Alberta projects historic deficit of $ 24.2 billion amid COVID-19 pandemic and low oil prices

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“It would be irresponsible to consider increasing costs,” he said.

University of Calgary economist Ron Kneebone agrees spending needs to be kept under control, but said the government must also look to increase revenues.

“It is clear from all the analyzes I have reviewed that even if they reduced spending to levels comparable to other provinces, they would still be in a position to either run a deficit or have to rely on forecasts. optimistic about oil and gas prices to balance their budgets, ”he said.

He said the easiest way to increase revenue would be to put in place a harmonized sales tax, which would allow about 10 percent of tax revenue to come from tourism.

“I am in favor of the tax that would be the cheapest for Alberta and Albertans and it is an HST. It’s administratively easy, just call Ottawa and say, collect some points.

The government also adjusted its expectations for West Texas Intermediate (WTI) oil to US $ 35.60 per barrel, down from its February estimate of US $ 58.

Bitumen royalties are forecast at $ 686 million, down $ 2.5 billion, while crude oil royalties are expected to be $ 316 million, down $ 819 million. Oil production is expected to fall by around 13% overall.

It is estimated that non-renewable resource revenues will drop from $ 5 billion to $ 1.2 billion.

Toews said the pandemic and the energy price war “blinded our economy, just as it began to show signs of improvement and move closer to pre-recession levels of economic activity.” , highlighting markers such as the increase in drilling rig activity and building permits.

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