I don't know if anyone else has been paying attention, but Danielle Smith is spending a lot of money, for a conservative, and this is beginning to concern me. The previous administration managed to balance the budget and eliminate the deficit (1, 2) during a time frame that included the disastrous COVID lock-downs. This was an unprecedented time when the price of oil plummeted and industry was artificially hamstrung. Previous Premier Kenny saw oil drop during his administration to under $12 a barrel. That's right, a barrel of oil was that low! During the length of Kenny's tenure as Premier, oil's average price was in the $50 range. Cuts were made and the budget was balanced to operate within that reality. But now, we can't balance our budget unless oil is pushing $80/barrel? Something is wrong here.
The CBC reported this:
Slumping oil prices are ... delivering a financial hit to some provinces as they prepare their next budgets — notably Alberta.
Oil prices have fallen by almost 40 per cent since reaching a high of more than $120 US per barrel in 2022. Oil was trading at more than $90 in September, but this week, prices have fluctuated in the low $70s (all figures in US dollars).
The Alberta government wraps up public consultations on its next budget this week, and experts aren't sure whether the province will be able to balance its books when the next budget is unveiled in February.
Alberta is on a "knife's edge," said University of Calgary economics professor Trevor Tombe, as it's too hard to predict if the province will project a budget surplus or deficit for the next financial year.
"If we go into this coming fiscal year ... with $72 per barrel, that might put the government into a situation where they either have to revise their spending plans or face a modest deficit," ...
Yes!! Revise your bloody spending! Don't use a high oil price as an excuse to expand your spending, but use it to pay down our debt.
Sure, oil may go to $100 this summer depending on Iranian pirates in the Persian gulf, and if that happens then our budget will again be in the clear, but sound fiscal conservatism isn't dependent on high oil prices.
Or maybe I'm just crazy,
ABE.
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