WATCH ABOVE: Economists say the province could lose over a billion dollars by the end of the year if the prices stay at their current levels. Premier Prentice discussed the problem with the Prime Minister over a private weekend meeting. Gary Bobrovitz has more.
CALGARY – Prime Minister Stephen Harper and Alberta’s new premier are both describing their first meeting since Jim Prentice was sworn in last month as productive.
A spokeswoman for Prentice, a former member of Harper’s cabinet, says Friday’s discussions were constructive, and included a range of issues.
Emily Woods says the two discussed Alberta’s economy, energy and the environment, the need to address the issue of skilled labour, and strengthening relationships with Aboriginal peoples.
Premier Jim Prentice says softer oil prices are one of the biggest concerns. He discussed the problem with the prime minister over a private weekend meeting.
Economists say the province could lose over $1 billion by the end of the year if the prices stay at their current levels. Presenting Prentice and his government with a big challenge.
According to a BMO economic report, it says falling world oil prices could reduce provincial royalties by up to $1.2 billion this year. The price hit a two-year low this week and that was a priority issue for discussions with Prime Minister Stephen Harper when the pair met in Calgary.
Prentice said it’s now critical for both levels of government to work together on the energy and environment files.
“These lower prices in the energy sector highlight the important of us accessing global markets.”
Harper tweeted the Friday meeting saying, “Productive first meeting with AB premier @jimprentice. Looking fwd to working with him to build a stronger Canada.”
On Twitter, Harper said the meeting with Prentice was productive and he was looking forward to working with him to “build a stronger Canada.”
Oil prices are trading under $85 a barrel down almost $30 and some analysts say that could mean the return of the bitumen bubble, which devastated the Alberta government budget a few years ago.
Duane Bratt a Mount Royal political analyst said when the price drops there will of course be less royalties.
“And that’s going to have a kick on the treasury and it think a bigger issue is why we remain despite this boom bust cycle so dependent on royalties.”
The Alberta budget forecast’s an average price of $95 a barrel for oil this year; it expects revenues of $9 billion with almost half from bitumen royalties. Now that that’s in question, the Wildrose calls it reckless budgeting that could lead to serious debt possibilities that may force the premier into a financial scramble to pay for his promises of new schools and other infrastructure projects.
The two leaders also discussed other issues in their meeting including skilled labour shortages and strengthening relationships with first nations.
Prentice has said time is becoming a critical factor in solving the temporary foreign worker shortage, which he has says has hit Alberta’s roaring economy hard.
READ MORE: Time becoming critical factor in Alberta’s worker shortage: Prentice
In June, Harper’s government brought in rules to limit the number of foreign workers that large and medium-sized companies can hire, to ensure Canadians are first in line for jobs.
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