By Shaun Penner

Ballooning Deficit

Provincial deficit could triple to $20 billion this year: Premier

Apr 7, 2020 | 7:03 PM

Despite efforts to balance the budget within their first term, Premier Jason Kenney ultimately shot down the idea of the United Conservative government reaching that goal on Tuesday evening, saying that the COVID-19 pandemic could lead to the province’s budget deficit tripling from $7 billion, to $20 billion this year.

Kenney made that statement as he underlined the province’s economic recovery plan, coming out of the COVID-19 pandemic.

“The end of the pandemic will not be the end of the economic downturn, the likes of which we have not seen since the 1930s,” said Kenney. “We expect a global economic recovery from COVID-19 later this year. But the crash in energy prices means that Alberta’s downturn will be deeper, and our recovery slower.”

That crash in energy prices is both caused by a halt in global demand, as well as a price war led by Saudi Arabia and Russia, which has over-flooded the market.

That has led to Western Canadian Select Oil being traded for as low as $3 US a barrel, closing Tuesday just above $4 US.

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“There is a very real possibility that, as global inventories overflow, our energy will hit negative prices.”

“I cannot overstate how grave the implications of this will be for jobs, the economy, and the financial security of Albertans.”

With that, the Premier said Alberta has made moves to stabilize Alberta’s energy future. These moves include beginning discussions on a coordinated defence of North American energy with the United States, the investment in the Keystone XL pipeline, and the appointment of an Economic Recovery Council.

Those investments, plus other moves made by the provincial government will ultimately lead to the ballooning deficit, according to Kenney.

“And we have taken extraordinary action to help families and employers, committing $12 billion to our COVID-19 Action Plan. That includes over two dozen initiatives, like deferrals on taxes, mortgages, utility payments, and student loans; extra money for homeless shelters and charities serving the isolated; and emergency isolation payments.”

Kenney added that investment into further job creating infrastructure projects are slated to happen soon.

Kenney also said to an energy industry conference Tuesday that Alberta’s unemployment could hit 25 per cent as a result of the pandemic.