Boost to Canada budget from oil limited: Flaherty

Fri Feb 25, 2011 4:04pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Louise Egan and Richard Woodbury

OTTAWA/HALIFAX (Reuters) - Canada has no strong concerns over the inflationary effects of the surge in oil prices spurred by the Libya crisis, nor does it see any significant boost to federal government revenues.

The rising oil prices "puts next to nothing in the federal treasury," Finance Minister Jim Flaherty said on Friday, downplaying any gain from taxes on corporate profits and suggesting that the oil-rich province of Alberta stands to gain more from royalties.

"It's not a significant revenue concern for Canada as I prepare the budget," the minister told reporters following a speech in Halifax, Nova Scotia.

Flaherty will present the 2011 budget next month, billing it as a prudent spending plan that will eliminate a relatively modest deficit by 2015.

Like other policy makers, Flaherty said he is closely watching for any signs of significant oil supply disruptions that are not offset by increased supply from other producers.

Libya's crude exports have almost halted because of reduced production, a lack of staff at ports and security concerns, industry sources say. Top exporter Saudi Arabia has raised its output above 9 million barrels per day to make up for the disruption.

"We're watching what's going on in the oil markets. I don't think there's reason now to have any strong concerns about any long-term effects," Flaherty said.

Canada has so far been largely immune to rising inflationary pressures that have plagued other countries and contributed to uprisings in Egypt and other Middle East and North African countries.   Continued...

<p>A Fresh Direct employee makes a grocery delivery in New York City, May 6, 2010. REUTERS/Lucas Jackson</p>