BUSINESS

Oil Price Collapse Will Cost Feds $4.3 Billion, Provinces Nearly $10 Billion

01/20/2015 12:54 EST | Updated 03/22/2015 05:59 EDT
Svetl. Tebenkova via Getty Images
OTTAWA - A new report by the Conference Board of Canada is predicting the oil-price collapse to cut federal revenues by $4.3 billion this year.

The study also says lower crude prices will drain provincial income in 2015 — by nearly $10 billion.

The findings say the 40-per-cent slide in oil prices will chop $4.5 billion from provincial royalties — most of it coming from crude-producers Alberta, Saskatchewan and Newfoundland and Labrador.

Due to cheaper oil, the board also predicts provincial tax revenues to drop another $5.2 billion this year.

World oil prices have sunk below US$50 per barrel since tumbling from their perch above US$100 last summer.

The Conference Board says oil prices will likely start rising again and is projecting them to reach US$60 per barrel by the end of 2015 — with average of US$56 for the year.

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