A 90% plunge in oil and gas royalty revenues is likely to blow a $10-billion hole in Alberta’s budget when the government tables it tomorrow, Premier Rachel Notley warned her province late last week.
The Alberta premier used a province-wide address to prepare her citizens for bad financial news—and to plead with other Canadians for assistance, in the form of pipeline passage for Alberta’s tar sands/oil sands crude to export terminals.
“Two years ago, the province of Alberta collected almost $10 billion from royalties,” Notley said in her address. This year the province expects to receive just one-tenth that.
“Royalties account for one fifth of the province’s revenues,” iPolitics reports. Notley said the shortfall means tomorrow’s budget will run more than $10 billion in the red.
That will double the $5 billion deficit initially forecast in last year’s $48.4-billion provincial budget, the last brought in by the former Progressive Conservative government before its defeat by Notley’s New Democrats last May.
Since then, rock-bottom oil prices have decimated the province’s economy. Unemployment has increased from 4.7% in 2014 to 7.9% earlier this year (still well below double-digit national unemployment rates experienced during recessions in the 1980s and 1990s). Food bank use jumped 23% last year over 2014.
“It’s a scary time for many families,” Notley said.
She used the same address to urge the rest of Canada to approve new export pipelines for Alberta synthetic crude oil—a move Notley said would bring relief to her province’s struggling economy and greater prosperity to the rest of the country.
“Every Canadian benefits from a strong energy sector,” Notley insisted. “But we can’t continue to support Canada’s economy unless Canada supports us. That means one thing: building a modern and carefully regulated pipeline to tidewater. We must get to ’yes’ on a pipeline.”