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Source: The Canadian Press
Dec 11, 2014 18:25
By Andy Blatchford
THE CANADIAN PRESS
OTTAWA _ Provincial finance ministers are having their first face-to-face meeting with federal counterpart Joe Oliver this weekend and it’s expected they’ll discuss falling oil prices _ but they’ll do so without the minister from Alberta.
A spokesman for Robin Campbell said he is so busy grappling with low prices that he can’t get away.
“Minister Campbell is not attending the meetings in Ottawa on Sunday and Monday,” said press secretary Kevin Zahara.
“He’s going to be back here … working on budget. (It’s) very concerning with the low price of oil, so he’s getting that work underway.”
Alberta will send a department official and will try to set up a one-on-one between Campbell and Oliver in the near future, Zahara said.
Revenue from oil has dominated debate in petro-powered Alberta in recent days. In March, the province budgeted on an average price this year of US$95 a barrel, but recently revised that to US$75 a barrel.
Premier Jim Prentice has said a prolonged low will rob Alberta of billions of dollars it relies on to run day-to-day operations. He’s warned of belt-tightening and has not ruled out changes to corporate and personal income taxes.
On Thursday, the price of oil fell below US$60 for the first time since July 2009. Oil is down almost 45 per cent since reaching a high of US$107.26 for the year in late June.
Saskatchewan Finance Minister Ken Krawetz said he expects the ministers to discuss the plunging price, which threatens to erode public finances in all the oil-rich provinces as well as in Ottawa.
“We are concerned about the loss of revenue. There’s no question about that,” Krawetz told The Canadian Press in an interview.
“We’re also concerned that if indeed there is a prolonged decline, what will be the effect across the entire nation with regards to oil?”
In oil-producing Saskatchewan, Krawetz estimates provincial coffers will lose about $20 million for every $1 drop in the price.
Alberta estimates it loses about $215 million over a 12-month period for every loonie shaved off the price of oil.
“Those are things that we’re going to have to be aware of _ if the federal government is looking at ensuring that there is support for a particular industry,” said Krawetz, who also serves as deputy premier.
He said the federal-provincial gathering begins with a dinner Sunday, followed by sessions Monday that are to include a presentation by Bank of Canada governor Stephen Poloz.
Krawetz said he was looking forward to hear any further insight Poloz may offer into global conditions affecting oil prices.
Krawetz predicted discussions are likely to dwell on the state of the world economy.
“It’s not necessarily oil,” said Krawetz, who also plans to discuss his province’s ongoing shortage of skilled workers, its need to improve aboriginal education and allocation of federal infrastructure cash.
“We are in a fragile situation … I think that’s going to be on the top of mind of all finance ministers.”
Ontario Finance Minister Charles Sousa has signalled there are other issues. On Thursday, he sent a four-page letter to Oliver with concerns over Ontario’s share of transfer payments to federal infrastructure investments. Sousa also suggested there’s a lack of transparency in the employment insurance program.
“Ontario is looking to the federal government to be a committed partner that treats Ontarians fairly,” Sousa wrote.
“The upcoming finance ministers meeting is an opportunity to work together on issues that will grow the economy, strengthen services and help communities and families, as well as deliver on what Canadians expect of us: that we collaborate to build a stronger economic union.”
The gathering will give finance ministers their first opportunity to meet face to face with some newly appointed provincial colleagues and with Oliver, who took over from Jim Flaherty earlier this year.
The provincial ministers met with Oliver by video conference in June.
Experts say the future is in flux.
On Thursday, a U.S. credit rating agency said Canadian provinces can expect more economic uncertainty in 2015. The provincial outlook prepared by Moody’s Investor Service predicted most provinces, many of which are hesitant to cut spending any further, will run deficits next year.
It also said provincial revenue growths can expect to feel the impact of global economic uncertainty and lower oil prices.
_ With files from Dean Bennett in Edmonton
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