Oil-price squeeze may force Alberta to run in the red on operating budget

EDMONTON – Alberta Finance Minister Doug Horner says the province is getting squeezed by oil markets and may not be able to balance the operating portion of next year’s budget as promised.

Horner says he is “very concerned” about running an operating deficit and has asked departments to find further savings.

He says everything is on the table, including the premier’s promise to build 140 new family care clinics.

Horner recently announced the province will take on debt to pay for infrastructure projects, but had previously remained committed to running a balanced $40-billion operating budget.

He says the problem is Alberta’s major international oil customer, the United States, has increased its production forcing the province to sell its bitumen at a steep discount.

Horner says Alberta — and Canada — desperately needs new pipelines to the coast to reach exploding markets in China and South America.




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Oil-price squeeze may force Alberta to run in the red on operating budget

  1. I can think of something else Alberta might need.

    Diversification.

    • YES….absolutely!

  2. The Alberta PC’s won a provincial election about 9 months ago with promises of a balanced budget in 2013, 140 new Family Care Clinics and increases (small like 1 or 2%) to education spending.

    Just a month ago they decided to split the budget into ‘structural’ and ‘operating’ budgets insisting that since the operating budget would still be balanced all was well, forget about the deficit in the structural portion.

    Now…oops again…it looks like the operating budget won’t be balanced, promised education spending increases likely will not happen and the promised family care clinics are also on the line. What a load….

    The government has come to rely way too much on oil & gas royalties while letting spending soar out of control. Yes Alberta needs to diversify, we also need stable revenue for the government (a provincial sales tax and progressive provincial income tax as we are the only province without either) but in return the government has to control spending and increase efficient use of tax dollars.

    This province has an abundance of natural resources enough that Alberta (hell, Canada) should have a growing multi-billion $ resource fund, instead it’s all gone and the government is crying penury. It kinda makes me want to throw up a little bit.

  3. South America has lithium. Can the oil imports there make the lithium battery economy (maybe only enough for 100M cars) happen faster? There is a USA scientist who needs ten years to figure out a process engineering solution to coat lithium nanowires cheaply or something. Then scale-up of the battery market. Getting a new mine running takes a decade. So that is 20+ years if measured non-concurrently. The Forbes guy who doesn’t like AGW uncertainty won’t like the uncertain # of AGW Failed States either. He is smart enough to realize the latter flipside of ignorance, but has neocon emotions.

  4. Alberta has been discounting oil prices by 30% for the past 15 years. The Brent is a made for Alberta price agreement invented by Alberta Conservatives and the US oil industry.

    For one month, November out of 15 years the Brent has risen above market briefly. In the 15 years however Alberta has lost hundreds of billions of dollars; more than a trillion that should be in Alberta coffers.

    If either the WRP or the Cons (both owned and operated by oil) you will be looking at another trillion down the tubes.

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