Tumbling oil prices are forcing Alberta to dip into its reserve fund to keep its $10.5-billion deficit from sliding further into the red.
Finance Minister Joe Ceci says in his first-quarter fiscal update that the province had expected the benchmark oil price to average out at US$55 a barrel this year.
Instead, it’s hovering below $49 a barrel and isn’t expected to rise much in the near term.
Ceci says the province will use half of its $500-million contingency fund to keep this year’s deficit from growing.
Numbers reveal that lower-than-expected oil prices are expected to add $291 million to the Alberta deficit by the end of the 2017-18 fiscal year next spring.
The big hit comes from oilsands royalties _ the province had hoped to bring in $2.5 billion this year, but now expects to take in $563 million less.
