Discussion:
'Dramatically lower oil prices' won't hurt budget . . . ^ω^
(too old to reply)
(ಠ_ಠ)
2014-12-17 02:02:45 UTC
Permalink
Now, if you believe that, then you're one of the 30% (or less) that still
support this lying PM.

This Prime Minister lies through his teeth to try to maintain credibility with
Canadian voters, yet can't resist taking a swipe at the leader of a distant
country which is also feeling the impact of dropping oil prices. Harper is
nothing if not the most petty leader this country has ever seen . . . .

(So he's short-changed the provinces by holding back $3 billion taxpayer
dollars in a 'contingency fund'? I wonder how much he has of our money stashed
in his home safe?)
_________________________________

December 16, 2014 - Globe and Mail

'Dramatically lower oil prices' won't stop balanced budget, Harper says


Stephen Harper insists his government will post a surplus next year even with
dramatically lower oil prices, a strong expression of confidence from the Prime
Minister that comes as private sector economists express growing doubt that
Ottawa will climb out of deficit next year

Stephen Harper insists his government will post a surplus next year even with
dramatically lower oil prices, a strong expression of confidence from the Prime
Minister that comes as private sector economists express growing doubt that
Ottawa will climb out of deficit next year.

Speaking at a Quebec City event in which he announced $35.7-million for
heritage sites, Mr. Harper said he is certain the federal government will
return to surplus next year.

"You should be under no doubt that the government will balance its budget next
year. We are well within that range, even with dramatically lower oil prices,
we will balance the budget," he said.

Mr. Harper's government is currently projecting a $1.6-billion surplus for
2015-16, a figure that is based on assumption that the price for North American
crude will average around $81 (U.S.). The price of oil has since dropped
significantly, trading around $56 this week.

Still, the Prime Minister acknowledged the lower oil prices will affect the
government's "flexibility." While he did not specify what that means, the
Conservatives are planning a 2015 pre-election budget and this could limit the
amount of new spending or tax cuts that the government could announce.

While lower oil prices hurt energy-producing provinces like Alberta,
Saskatchewan and Newfoundland and Labrador, they can benefit manufacturing
provinces like Quebec and Ontario, especially with a lower Canadian dollar.
Overall, the impact is negative for economic growth in Canada, which translates
into less tax revenue coming in to Ottawa.

The government has also set aside a $3-billion contingency for unforeseen
events. Several economists said this week that the contingency reserve should
be enough to maintain a small surplus, but that it will be close.

Bank of Montreal chief economist Doug Porter told The Globe this week that
fluctuating oil prices amount to a "huge wild card" for finance ministers that
will make it very difficult to produce economic forecasts.

"It looks like [Ottawa] might still be able to claw out a surplus if absolutely
everything went right from here, but we know better than to expect everything
to go right. So I think very much they're at risk of remaining in deficit in
the next fiscal year based on today's oil prices," he said.

Economists generally say it makes little practical difference whether or not
Ottawa is in a small surplus or deficit, provided that long-term trends are
positive. However the Conservatives have made a balanced budget by 2015-16 a
key political pledge.

The 2011 Conservative election platform promised to eliminate the deficit in
2014-15 – the current fiscal year. The government's fall fiscal update
indicated that that likely would have occurred if not for the government's new
policy measures, which include tax breaks for small business and Canadian
families with children under 18. The Prime Minister has previously said Ottawa
will post a deficit in 2014-15.

Mr. Harper said Tuesday that lower prices will have an impact on revenue, but
indicated it will not be enough to eliminate the surplus.

"The only question will be how much flexibility we have in the short term. This
will obviously reduce some of our fiscal flexibility but it will not, by any
means, stop us from reaching a balance and at the same time, as you know,
making the important investments we've made," he said.

Unprompted, Mr. Harper then went on to note the impact of lower oil prices on
Russia.

