The provincial deficit is expected to almost triple this year, from nearly $7 billion to almost $20 billion, due to the impacts of COVID-19 and the oil price collapse.
In a televised address to Albertans delivered on Monday, Alberta Premier Jason Kenney said the deficit is expected to triple due to the triple threat of the global recession, the collapse of energy prices and the COVID-19 pandemic.
Once the pandemic wraps up, Kenney said the economy will take a while to recover because of the crash of energy prices.
“I cannot overstate how grave the implications of this will be for jobs, the economy, and the financial security of Albertans,” Kenney said.
“We will face a great fiscal reckoning in the future.”
At the time of Kenney's address, WTI crude prices were sitting at less than $25, less than half the price the UCP built the 2020-21 Alberta budget on.
Western Canadian Select is currently sitting at $3 per barrel and there is a real possibility that Alberta energy prices will hit negative prices. Kenney said this is due to the COVID-19 recession, but it has been made worse by the price war led by Saudi Arabia and Russia, who are attempting to permanently damage North Americas oil industry.
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Kenney said the province is in discussion with U.S. leaders about a co-ordinated defence of North American energy independence and the province has made investments in Keystone XL. The measures will help the province take control of it’s economic destiny.
The province has also put together an Economic Recovery Council and has committed $12 billion to a COVID-19 action plan to help families and employers during this difficult time.
The premier said the province is not facing just one crisis, but rather three.
Alberta is battling a pandemic, which is the greatest threat to public health in a century; a shutdown of the local and global economy, which has led to a deep global recession; and a collapse of global energy prices, which threatens the province's largest industry.
Kenney said this crisis comes after five years of difficult economic times in the province.
Kenney said it is important to save both lives and livelihoods, but the first priority is the health of Albertans.
“At the same time, the huge damage to our economy – to livelihoods – is also having a real impact on the health and well-being of Albertans,” Kenney said.
“We cannot focus on either the pandemic or the economy. The two are intertwined.”
The premier said the province must do everything in its power to defeat COVID-19 and the faster the pandemic is stopped, the faster the economy can restart and there can be a path to recovery.
