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The province’s finance minister, Donna Harpauer, says the 2020-21 budget is finished and Monday’s deep plunge in oil prices doesn’t factor into it.
“We had made some adjustments already for the downturn in the markets, but the plunge of (Monday) wouldn’t be (factored) into the budget,” she said Monday afternoon after Question Period.
Oil prices fell almost 20 per cent after Russia refused to roll back production in response to falling demand and Saudi Arabia signalled it will ramp up its own output, according to the Associated Press.
As of Tuesday morning, West Texas Intermediate crude oil was priced at US $33.49 per barrel. Western Canadian Select oil was priced at US $15.73 per barrel. Canadian Crude Index oil was priced at US $20.18 per barrel.
“Everything has changed. We already had serious concerns that we weren’t going to see a very honest or valid budget from a budget that’s about to go into a snap election, that’s wanting to put the best face on a bad situation,” said NDP Leader Ryan Meili.
“We’ll see another move down the road that we saw in 2017. Deep cuts to health care and education, sell off of our crowns, increased taxes on regular people. (The Sask. Party government) will go down the same path they always have.”
Harpauer said oil revenues constitute 4.5 per cent of the upcoming budget, to be released on March 18.
“Should it stay at $30 per barrel for an entire 12 months, we’re only looking at about a half-billion-dollar shortfall. And by changing our revenue streams and making our budget more stable, we’ve been able to change what we would need to adjust to stay long term,” she said.
The finance minister expects Monday’s price drop to be short-lived. If it lasts for an extended period, she and the ministry will be adjusting the budget in the first quarter of the new fiscal year.
“I don’t think we should adjust it, you know, every time there’s something that is a plunge in a resource revenue that is only 4.5 per cent of your budget,” she said.
“You can’t knee-jerk react with every price change of course.”
When the Alberta government released its budget in late February, it projected a 12-month average West Texas Intermediate price of US $58 per barrel.
On Monday, Harpauer, said she’s not expecting a huge spike in oil prices.
“We had very, very high oil prices,” she said. “I don’t think that’s going to be the norm for some time. But I don’t think they will remain at $30 per barrel.”
