In 2008, Jeff Rubin, then chief economist at CIBC World Markets, predicted the price of oil would hit $225 a barrel by 2012.
But since then, there has been a flood of new supply from Texas and the Dakotas, flattening prices, Rubin said.
The sooner Alberta decreases its economic dependence on the oilsands, the better off the province will be, he said.
“Maybe it’s a time instead of relying on bitumen royalties to start taxing carbon for a change,” he said.
“I mean, you know, B.C. has a lower personal income tax rate than Alberta. Now true, you pay a lot more at the pump, but the whole idea of a carbon tax is to discourage you from using as much at the pump.”
Alberta already has one emissions-reduction levy — the Specified Gas Emitters Regulation (SGER) — which was introduced in 2007.
It requires facilities that emit more than 100,000 tonnes of greenhouse gases per year to cap their emissions intensity at 12 per cent below the average for 2003-2005, or pay a penalty for exceeding their targets of $15 for every tonne over the limit.
Growth forecast gloomy
Bank of Montreal chief economist Douglas Porter predicts Alberta's growth rate will be chopped in half in 2015 because of low oil prices, knocking the province off the podium as Canada's fastest growing economy.
“Alberta has by far and away led the country in growth rates in the last 10 years,” he said.
“But we see its growth rate going from about three and a half to maybe one and a half per cent in the year ahead, depending on where oil prices settle out.”
Porter says B.C, and Ontario will benefit because of the lower costs for the manufacturing sectors.
Just a blip?
However in his 2015 Alberta economic outlook released on Wednesday, ATB Financial chief economist Todd Hirsch predicts the price of oil to bounce back to about $75 a barrel by the end of the year.
He said a recession is unlikely and that this downturn is probably just a blip.
“Nonetheless, we are going to be in for a few months here, maybe the first half of the year, where it is going to feel a little bit rocky. I do think we are in for some layoffs in the province, already we've been seeing signs of that.”
Hirsch said smaller oil and gas producers will bear the brunt of the low prices.
If the price of oil is still below $50 in six months, there would be more reason for concern, he said.
In the meantime, Hirsch says low prices will help other industries, including forestry, tourism and agriculture.
He added that he does not expect any major changes in house prices.