"A you know, the fall of oil prices is having important effects around the
world. There are economies a lot more dependent on the oil price than Canada's,
or frankly than Alberta's, and one of them is Russia," he said. "I think we are
all noticing the difficulties that are emerging in Russia, partly because of
falling oil prices, partly because of poor governance of the economy and also
partly because of sanctions that have been imposed by us and by our allies and
obviously as these factors bite, we encourage Mr. Putin to respect the
sovereignty and territorial integrity of its neighbours and also to act in a
way that's less aggressive towards the international community."
Alan Baker
2014-12-17 03:03:45 UTC
Permalink
Post by (ಠ_ಠ)
Now, if you believe that, then you're one of the 30% (or less) that
still support this lying PM.
This Prime Minister lies through his teeth to try to maintain
credibility with Canadian voters, yet can't resist taking a swipe at
the leader of a distant country which is also feeling the impact of
dropping oil prices. Harper is nothing if not the most petty leader
this country has ever seen . . . .
(So he's short-changed the provinces by holding back $3 billion
taxpayer dollars in a 'contingency fund'? I wonder how much he has of
our money stashed in his home safe?)
Lacking anything real to say...
Post by (ಠ_ಠ)
_________________________________
December 16, 2014 - Globe and Mail
'Dramatically lower oil prices' won't stop balanced budget, Harper says
Stephen Harper insists his government will post a surplus next year
even with dramatically lower oil prices, a strong expression of
confidence from the Prime Minister that comes as private sector
economists express growing doubt that Ottawa will climb out of deficit
next year
Stephen Harper insists his government will post a surplus next year
even with dramatically lower oil prices, a strong expression of
confidence from the Prime Minister that comes as private sector
economists express growing doubt that Ottawa will climb out of deficit
next year.
Speaking at a Quebec City event in which he announced $35.7-million for
heritage sites, Mr. Harper said he is certain the federal government
will return to surplus next year.
"You should be under no doubt that the government will balance its
budget next year. We are well within that range, even with dramatically
lower oil prices, we will balance the budget," he said.
Mr. Harper's government is currently projecting a $1.6-billion surplus
for 2015-16, a figure that is based on assumption that the price for
North American crude will average around $81 (U.S.). The price of oil
has since dropped significantly, trading around $56 this week.
Still, the Prime Minister acknowledged the lower oil prices will affect
the government's "flexibility." While he did not specify what that
means, the Conservatives are planning a 2015 pre-election budget and
this could limit the amount of new spending or tax cuts that the
government could announce.
While lower oil prices hurt energy-producing provinces like Alberta,
Saskatchewan and Newfoundland and Labrador, they can benefit
manufacturing provinces like Quebec and Ontario, especially with a
lower Canadian dollar. Overall, the impact is negative for economic
growth in Canada, which translates into less tax revenue coming in to
Ottawa.
The government has also set aside a $3-billion contingency for
unforeseen events. Several economists said this week that the
contingency reserve should be enough to maintain a small surplus, but
that it will be close.
Bank of Montreal chief economist Doug Porter told The Globe this week
that fluctuating oil prices amount to a "huge wild card" for finance
ministers that will make it very difficult to produce economic
forecasts.
"It looks like [Ottawa] might still be able to claw out a surplus if
absolutely everything went right from here, but we know better than to
expect everything to go right. So I think very much they're at risk of
remaining in deficit in the next fiscal year based on today's oil
prices," he said.
Economists generally say it makes little practical difference whether
or not Ottawa is in a small surplus or deficit, provided that long-term
trends are positive. However the Conservatives have made a balanced
budget by 2015-16 a key political pledge.
The 2011 Conservative election platform promised to eliminate the
deficit in 2014-15 – the current fiscal year. The government's fall
fiscal update indicated that that likely would have occurred if not for
the government's new policy measures, which include tax breaks for
small business and Canadian families with children under 18. The Prime
Minister has previously said Ottawa will post a deficit in 2014-15.
Mr. Harper said Tuesday that lower prices will have an impact on
revenue, but indicated it will not be enough to eliminate the surplus.
"The only question will be how much flexibility we have in the short
term. This will obviously reduce some of our fiscal flexibility but it
will not, by any means, stop us from reaching a balance and at the same
time, as you know, making the important investments we've made," he
said.
Unprompted, Mr. Harper then went on to note the impact of lower oil
prices on Russia.
"A you know, the fall of oil prices is having important effects around
the world. There are economies a lot more dependent on the oil price
than Canada's, or frankly than Alberta's, and one of them is Russia,"
he said. "I think we are all noticing the difficulties that are
emerging in Russia, partly because of falling oil prices, partly
because of poor governance of the economy and also partly because of
sanctions that have been imposed by us and by our allies and obviously
as these factors bite, we encourage Mr. Putin to respect the
sovereignty and territorial integrity of its neighbours and also to act
in a way that's less aggressive towards the international community."
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