Ottawa faces deficit with low oil prices, budget watchdog says
Plunging oil prices will cost Ottawa billions of dollars in lost revenue but the Conservative government has enough wiggle room in its budget to weather the turmoil and still balance the books, the parliamentary budget officer says.
A new analysis released Tuesday confirms that low oil prices mark an unwelcome development for Conservatives and their pledge to balance the books this year.
In a report, <http://www.pbo-dpb.gc.ca/files/files/LowOilPrices_EN.pdf> the budget watchdog assessed the shock of dropping oil prices on the federal fiscal picture and said it would mean, worst case, a deficit of $1.2 billion this year and a deficit of $400 million in 2015-16, even after exhausting a $3 billion contingency fund.
Still, officials with the parliamentary budget office said the government can tinker with its fiscal plans to show a surplus despite the oil price hit, allowing the Conservatives to keep their vow of a balanced budget
Mostafa Askari, assistant budget officer, said a balanced budget is “very feasible” in 2015-16 thanks to the government’s ability find savings by slowing spending or delaying capital projects.
“There are many ways that the government can actually find some revenues or some savings on the spending side to make sure the balance is there,” Askari said. (Source: Toronto Star)
Published on National Newswatch and in the Winnipeg Free Press.