Ottawa closely watching impact of sliding oil prices

OTTAWA — The federal government says it’s carefully monitoring the impact of sliding oil prices on public finances as it prepares to release its fall economic update.

Canada’s junior finance minister said Tuesday that even as tumbling energy prices eat away at tax revenues, the government still believes it can deliver a balanced budget next year.

“Any time there’s a dynamic like falling oil prices that we see happening right now globally, we monitor it very closely,’’ Kevin Sorenson said Tuesday in Ottawa. “The economic update will give us a little bit better indication as to where we are.’’

Sorenson’s remarks came as the Harper government plans how to introduce promised tax cuts amid economists’ concerns that low crude prices threaten to deplete Canada’s public coffers. The government is expected to release its fall fiscal update soon, although no date has been announced.

On Monday, the price of oil dipped below US$80 per barrel after a Goldman Sachs report predicted crude prices would fall to US$75 next year with expanding shale production and supplies exceeding demand.

Finance Minister Joe Oliver remained optimistic Tuesday despite the oilprice tumult, and said the Goldman Sachs prediction was “at the lower end of projections.’’

“Irrespective of the number, we’re comfortable that we’re going to achieve a budgetary surplus next year and we’ll be able to follow up on our commitment to reduce taxes,’’ Oliver told The Canadian Press.