Paul Martin commentary
Every time we fill up at the gas pump we are reminded that oil prices have gone up a lot since the middle east war broke out. But the provincial treasury is seeing the exact opposite as higher oil prices mean higher revenues.
But how much of an impact will those prices have on the government’s fiscal position?
A report from the economics team at ScotiaBank says it will help but we’re a long way from seeing Saskatchewan moving from a deficit to a surplus position.
This year’s provincial budgets were written when oil prices were much lower so they have probably underestimated their resource revenues.
According to the bank, if the price were to average $75 a barrel for the year, Alberta would probably move from a $9 billion deficit to a modest surplus. At $95 a barrel, it would post a $15 billion surplus.In Saskatchewan, we’d need the $95 a barrel scenario to break even, something considered unlikely as oil prices are expected to fall if a peace deal is worked out.
