-being or the province’s long-term economic health.
“I think that we are in a position to have the backs of Albertans for a period of time and, yes, that means growing the deficit,” she said.
“There is not a single economist in the world that will say that firing teachers and nurses is the way to bring back the price of oil or the way to grow the economy.
“That’s simply not the way it works and that is not the way we are going to go forward.”