January 23, 2015 / 10:54 PM / in 4 years

Canada could tap contingency fund on oil drop: Oliver

OTTAWA (Reuters) - A contingency fund set aside for unexpected events could be used to offset the blow from the recent slide in oil prices, according to comments from Finance Minister Joe Oliver, a move which could help Canada’s Conservative government balance the budget this year.

Canada's Finance Minister Joe Oliver listens to a question while speaking to journalists before the start of a meeting with his provincial and territorial counterparts in Ottawa December 15, 2014. REUTERS/Chris Wattie

“The contingency fund is there for unexpected and unavoidable shocks to the system and, you know, the oil price decline – which was a dramatic one – would fall in that category,” Oliver said in an interview with the television program The West Block, according to a partial transcript.

Even so, that doesn’t mean the government will use it, just that they are not ruling it out, Oliver said. The interview will be aired on Sunday.

After running a large budget deficit in the wake of the 2008-09 financial crisis, the government has promised to balance the books in 2015. The budget forecast includes a C$3 billion ($2.42 billion) contingency fund.

The comments appear to contradict those from Employment Minister Jason Kenney, who last weekend told the same program that the government would not be using the contingency fund because it’s designed for events such as natural disasters.

Kenney also said the government is prepared to curb spending to eliminate the deficit this year.

“I’m speaking as minister of finance so I’m sort of current on the thinking here,” Oliver said.

Oliver said last week that the government will wait until at least April to unveil its budget this year due to market volatility. The federal budget is usually introduced in February or March, and occasionally as early as January, given the fiscal year starts on April 1.

Reporting by Leah Schnurr; Editing by Chris Reese

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