Alberta warns of tough budget, sees no tax hike
By Jeffrey Jones
CALGARY, Alberta (Reuters) - Alberta is more than C$3 billion ($3 billion) short of its target for sales of oil from the oil sands due to deep discounts on the crude, but the shortfall is not pushing the Western Canadian province to raise taxes, tts finance minister said on Monday.
The Progressive Conservative government of Premier Alison Redford is doing what it can to pry open new markets for the heavy oil it depends on for up to three quarters of its nonrenewable resource revenue. However, it does net expect short-term results, Finance Minister Doug Horner said.
That means a March 7 provincial budget "is not going to be a fun budget," and instead will include a series of tough measures to deal with the much lower-than-expected take from the energy sector, Horner told a business audience in Calgary.
Asked by a reporter if a rough estimate of a C$3 billion shortfall in bitumen revenues for the current fiscal year was close to accurate, Horner said: "I think you need to take out a new napkin because it's a little higher than that."
He did not specify how much higher, saying that numbers are still coming in. The government, which derives almost a third of its revenues from energy, will issue a third-quarter update in February that will include a better picture, he said.
In its second-quarter report, the government warned that its deficit for the current fiscal year, ending March 31, could be triple the C$886 million it forecast initially.
"It's not pretty. This differential has widened during period of time where seasonality would normally indicate that we would get a better result. We did not, and that's going to be reflected in our third quarter" Horner said.
He acknowledged the challenge would be to maintain services in such as areas as health care and education as revenues sputter. But he ruled out an increase in taxes. Continued...