Oil Revenue Drying Up Means Canada to Delay 2015-16 BudgetGreg Quinn and Rebecca Penty
Canadian Finance Minister Joe Oliver won’t present the 2015-16 federal budget before the fiscal year begins in April, saying the plunge in crude oil prices makes it tough to formulate reliable projections.
Oliver, speaking in Calgary, said the government plans a “balanced budget” in 2015-16. That’s a change from November, when he predicted a surplus for that period of C$1.6 billion ($1.3 billion). He maintained his forecast for a C$2.9 billion deficit in the current year.
“Given the current market instability, I will not bring forward our budget earlier than April,” Oliver said, according to the notes. “We need all the information we can obtain before finalizing our decisions.”
The plunge in the price of oil, Canada’s top export, “will adversely impact our federal government’s fiscal situation,” Oliver said, without giving an explicit estimate. “But the decline in oil prices will not prevent our government from achieving a budgetary balance in 2015,” he said.
The drop in oil prices means Alberta is “being sorely tested,” Oliver said, adding demand for oil will recover in the “intermediate and longer term.”
Oliver repeated his government’s pledge to transport the nation’s resources to new customers, citing the fact Canada’s biggest consumer of crude, the U.S., is in the midst of its own production bonanza.
“Without improved access to global markets, Canadian crude oil prices will continue to be both lower and more volatile than those prevailing globally, translating into heightened uncertainty and poorer economic growth,” he said.
Oliver reiterated during a press conference before the speech he doesn’t see a bubble forming in Canadian housing. He also downplayed the effects on the wider labor market of Target Corp.’s decision to pull the plug on its Canadian business, which employs 17,600 people.