Premier Danielle Smith’s government will declare a $367-million budget surplus in a province where “deficit” may as well be a four-letter word. But if the actual oil price is just $1 US per barrel below what provincial economists forecast, that becomes a $263 million deficit.
Or let’s say the budget’s projection of $74 US per barrel overestimates the yearly average by $2.50 US per barrel, the rough amount by which officials overshot the price last year.
Hello, $1.2-billion deficit — and then an extra $630 million in red ink for every dollar the price drops below forecast.
That only begins to describe the razor’s edge
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