UPDATE 1-Canada's Flaherty says budget being hit by oil discount

Wed Feb 6, 2013 2:53pm EST
 
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* Crude price discount hurts federal revenues

* Flaherty says will balance budget by 2015

* No decision yet on infrastructure spending

By Randall Palmer

OTTAWA, Feb 6 (Reuters) - Current discounted prices for Canadian oil are slowing the growth of nominal gross domestic product and therefore Canadian government revenues, Finance Minister Jim Flaherty said on Wednesday.

Delayed pipeline projects and an excess of supply in crude-rich Alberta mean Canada is forced to sell some heavy crude at a deep discount to world prices, although that price gap has recently narrowed.

Alberta, Canada's largest oil-producing province and the largest foreign energy supplier to the United States, has already warned of a C$6 billion ($6 billion) revenue shortfall in its provincial budget as a result.

Now the federal Conservative government says it too will take a hit.

"It is obviously a concern, not only in Alberta, but in our government ... it affects our budgeting because it affects commodities prices, obviously, which affect the level of nominal GDP, which affects federal revenues," Flaherty told reporters after a speech.   Continued...