By PAUL VIEIRA
OTTAWA -- The widening spread between Alberta crude and
other international blends poses a risk to Canada's fiscal
outlook, Canadian Finance Minister Jim Flaherty said
"It is obviously a concern," Mr. Flaherty said at a press
conference following a speech in Ottawa. "The reality is that
Alberta crude is being sold at a very substantial discount. And
it affects our budgeting, because it affects the level" of tax
revenue that the federal government collects.
There has typically been a slight discount, of roughly $10
to $20/bbl, on the price of Western Canadian Select oil
compared to the benchmark West Texas Intermediate blend.
But that discount has widened to nearly $40, economists say,
and they warn it could balloon further due to pipeline capacity
constraints in Canada and the increasing supply of crude
produced in the US.
The government of Alberta has warned the lower price fetched
for its crude could reduce provincial tax revenue in the
current fiscal year by roughly 6 billion Canadian dollars
($6.02 billion), or the equivalent of what the province spends
annually on education.
Despite worries about commodity prices in Canada, Mr.
Flaherty said the federal government has implemented an
austerity program that will save taxpayers up to C$5.2 billion
a year in expenses.
As a result, his Conservative government remains "on track" to
hit its target of returning to a budget surplus some time in
2015, he said.
Dow Jones Newswires