Canada -

Low oil prices could halt Canadian tax cuts

Written by Joseph Nordqvist

Published: 02:43, October 16, 2014

The Canadian government will soon have to weigh the risks of declining oil prices before making large tax cuts.

Joe Oliver, Canada’s Finance Minister, has said that the government will not be breaking its tax-cutting promises despite the recent slump in oil prices. The government is expected to have a surplus in next year’s budget.

However, economists are saying that the finance minister will have to face the reality of the falling oil prices as it could have a big affect on the economy.

Oil has dropped to a two year low, which has already caused Canadian policy-makers to examine the potential affects.

Scott Clark, a former senior Finance Department bureaucrat and professor at Carleton University in Ottawa, said:

“The federal government revenues are extremely sensitive to what oil prices are doing,”

”If you listen to Mr. Oliver, he’s very optimistic — in fact, almost unbelievably optimistic — about the surplus going forward. He seems to be downplaying the impact of the oil prices, or that lower oil prices will continue.”

Mr. Oliver did acknowledge that low oil prices may stunt the country’s economic growth, he reiterated his pledge to offer tax relief to Canadians and have a balanced budget in the 2015 election year.

The Bank of Canada announced plans to measure the affects of cheaper oil in its next monetary policy report, which will be released next Wednesday.

Joseph Nordqvist Avatar

Other News

Fewer bidders can make public contracts harder for businesses and taxpayers

Oct 30, 2026

Small firms’ productivity gap is wider in manufacturing than services

Oct 30, 2026

Battery storage is expanding beyond emergency grid support

Oct 30, 2026

Hiring pressure persists in technical, health and teaching jobs, OECD finds

Oct 30, 2026

Small manufacturers face different costs in the shift to new supply chains

Oct 29, 2026

Crowded hedge fund trades can deepen market falls, IMF research finds

Oct 29, 2026

Electronic payments are linked to easier credit for small businesses

Oct 29, 2026

China’s carbon market may reward cleaner plants while increasing output

Oct 29, 2026

Groundwater pumping can create costs that arrive years later

Oct 29, 2026

Commodity shocks are spreading from energy to food and metals

Oct 28, 2026

Why training an AI replacement can create a dilemma for workers and employers

Oct 28, 2026

Why tariff changes can reach importers at different times

Oct 28, 2026

Large businesses are far more likely to use AI for cybersecurity

Oct 28, 2026

Plastic packaging recycling rose in the EU as waste generation also increased

Oct 28, 2026

Export controls work differently when trading partners act together

Oct 28, 2026

Online shoppers report late deliveries more often than other problems

Oct 28, 2026

Restaurant review alerts were linked to better ratings when staff acted on complaints

Oct 27, 2026

Foreign-controlled firms account for a small share of EU businesses but a larger share of jobs

Oct 27, 2026

Paid AI customers switch providers as new models appear

Oct 27, 2026

AI agent audits depend on records the agent cannot erase

Oct 27, 2026