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By Scott Haggett
CALGARY, Alberta, April 7 (Reuters) - Alberta Premier Jim Prentice on Tuesday called an election in Canada's wealthiest province, the largest source of U.S. crude imports, as he looks to extend his party's 43-year reign even as weak oil prices threaten to push the economy into recession.
Prentice, a former investment banker and federal minister who took over the leadership of the ruling Progressive Conservatives in September, dissolved the provincial legislature and called an election for May 5 as he seeks to add another majority on top of the party's 12 straight election victories.
Though his party controls 70 seats in the 87-member legislature, recent polls suggest the Progressive Conservatives' popularity is about on par with the opposition Wildrose Party after Prentice last month introduced a deficit budget heavy on tax hikes and user fees as the government tries to replace revenue from the hobbled oil industry.
"We face major challenges because of plunging oil prices which have created such a shock, not just in Alberta but really around the world," Prentice told a gathering of party supporters in Edmonton, the provincial capital. "... Tough choices need to be made."
The province usually relies on payments and royalties from its energy industry to fund nearly a fourth of its annual budget. However with oil prices down by half since June, the Prentice government expects revenue from the sector to fall under C$3 billion ($2.4 billion) this year from C$8.8 billion in 2014.
Prentice also faces rising unemployment as thousands of workers in the province's oil sands, the world's third-largest crude reserve, have been laid off from projects operated by Suncor Energy Inc, Royal Dutch Shell Plc, Cenovus Energy Inc and others as they slash capital spending to cope with weak prices.
The province's unemployment rate, which stood at 4.4 percent in November, rose to 5.3 percent in February, with 14,000 jobs lost in the month, according to Statistics Canada. However despite the losses, Alberta's rate was still well below the 6.8 percent national average.
The economic headwinds have some forecasters, including the Conference Board of Canada, predicting the province of four million people will fall into recession this year. However other forecasters and the government still expect the economy to grow in 2015, though well below the estimated 2014 rate of 3.8 percent. ($1 = 1.2485 Canadian dollars) (Editing by Lisa Von Ahn; Editing by James Dalgleish)