Oil prices plunge: Premier promises to take action

Premier Jason Kenney says his government will consider whatever measures it takes to rescue the province from an oil price collapse, and he wants the federal government to step up as well.

The price for West Texas Intermediate crude fell to just under US$30 a barrel on Monday. Alberta has budgeted its oil revenue based on US$58 a barrel.

Each $1 drop in price represents a cut of about $200 million from Alberta’s bottom line.

Red Deer & District Chamber of Commerce CEO Rick More said the business group’s provincial body cautioned the government in its post-budget review to be flexible in its revenue forecasts and ensure the province’s workers were not negatively affected.

“The domino effect has happened with COVID-19, and locally, businesses are very concerned of the ensuing impact,” said More.

“We have a belief that we will weather the storm, but this comes as we are just starting to gain some momentum. The volatility of markets and sales revenues is always very unpredictable during world events.”

Kenney says energy exports are the linchpin of both the Alberta and federal economies.

He says he’ll be asking Ottawa for financial incentives to help create jobs in reclaiming orphan wells and to provide relief on payroll taxes.

He says Alberta has been good to Canada and it’s time for Canada to return the favour.

Kenney says his own United Conservative government will look at a range of choices that include borrowing money for more capital spending to boost jobs, a return to tax incentives to lure high-tech startups and directly subsidizing a barrel of oil.

The premier is striking an emergency panel to be headed up by economist Jack Mintz.

“All options will be on the table. I repeat: all options will be on the table to do everything that we can within our capacity to help protect jobs and Albertans,” Kenney told a news conference in Calgary on Monday.

“This is not just about Alberta. As Alberta goes, so goes the national economy.”

Kenney, saying now is not the time for partisan politics, said he’ll be reaching out to rival politicians, including Opposition NDP Leader Rachel Notley, for advice.

Notley, speaking at a news conference in Edmonton, said Kenney needs to withdraw his budget and submit a new one that recognizes how free-falling oil prices are decimating revenues.

Notley said the low prices will conservatively send the projected deficit for 2020-21 to almost $11 billion from $6.8 billion.

She said Kenney has left Alberta vulnerable by slashing corporate income taxes last year and using wildly optimistic oil revenue projections in the budget introduced almost two weeks ago.

Kenney said he will not be withdrawing his budget. He noted it’s three weeks to the end of the fiscal year and said the province needs a new budget in place.

Ryan Morcom, a financial planner with Red Deer’s Pellegrini Financial and Investment Planning Counsel, said Monday that despite the recent economic turbulence, he has only had a couple of calls from investors seeking reassurance.

“I’m certainly not getting a ton of calls by any means. But clients are certainly aware of what’s going on.

“It’s hard to take emotions out of the equation. When you see the red numbers across the screen, or across the boards, it’s certainly disconcerting for people.”

Morcom said financial advisers such as himself structure people’s investments and retirement savings so they are able to weather financial storms.

— With files from The Canadian Press

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