| CALGARY, Alberta
CALGARY, Alberta Nov 28 The government of
Alberta, Canada's largest crude-producing province, said on
Monday its 2016-17 budget deficit would be marginally narrower
than previously forecast amid signs its economy is steadying
after more than two years of weak oil prices.
The shortfall is now expected to be C$10.8 billion ($8.1
billion) the province said in a second-quarter fiscal update,
slightly less than the C$10.9 billion gap forecast in August.
However, that is still C$449 million higher than the C$10.4
billion deficit originally forecast in the 2016-17 budget
released in April.
"While it's too soon to say Alberta's economy turned a
corner, there are some hopeful signs that it's stabilizing,"
Finance Minister Joe Ceci said.
Alberta is home to Canada's vast oil sands and is the No. 1
exporter of crude to the United States. It has been hard hit by
the collapse in global crude prices since mid-2014, as producers
laid off tens of thousands of oil and gas workers and cut
billions in capital spending.
The province's economy is forecast to shrink 2.8 percent in
2016, more than the 1.4 percent estimated in the April budget,
due to a massive wildfire in the Fort McMurray region in May
that shut down millions of barrels of oil sands production.
The New Democratic Party government expects a recovery to
start in 2017 with 2.3 percent growth in gross domestic product,
driven by wildfire reconstruction, a rebound in oil production,
public sector infrastructure investments and a modest pick up in
Alberta is assuming a U.S. crude price of $45 a barrel for
2016, unchanged from its August fiscal update but $3 higher than
the April budget forecast.
The government said positive signs for the economy included
the addition of 25,000 jobs in the last three months, of which
18,000 were in the mining, oil and gas sector. In addition,
manufacturing shipments have increased in recent months, while
the value of exports has been rising since April.
Drilling activity in the oil patch is also picking up.
Alberta expects energy investment expected to total C$30
billion in 2016, half of what it was in 2014 when oil prices
first started to slump. Capital spending in the energy sector is
forecast to remain flat next year.
($1 = 1.3400 Canadian dollars)
(Reporting by Nia Williams; Editing by Alan Crosby)