* Agency says books may not balance for another year
* 2013-14 deficit could hit C$4 billion
* Redford has not yet ruled out deficit elimination
By Jeffrey Jones
CALGARY, Alberta, Jan 31 (Reuters) - Moody’s Investors Service forecast something on Thursday that Alberta’s premier will not yet admit - that a projected C$6 billion ($6 billion) shortfall in oil revenue will likely force the Canadian province to miss its target of balancing the books this year.
Premier Alison Redford has said an unusually deep discount on the price of heavy crude from Alberta’s oil sands is forcing her Progressive Conservative government to consider tough cost-saving moves for its 2013-14 budget, due on March 7.
In a report on Thursday, Moody‘s, the influential credit-rating agency, said Alberta’s finances are becoming more strained with the price spread between its Western Canada Select heavy crude and U.S. benchmark West Texas Intermediate remaining wide. Energy revenues make up nearly a third of the province’s total.
“The projected continued decline in resource revenues and the province’s significant reliance on these revenues are credit negative and will likely mean Alberta will need to extend its time frame back to budget balance past 2013-14,” Moody’s analyst Jennifer Wong wrote.
Alberta has already warned that its deficit for the current fiscal year, ending March 31, could be triple the C$886 million it forecast initially. Deeply discounted crude is blamed on a combination of growing production, increasing competing supplies in the United States and limited pipeline capacity.
Wong estimated that the drop in revenue, should the prices for Canadian and U.S. crude stay at current levels, could mean a deficit of C$4 billion for 2013-14.
In Toronto on Wednesday, Redford would not rule out the prospect of balancing the books in the year to March 2014. But she also said she will not impose new levies, such as a sales tax, or reinstate health care premiums to boost revenues.
Ways currently being considered to save money are more public-private partnerships as well as tapping debt markets to build schools, roads and other infrastructure. “I‘m not going to foreshadow anything else right now,” Redford said.
WCS crude sold for $58 a barrel in January, or about 62 percent of the WTI price on average. Moody’s pointed out that pipeline expansions planned for 2013 could help narrow the price differential.
That could help put the province on track to balance its books for the following fiscal year, the report said.