Oil prices, pipelines and Jason Kenney’s impeccable timing GlobeDebate
Mr. Kenney plans to move the province’s low taxes even lower – slashing the corporate tax rate by a third, to the lowest in Canada, and repealing the previous government’s carbon tax. Once fully in place, those measures will cut provincial revenues by about $3-billion annually, thereby growing the deficit. Mr. Kenney, however, has pledged to eliminate the deficit by 2022-23, by freezing program spending.
Mr. Kenney’s UCP platform projected a 24-per-cent revenue gain over his party’s four years in office to $62-billion from $50-billion. And that was on a modest forecast for oil prices. Higher prices promise a big upside: each time West Texas Intermediate climbs US$4 a barrel, it adds $1-billion to the Alberta treasury.
Mr. Kenney is right that Trans Mountain must be built. If and when it gets the go ahead, he’ll have had very little to do with it – but he’ll be perfectly positioned to declare victory. Meanwhile, Alberta’s unemployment rate, which topped 9 per cent in 2016, is expected to continue slowly improving. The Royal Bank of Canada estimates that it will stay around the current rate of seven per cent this year and fall to 6.5 per cent next year. And after another year of middling GDP growth in 2019, RBC predicts Alberta’s economy will lead the country in 2020.
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