Ottawa--Low oil prices could derail Canada's planned return to budget surplus in the fiscal year starting in April, an independent parliamentary officer said Tuesday.
In a report to lawmakers, Parliamentary Budget Officer Jean-Denis Frechette challenged Finance Minister Joe Oliver's promise, repeated a day earlier, to post the oil-producing nation's first surplus since the 2008 global financial crisis.
A return to the black is said to be crucial for the re-election of Prime Minister Stephen Harper's ruling Conservatives in October.
Frechette offered two scenarios in which the price of West Texas Intermediate oil per barrel remained at $48 or climbed from $51 to $81 over the next five years.
The impact on government coffers was projected to result in a Can$400 million (US$322 million) deficit in fiscal 2015 yo 2016 under the first scenario, or a Can$700 million (US$564 million) surplus if oil prices bounce back.
Oil prices plummeted over the past year from above $100 to $45 on Tuesday.
Oliver last November lowered his budget surplus forecast, citing falling oil prices and tax cuts.
In the fiscal update, Oliver predicted a deficit of Can$2.9 billion in 2014 to 2015, followed by a Can$1.9 billion surplus the following fiscal year.
The estimated surplus was Can$5 billion less than Oliver had forecast in the last budget in February 2014.
AFP
