* Agency says books may not balance for another year
* 2013-14 deficit could hit C$4 billion
* Redford has not yet ruled out deficit elimination
By Jeffrey Jones
CALGARY, Alberta, Jan 31 Moody's Investors
Service forecast something on Thursday that Alberta's premier
will not yet admit - that a projected C$6 billion ($6 billion)
shortfall in oil revenue will likely force the Canadian province
to miss its target of balancing the books this year.
Premier Alison Redford has said an unusually deep discount
on the price of heavy crude from Alberta's oil sands is forcing
her Progressive Conservative government to consider tough
cost-saving moves for its 2013-14 budget, due on March 7.
In a report on Thursday, Moody's, the influential
credit-rating agency, said Alberta's finances are becoming more
strained with the price spread between its Western Canada Select
heavy crude and U.S. benchmark West Texas Intermediate remaining
wide. Energy revenues make up nearly a third of the province's
"The projected continued decline in resource revenues and
the province's significant reliance on these revenues are credit
negative and will likely mean Alberta will need to extend its
time frame back to budget balance past 2013-14," