Provinces should up their take at the pumps to combat falling oil

by News Staff Posted Jan 6, 2015 12:03 pm MDT Drivers might be loving the lower cost to fill up the car, but with oil prices dipping below $50US a barrel this week, at least one economist thinks it might be time for provincial governments to get in on the windfall. While Alberta Premier Jim Prentice has said no to a GST or HST, Doug Porter, chief economist with BMO, said a gas tax should be on the table. “Definitely for the provinces that are facing a revenue shortfall, or even a long term fiscal challenge, and I’m thinking Ontario, it might be an opportune time to seriously consider hiking gas taxes”, Porter said. Porter tells 660News, the tax would combat Alberta’s oil revenue loss, expected to be in the billions. While Canada’s economic growth is expected to fall slightly for 2015, Porter said Alberta’s growth rate will likely be chopped in half to fewer than two per cent.He said he could easily see things getting right back on track in 2016 but everything hinges on those dropping oil prices. The financial forecaster is still basing his assessments on a $60 US a barrel estimate with the assumption that oil prices make a bit of a recovery in the second half of the year.“If we’re wrong, and oil prices hang around current levels, then I’d be forced to take another axe to that outlook in Alberta.” He said in some ways, this is a return to average, after four very good years. “Usually [Alberta’s] problems last about a year and then it comes bouncing back. It actually is remarkable how Alberta has so consistently outperformed the national average for decades and decades.”Porter said the nation is watching as Alberta is a wildcard in Canada’s economy. Provinces should up their take at the pumps to combat falling oil: BMO Chief Economist AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email read more

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