Joe Oliver delays 2015 federal budget amid market volatility
Many questions about declining oil prices and the impact on government finances
Finance Minister Joe Oliver says he will delay the federal budget until at least April due to the volatility of the economy.
Oliver said the sharp drop in oil prices is having a complex impact on the country's economy.
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He made the comments in a speech to the Calgary Chamber of Commerce Thursday.
Oliver said he still does not know when the budget will be delivered.
"As the great Yogi Berra once said, 'I wish I had an answer, because I’m tired of answering the question.' That said, given the current market instability, I will not bring forward our budget earlier than April. We need all the information we can obtain before finalizing our decisions."
Federal budgets are usually delivered in February or March, before the new fiscal year begins April 1.
"It's not unprecedented, but it is very unusual to have a budget after the end of the fiscal year," said Duane Bratt, political science professor at Mount Royal University in Calgary. "It shows they need to come up with a new way of figuring out how to deliver a balanced budget, with this economic hole."
All week in Calgary there have been projections about how tough the next 12 months will be in the Alberta city because of low oil prices.
"I appreciate how hard Calgary has been hit by this reality," Oliver told reporters. "These are tough times for the energy sector but we don't need to be pessimistic."
Oliver is travelling the country discussing the upcoming federal budget.
The finance minister is pledging the federal government will be able to balance the budget in 2015 and even post a surplus of about $1.6 billion.
"This great province is being sorely tested by an unexpected and dramatic fall in crude oil prices since last June," Oliver told reporters. "This new reality poses a great, though not entirely an unprecedented, challenge."
Oliver described low oil prices as a complex problem because of the advantages and disadvantages to the country. The drop in gas prices acts like a tax cut for drivers and energy costs are dropping especially for manufacturing and transportation companies.
"On the other hand, the profits of oil companies will suffer, their capital investment will slow and royalty payments will fall along with our government's tax revenues," he told reporters.
The plunge in oil prices is having a significant effect on the Alberta government, which may also delay its budget until after April 1.
"We haven't set a date yet," said provincial Finance Minister Robin Campbell. "Anything is possible."
The Alberta government is currently projecting a $6.7-billion drop in resource revenue based on forecasting oil at $65 US a barrel in the upcoming year.
"We'll make sure our department are comfortable where they are headed and then the premier will make the decision when the budget will come down," Campbell said.