Prentice told the Calgary Chamber of Commerce on Friday that he expects the price of a barrel of oil to be between US$65 and US$75 for the rest of the year. It closed at US$66.15 a barrel on Friday — down about 10 per cent since Wednesday's close.
He said the government is going to have to find a way to cope with the lost revenue and make sure the budget remains sustainable.
"It involves a number of things. Certainly belt-tightening on the part of government and the containment of government expenditures," Prentice said after his speech.
"I have to be clear. As I've said before, to deal with the implications of not just $75 oil at this point, but sub-$75 oil, there will be consequences for all Albertans."
In the March budget, the province forecast West Texas Intermediate oil to average around US$92 a barrel. For the first six months of the year, it was higher than that, around US$100 a barrel.
But higher production in the U.S., coupled with instability in other oil producing regions, has sent the price plunging.
On Thursday, the Organization of Petroleum Exporting Countries said it would keep output at 30 million barrels a day rather than cut back and put a floor under prices, meaning there's not much to boost crude in the near term.
"It's clear from the OPEC meeting that there will continue to be efforts by OPEC to sustain production levels, to exert pressures both on their own membership and on others," said Prentice. "We're going to be in a low trough in the price cycle for some time."
Alberta has chronically struggled with oil prices affecting its budgets, delivering billion-dollar windfalls and shortfalls on short notice.
Prentice said Alberta can't just wait for high prices to return: there has to be a focus on cost-cutting while at the same time providing necessary cash for core services.
The premier told his business audience that the government will not be imposing a provincial sales tax and intends to maintain the province's low taxes.
"Alberta has a competitive tax regime. We have the lowest effective personal income taxes in the country. We have no sales tax. We have amongst the lowest corporate income taxes in the country," Prentice said. "We are committed to maintaining that competitive advantage."
The premier wouldn't say if there could be any changes to the tax system while maintaining its competitiveness.
Alberta NDP Leader Rachel Notley said it will be families who will pay the price for the government's failure to responsibly manage resource revenue.
The governing PC party claims it is a crisis every time oil prices drop, she said.
"Alberta has been riding this revenue roller coaster for years and yet Prentice announced today that the PCs are planning to cut public spending and that every Albertan will be impacted," said Notley.
"It's time we finally moved to a more fair, stable, predictable revenue system."
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