UPDATE 1-Canada pushes back budget to April due to market instability

Thu Jan 15, 2015 2:43pm EST
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(Adds remarks on impact to economy, importance of diversifying energy markets away from reliance on U.S.)

By Scott Haggett

CALGARY Jan 15 (Reuters) - The Canadian government will unveil its budget this year later than it usually does, waiting at least until April because of market volatility, Finance Minister Joe Oliver said on Thursday.

"Given the current market instability, I will not bring forward our budget earlier than April. We need all the information we can obtain before finalizing our decisions," Oliver said in the text of a speech he was giving in Calgary.

The federal budget is usually introduced in February or March, occasionally as early as January, given the fiscal year starts on April 1. But lower oil prices have made it tricky to predict government revenues and what the economy will do.

Oil prices have more than halved from their peak last June, hit by rising production and weaker-than-expected demand in Europe and Asia.

"Given the current volatility, there is no consensus about how low will prices fall and how long will they stay there," Oliver said. "Nevertheless, every knowledgeable person I have spoken to believes, and history tells us, that prices will eventually move well above current level."

He said lower oil prices create both benefits and difficulties for the Canadian economy. Among the benefits are enhanced consumption and savings.

"Also, energy costs for manufacturing and transportation companies decline, along with the Canadian dollar, which makes these and other sectors more competitive," he said.   Continued...