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Kenney Prepared to Do Whatever It Takes to Counter Oil Price Crash for Alberta

Alberta Premier Jason Kenney says his government will do whatever it takes to rescue the province from an oil price collapse and he wants the federal government to step up as well.

“This is not just about Alberta. As Alberta goes, so goes the national economy,” Kenney said in Calgary on March 9, after markets closed with cratering oil prices threatening to drain billions of dollars from the provinces bottom line.

“Albertans, even in our times of economic trial, have been contributing $20 billion net to the rest of the federation through our federal taxes. Our ability to continue doing so is now at risk,” he said.

“Albertans have been good to the rest of Canada. Its time to see the rest of Canada return the favour.”

Kenney is to meet with Prime Minister Justin Trudeau on March 13 at the first ministers meeting in Ottawa.

He said hell be asking for a range of relief measures, including financial incentives to help create jobs in reclaiming orphan wells, changes to payroll taxes, and removal of a cap on fiscal stabilization transfers that would return about $2.6 billion to Alberta.

Kenney said his own United Conservative government will look at a range of choices that include borrowing money for more capital spending to boost jobs, a return to tax incentives to lure high−tech startups, and directly subsidizing a barrel of oil.

The premier is also striking an emergency panel to be headed up by economist Jack Mintz with the School of Public Policy at the University of Calgary.

“All options will be on the table. I repeat: all options will be on the table to do everything that we can within our capacity to help protect jobs and Albertans,” said Kenney.

Gut Punch

Albertas energy industry, already suffering from reduced demand due to the novel coronavirus, is taking a gut punch due to an all-out price war between Saudi Arabia and Russia.

The price for West Texas Intermediate crude fell to US$30 a barrel on March 9. Alberta has budgeted its oil revenue based on US$58 a barrel. Each $1 drop in price represents a cut of about $200 million from Albertas bottom line.

Kenney, saying now is not the time for partisan politics, said hell be reaching out to rival politicians, including Opposition NDP Leader Rachel Notley, for advice.

Notley, speaking at a news conference in Edmonton, said Kenney needs to withdraw his recently tabled budget and submit a new one that recognizes how free-falling oil prices are decimating revenues.

Notley said the low prices will conservatively send the projected deficit for 2020−21 to almost $11 billion from $6.8 billion.

She said Kenney has left Alberta vulnerable by slashing corporate income taxes last year and using wildly optimistic oil revenue projections in the budget.

She also said Kenney was wrong when his government dismantled tax incentives last fall designed to lure more diversified businesses, including high−tech companies, to Alberta.

“Premier Kenneys belief in his corporate [tax] handout has always been magical thinking, but today it has been exposed as pure fantasy,” said Notley.

“It would be profoundly irresponsible for the premier to press forward with this budget whRead More – Source

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