Canada PoliticsB.C., Alberta and Saskatchewan gloomy as oil, resources tank
Governments of natural resourced based economies obviously do well when commodity prices are high, and struggle when prices tank.
That's the brutal reality currently facing governments in British Columbia and Alberta and to some extent, Saskatchewan.
On Wednesday, Alberta Finance Minister Doug Horner said poor access to markets, volatile oil prices and increased production in the United States will have a negative $6 billion effect on the province's 2013-14 budget.
"I'm very, very concerned about where those (oilsands) numbers are headed," he said. according to the Canadian Press.
[ Related: Alberta finance minister offers gloomy forecast for 2013 ]
"This is a situation that is actually affecting the Canadian GDP. It's that much of an impact on the Canadian economy."
Horner also hinted that the province will have to consider emergency austerity measures to make-up the difference and may have to break promises made in the 2012 election campaign.
Alberta isn't the only provinces facing difficulties from slumping commodity prices. In September, British Columbia's Finance Minister Mike De Jong announced that his province would not meet 2012-13 budget targets, partly because natural gas royalties were almost $250 million lower than expected.
According to the Globe and Mail, De Jong said that in order to meet the shortfall, his government would have to implement restraint measures "including a hiring freeze in the civil service, a wage freeze for non-union employees across the public sector, and a clampdown on government travel."
[ Related: B.C.'s debt rating downgraded by Moody's ]
Canada's other western province, Saskatchewan — the only province with a balanced budget — is also feeling the pinch. According to Reuters, falling resource prices means the province will only achieve a $12.4 million surplus in 2012-13 compared to a $95 million budget surplus projected in March.
It appears that the western Canada boom might be coming to an end — or at the very least, slowing down.
