Canadian Finance Minister Bill Morneau claims the new federal budget will boost a reviving Alberta economy, even as he defended tax changes that have upset the oilpatch.
Speaking this week at a Calgary Chamber of Commerce lunch as part of his cross-country budget tour, Morneau said he believes Alberta is on the rebound after two years of recession spurred by low oil prices, reported the Calgary Herald.
“There is emerging evidence that the worst effects of the oil shock are fading,” he told the event.
But the federal budget drew fire from energy sector groups such as the Canadian Association of Petroleum Producers for tax changes.
Under the new budget, and beginning in 2018, drillers will lose some tax deductions for discovery wells and small oil and gas companies will no longer be able to reclassify development expenses as immediately deductible.
Morneau told reporters at a news conference earlier in the day that the tax changes were a necessary step as part of the government’s G20 commitment to “phase out fossil-fuel subsidies by 2024.”
Chamber of Commerce president Adam Legge said business welcomed the budget’s focus on competitiveness and innovation but want Ottawa to accelerate its timetable for returning to surplus budgets instead of living with potential decades of deficits.
“There is a long road back to balance,” he said.