EDMONTON – Alberta Premier Jim Prentice says the plummeting price of oil means the province is facing a $500-million deficit this year instead of a budget surplus.
In an interview with The Canadian Press, Prentice says that his advisers project oil prices will rebound slowly over time, but Alberta may not see a balanced budget until the 2017-18 fiscal year.
Oil prices, the lifeblood of Alberta’s economy, have been in free fall since last summer and tumbled to below US$50 a barrel this week.
Watch: The province’s deficit will be billions of dollars ‘more’ than first expected. Gary Bobrovitz reports.
As late as November, the government still hoped to run a $933-million surplus this year.
READ MORE: Alberta stays in black despite oil free fall
Prentice says the plan now is to budget for oil at $65 a barrel in the next fiscal year, but that would still mean almost $7 billion in lost revenue. He says his government will look at cutting expenditures, raising revenues and dipping into a $5-billion rainy day contingency fund.