Claudia Cattaneo (The Financial Post)
Alberta’s first fiscal update under the new NDP government paints a tragic picture of the once-booming oil province: a deficit of nearly $6-billion, and growing, despite higher income and corporate taxes; soaring unemployment; slumping manufacturing; and an expected 0.6% GDP contraction in 2015.
If that weren’t bad enough, the province is also reeling from a drought that is hurting its large agricultural sector as well as devastation from forest fires, which boosted the government’s disaster assistance expenses.
“There is no doubt that our big challenge is commodity prices that the government of Alberta does not control,” Alberta Finance Minister Joe Ceci told reporters after presenting the first-quarter forecast for 2015/2016 fiscal year revenue and expenses. “We all know that the price of oil has dropped dramatically in August. Nobody expected global oil prices to reach the levels they are at today.”
Indeed, Ceci suggested the deficit projection could swell to $6.5-billion by the time his government tables its first budget in October, and that the books won’t be balanced until 2018/2019.