One step forward then another back for embattled Ceci
Conference Board projects growth at 3.3% just as credit rating takes a hit
Alberta Finance Minister Joe Ceci is so used to responding to bad news about the economy that he was visibly surprised Monday to get a question about good news.
A report from the Conference Board of Canada raised growth projections in Alberta to a dizzying 3.3 per cent GDP growth, up from 2.8 per cent.
Ceci said the report shows jobs and confidence are returning, but it comes fast on the heels of Friday’s credit downgrade. S&P Global Ratings lowered Alberta’s rating from AA to A+, calling for spending cuts and tax increases.
It’s a familiar dynamic for Ceci, who found himself in charge of Alberta’s finances right about the time oil prices were crashing through the floor. Good economic news tends to be followed by bad.
In the last year, oil prices have slowly recovered and a production cut by major oil producers resulted in a small boost, but production from other competitors has kept the champagne bottles corked in the finance department.
In February, Ceci announced that revenues were about $1.5 billion higher than budget predictions, but his celebrations were muted by soaring expenditures, including a one-time payment of $1.1 billion related to the phase-out of coal plants.
The one-time payment — rather than making smaller payments over the next 14 years — was recommended by the auditor general, robbing Ceci of the chance to take a small swing at the deficit.
Although the broader economic picture is looking rosier, one possible threat is continued low oil prices. The government forecast oil at $55 per barrel in 2017-18 and West Texas Intermediate oil currently sits at about $50. Each dollar below the forecast costs the government about $310 million.
Ceci said the government’s forecast is based on the most conservative private sector forecasts.
“There’s 10 more months for us to see recovery and I’m confident it will,” said Ceci.