Paul Martin commentary
We now have all the spring budgets from the provinces and, not surprisingly, the amount of red ink being spilled across the land is growing.
Well, at the provincial level at least as the feds spring statement showed a smaller than expected spread between revenue and expenses even though provinces like Alberta projected big shortfalls running in the billions.
Nonetheless, the capacity of regional economies and their constituents is being tested but, a report prepared by RBC says, the high price of oil may actually buffer some of this difficulty.
Last year, provincial deficits represented roughly one-half of one percentage of the GDP of the provinces. This year that doubled to 1.1-percent.
The thing is, though, these budgets were formulated before the Middle East war, back when oil was $60 a barrel. Now that it’s over $100, things have changed.
Saskatchewan will be a beneficiary but the big one is Alberta. It could see a $13 billion reversal, not only pushing it back into the black but putting the national GDP figure into positive territory.
