Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Wednesday January 14, 2015
The Dominoes Fall Toward Harper
Updated forecasts by TD Economics project that the Conservative government will be in deficit for two years longer than originally planned due to the sudden drop in oil prices and the impact of tax cuts announced in the fall.
Rather than a $1.9-billion surplus in 2015-16 as outlined in Finance Minister Joe Oliver’s fall fiscal update, TD Economics is projecting a $2.3-billion deficit, followed by a $600-million deficit the following year. The return to surplus would be pushed back to the 2017-18 fiscal year.
However, the report cautions that the government has put aside $3-billion a year for unforeseen events and that amount could still be enough to post slim surpluses in the coming years. It would not be enough, though, to allow the government to announce major new spending in the 2015 federal budget. (Source: Globe & Mail)
Meanwhile, the Conference Board of Canada is predicting that Alberta will slip into a recession before the end of 2015.
It says the plunging price of oil is impacting all areas of the economy from corporate investment and hiring to consumer spending.
“The province is certain to suffer, especially on the employment front, from the drop in oil prices — and it is likely to slip into recession,” said a report by Conference Board of Canada economist Daniel Fields.
During Alberta’s last recession, roughly 30,000 jobs were lost and housing starts fell by 75%. If prices do not recover soon, Alberta could take a similar hit, according to the Conference Board. (Source: CBC News)