Ottawa eyes impact of low oil prices

first_imgCanadian Press Keywords Economic forecasts The federal government says it’s carefully monitoring the impact of slipping oil prices on public finances as it prepares to release its fall economic update. Canada’s junior finance minister said Tuesday that even as tumbling energy prices eat away at tax revenues, the government still believes it can deliver a balanced budget next year. OECD raises outlook for Canadian economic growth this year Stagflation is U.S. economists’ biggest fear, SIFMA says Economy lost 68,000 jobs in Maycenter_img Related news Share this article and your comments with peers on social media “Any time there’s a dynamic like falling oil prices that we see happening right now globally, we monitor it very closely,” Kevin Sorenson said Tuesday in Ottawa. “The economic update will give us a little bit better indication as to where we are.” Sorenson said the government will also keep an eye on the oil and gas industry, as prices approach the threshold where it’s no longer worthwhile for companies to develop the resources. “We recognize that a lot of the (tax) revenues come from people working in the oil sector and it’s a major driver,” he said. “This is going to be a challenge … We’ll be responding in some measure to continue to have skill development like we have and to create jobs.” Crude prices dropped below the US$80 level Monday after a Goldman Sachs report predicted oil prices would fall further into the next year with expanding shale production and supply exceeding demand. Bank economists have warned lower crude prices are likely to hurt the overall economic health of a country as dependent on oil production as Canada. However, they say drivers will enjoy cheaper pump prices and believe the weaker Canadian dollar could offset some of the losses by helping to encourage exports. Finance Minister Joe Oliver has said Ottawa still plans to follow through on the Harper government’s pledge to cut taxes for Canadians despite the steep drop in oil prices. The government is expected to release its fall fiscal update soon, although no date has been announced. Facebook LinkedIn Twitterlast_img

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