Alberta's Finance Minister Joe Ceci says the province's 2016-2017 deficit could exceed October's $5.4B forecast by an additional $5B.
The province had set the budget with a projected oil price of $50 per barrel but the actual price has been sitting well below that for some time.
On Wednesday, Ceci says revenue was $660M lower than estimated primarily due to a decrease of $762M in revenue from Personal Income Tax. Revenue numbers have been offset by the federal government's stabilization funding ($250M) and increased fuel and tobacco tax revenue ($49M).
Premier Notley says federal money will help, but more is needed. "We are off to a good start today with this announcement and I know all Albertans welcome this first indication that the federal government will work with us."
Alberta is seeking a further $700M in infrastructure money promised by Prime Minister Trudeau when he visited the province earlier this month. He also promised changes to the EI system to help laid-off Alberta workers.
Provincial spending in 2015-2016 was $463M lower than projected due in part to pension payments ($202M lower than estimated), disaster assistance payout ($182M lower than estimated) and capital grants ($113M lower than estimated).
Meanwhile, economists say that the funding announced yesterday could be put into good use for those same infrastructure projects.
"They could take this $250M and top it off, for infrastructure projects say, for example, to accelerate the Green Line here in Calgary, the LRT line, and some of those big infrastructure projects that are ready to go and are also worthwhile doing," says ATB economist Todd Hirsch. "My fear is that $250M is spread out too quickly, too thinly and it really doesn't have any impact at all."
The fiscal stabilization program hasn't been used since New Brunswick received $6M over 20 years ago.
