Low oil prices could impact federal governments promise of a balanced budget
Posted January 13, 2015 7:50 pm.
This article is more than 5 years old.
VANCOUVER (NEWS1130) – A forecast from TD is putting some shade over the Conservative’s promise of a balanced budget this year.
A political scientist says the ruling party has some hard choices to make.
Low oil prices could turn the federal government’s promised 2015-16 surplus into a deficit, according to the TD Bank. It predicts a $2.3-billion shortfall in the coming budget year and 0.6 of a billion the year after. Ottawa could still post small surpluses because the budget has built-in cushions of $3 billion a year.
Conservatives promised both a balanced budget in 2015 and several tax cuts, including the increase in the universal childcare benefit. The problem is many of the tax incentives have been confirmed in splashy announcements.
Head of the political science department at UBC Allan Tupper says voters may understand if the Tories can explain it well. “It might take another year or two to get back into full balance. So they have some capacity to say look, the world has changed and we’re going to be knocked off a bit.”
But he says it could mean some lean times ahead if the Conservatives are re-elected this year. “They’re going to have to make some judgments about what they’re going to do with regard to new programs, with regard to the better funding of existing ones and with regard to how much money they think they can forgo with further tax cuts.”
An election is scheduled for the fall, but there is speculation the Conservatives will pull the trigger this spring.
