Falling oil prices will carve $11.2B from Alberta’s coffers over two years: Prentice
CALGARY — Alberta Premier Jim Prentice says the province’s revenue could fall short by $11.2 billion over the next two years because of declining oil prices.
“This is the most serious circumstance we have faced in a generation in this province,” Prentice told Global News Friday.
Prentice said the projected shortfall is $6.25 billion next year and $5 billion the following year as oil prices have fallen from more than $100 to $55 a barrel in just four months. As a result, all capital projects will have to be reviewed.
“We’re not talking about the cancellation of public projects; we’re talking about projects which are on the five-year capital plan and deferrals of the construction of projects.”
A special budget review committee will examine all government capital projects, the premier said. He also confirmed a $1.3-billion cancer treatment centre planned for Calgary has been deferred.
“The project is under review. I would anticipate that it is one of a significant number of capital projects where we’ll have to determine a deferral. All of the capital plan is under discussion to be frank, and we’ll be reviewing that next week,” Prentice said at a press conference in Calgary after his meeting with Gary Doer, Canada’s ambassador to the United States.“We’ve never gone about such a systemic review of Alberta’s finances as we’re currently doing.”
On Thursday, Global News learned construction for a new Calgary cancer centre, approved by former premier Alison Redford in 2013, will be delayed indefinitely.
The specialized treatment centre was meant to relieve pressure on existing cancer treatment facilities like the Tom Baker Cancer Centre and was to be built on the southwest edge of property near Foothills Medical Centre.
On Thursday afternoon, Health Minister Stephen Mandel confirmed the project’s postponement is directly related to declining energy royalty revenues.
“You know right now, it was becoming fairly expensive given our capital budget capacity,” said Mandel. “That doesn’t change the fact that we understand there’s problems with the delivery of cancer care in Calgary. It’s a big priority for the Prentice government and myself.”
Work on the $1.3 billion dollar facility was supposed to get underway in 2016 and be completed by 2020. The centre was billed by the provincial government as the biggest health facility construction project in North America. The Alberta Cancer Foundation had committed to raising $200 million dollars to help fund construction.
Mandel did not offer a new timeline for the project.
A spokesperson for Minister Mandel says no formal decision about delaying the project will be made until a review of the capital budget is complete.
The premier also said that he is pleased several Wildrose MLAs have joined his PC party during the oil price slump.
“Frankly, I’m heartened that like-minded conservatives would want to work together through that.”