Oil price collapse threatens Alberta budget

Ever since Donald Trump’s latest tariff announcement, oil prices are way down. About $10 a barrel, and that is very bad news for Alberta’s budget.

If prices stay where they are, the province’s deficit could be at least $5 billion higher.

“We’re seven days into our new budget, so I tend not to panic on seven days’ worth of data. We had a lot of variation last year, we have a worst-case scenario budget, we knew we were going to end up with a lot of volatility,” Smith explained.

Alberta’s new budget pegs the price of West Texas Intermediate at $68 a barrel, it hovered around $61 Monday.

The province says each dollar below its estimate takes away $750 million in revenues.

The finance minister says, unfortunately, there’s not much he can do about this.

“I just got off with the deputy governor of the Bank of Canada and the rest of the federal finance colleagues. Everyone is in a hunker down and weather through this approach. They’re not getttig a lot of comment back from the us administration right now,” said Minister Nate Horner.

Last week, Smith called Trump’s tariff announcement a big win for Alberta and Canada. So, does she now regret taking that victory lap?

“Well, when you look at what we were able to advocate for, we have zero tariffs on energy, zero tariffs on food, zero tariffs on the vast majority of products covered by the U.S.-Canada free trade agreement,” said Smith.

But NDP leader Naheed Nenshi says Smith was clearly wrong for celebrating.

“We’re in big trouble. Global markets have lost trillions of dollars. The price of oil, WTI and Western Canada Select, is down $10, which will lead to probably an additional $6-10 billion deficit for the province of Alberta,” said Nenshi.

The premier was asked if her government is preparing aid packages in case. There are mass layoffs. She suggested Ottawa should take responsibility for that.

But the NDP believes Alberta also needs to step up.

“We will see job losses. We will see small and medium-sized businesses close and we can’t rely only on the federal government for income support, for retraining, for helping people start new businesses. It’s very important that we focus on helping people now,” said Nenshi.

The NDP has called for an emergency debate in the legislature, but the finance minister pointed out that it will not help the price of oil recover.