This article was last updated on April 16, 2022
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The parliamentary budget officer has recently revealed that he thinks the drowning oil prices are anticipated cost at least $7.6 billion a year to the federal government in lost revenue, which might dwell it into several more years of deficit budgets.
According to the report released on Tuesday, the budget watchdog speculated on the impact of the decline in oil prices on the federal fiscal picture, alleging that the worst case could be a deficit of $1.2 billion this year and a deficit of $400 million in 2015-16, even after exhausting a $3 billion contingency fund. However, the parliamentary budget officer did point out that the government still has enough wiggle room in its budget to show a surplus despite the oil price hit, allowing the Conservatives to keep their vow of a balanced budget. Assistant budget officer, Mostafa Askari, alleged that a balanced budget is “very feasible” in 2015-16 due to the government’s ability to find savings by slowing spending or delaying capital projects. Askari stated that “there are many ways that the government can actually find some revenues or some savings on the spending side to make sure the balance is there.”
Prime Minister Stephen Harper and Finance Minister Joe Oliver have repeatedly insisted that the upcoming budget will show a surplus. Mr. Oliver recently stated that “the contingency fund is there for unexpected and unavoidable events of which a precipitous decline in oil prices is. So we may or may not need to use the contingency fund but if we do it will be entirely consistent with government policy,” Oliver told reporters.
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