Economists have repeatedly warned Alberta’s politicians about gambling on oil prices. They didn’t listen and now, as oil prices are in free fall, they are about to pay the price.

Jason Kenney’s budget plans were supposed to bring Alberta back to a balanced budget. In large part, the United Conservative plan relied on oil royalties, which in turn rely on oil prices.

The 2020 budget was betting on oil prices, for WTI Crude, to remain around $58. Today, the price for WTI Crude is floating around $30.  

At these prices, Kenney’s dreams of a balanced budget become exactly that: a dream. Trevor Tombe, an Associate Professor at the University of Calgary, estimates that the Alberta government could be facing a massive deficit if prices don’t rebound.

With Russia and Saudi Arabia signaling a long price war and the coronavirus reaching pandemic levels, that possibility looks slim.

Kenney used the promise of a balanced budget to justify massive public spending cuts. Now, it appears all that was for nothing.

Demand paid sick leave and EI benefits for all workers during Coronavirus pandemic