EDMONTON — Alberta Premier Jim Prentice addressed the Edmonton Chamber of Commerce Tuesday afternoon at the sold-out State of the Province luncheon. It was his first time delivering the speech to the city’s movers and shakers, gathered at the Westin Hotel.
Prentice delivered a fiscal update and discussed upcoming provincial initiatives. He also addressed the plummeting price of oil, which on Tuesday hovered around $63 a barrel, down from a mid-summer high above $100.
A report released Monday suggested crude prices could fall to as low at $43 US a barrel. The report helped send oil prices to levels not seen since mid-2009 when the Canadian and global economy were mired in recession. International oil prices have now fallen more than 35 per cent since the summer.
Prentice says his government will be dealing with a $6-billion to $7-billion hole in Alberta’s $40-billion provincial budget if low oil prices persist. He says that means all Albertans will feel the consequences.
But he says fixing the problem is not as simple as making deep across-the-board cuts in government spending. The premier says the government will limit spending to below the rate of growth, plus inflation, and focus on core services. It will also rely on much more conservative estimates for oil prices when putting together future budgets.
Prentice says he will not turn to a provincial sales tax to raise revenue and the government will continue to borrow money for capital projects.
Oil was trading at below US$65 on Tuesday, down from US$95 forecast in the provincial budget.
READ MORE: Stocks, consumer confidence, housing gripped by crashing oil prices
With files from The Canadian Press
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