The Alberta government sees oil prices falling as it wrestles with the largest budget deficit in provincial history: $7 billion and counting.
The province now forecasts a West Texas Intermediate price of US$45 per barrel for fiscal year 2015-16, compared to its earlier budget forecast of US$50 per barrel. The province now estimates a Western Canadian Select at Hardisty price average of $41.60 per barrel in 2015-16, compared to the earlier budgeted estimate of $46.50.
Alberta’s non-renewable resource revenue outlook for the 2015-16 fiscal year has dropped by $294 million from the earlier projected budget to $2.47 billion, due largely to a $403 million drop in the bitumen royalty forecast.
“This is the steepest and most prolonged slide in oil prices in recent history, dropping more than 70 per cent in the last year and a half,” Finance Minister Joe Ceci told a news conference to discuss the province’s 2015-16 third quarter fiscal update. “Projections for a quick recovery have proven wrong.”
