Canada's Harper: economy will continue to grow despite oil slump

Wed Mar 4, 2015 2:34pm EST
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By Andrea Hopkins

TORONTO (Reuters) - The Canadian economy will continue to grow despite a sharp fall in the price of oil, but there is plenty of concern in the energy-producing province of Alberta, Prime Minister Stephen Harper said on Wednesday.

Harper, speaking to reporters after an event in Toronto, also repeated a promise that his Conservative government would balance the budget in the 2015-16 fiscal year. Canada is a major oil exporter.

The price of U.S. West Texas Intermediate crude, the North American benchmark, dropped by more than half between June 2014 and January because of abundant supply. It has recently been trading close to the $50 mark, up from a low of $45.

"The economy will continue to grow this year in Canada, albeit at less of a rate than we would have expected a year ago, and under those circumstances the government will balance the budget," said Harper.

The Canadian economy grew at a 2.4 percent annualized rate in the fourth quarter of 2014, down from 3.2 percent in the third quarter, Statistics Canada said on Tuesday.

The slump has prompted Alberta energy firms to lay off workers and slash spending.

"There is plenty of concern about this (in Alberta) and there will be effects and people understand that. People can see some of that," said Harper, who represents a parliamentary constituency in Alberta.

The prime minister though said the province's energy industry was resilient and would remain strong.   Continued...

Canada's Prime Minister Stephen Harper speaks as he announces that the government will introduce legislation to give criminals life sentences with no parole for serious crimes such as murder, sexual assault, kidnapping, and terrorism, in Toronto, March 4, 2015. REUTERS/Mark Blinch