Watch: Finance Minister Joe Oliver talks to Tom Clark about consumer debt, plummeting oil prices and the Canadian economy
OTTAWA — While Canadians rejoice at the gas pumps, some governments might quietly be biting their nails.
Tumbling oil prices represent a threat to Canada, though there are positive outcomes as well, Finance Minister Joe Oliver said in an interview on The West Block with Tom Clark.
“[Low oil prices] will have a negative impact on revenues for oil companies,” he said. “It will impact on royalties to provincial governments, and it will impact on corporate taxes. So it definitely does have an impact on the fiscal framework.”
Oliver stressed, however, these effects were taken into account when he recently provided a fiscal outlook projecting a surplus.
As of mid-November, global oil prices had slipped 25 per cent from their 2014 peak — and that was before oil prices went into freefall last week, shedding 13 per cent between Monday and Friday.
The decision from the Organization of Petroleum Exporting Countries to maintain output at 30 million barrels per day — rather than cutting back on production and imposing a floor on prices — means crude likely won’t come out of this slide any time soon.
Despite the plummeting oil prices, the tax-cut package and significant infrastructure Prime Minister Stephen Harper has announced, “we’re still projecting a healthy surplus,” Oliver said.
Potentially positive effects oil prices can have on the Canadian economy, Oliver said, include more money in consumers’ pockets for spending and lower operating costs for manufacturers.
“It isn’t only a negative thing,” he said. “It has positive implications for the economy as well.”
With files from Jamie Sturgeon