The recent price decline in oil is a reason for concern for Albertans. The shortfall, in some cases, has resulted in companies trimming capital budgets, delaying projects and reducing staff. For the Alberta and Canadian governments, the falling price of this important commodity will cause reduced government revenue for schools, hospitals, infrastructure and other essential services.
During my professional life, I have seen this story before. The price of oil will recover and the underlying positive aspects of the Alberta and Canadian energy industry will help us weather this storm. However, the impacts on our dollar, economy and government budgets shows just how important Canadian energy is to Alberta and to Canada.
It is important that we see the opportunity in the midst of our challenges. The Government of Alberta has the opportunity to make changes to our fiscal regime to ensure that the negative impacts of an oil price change are mitigated through smart fiscal policy.
Albertans meet and tackle problems. We need to take the best economic advice and find an answer to the question: how do we maintain core services and expenditures in an economy whose strength depends on natural resources?
All options should be on the table. We need to move this discussion forward in a positive and constructive manner so as to manage today’s challenges and ensure that when the commodity cycle swings against us again, we are prepared.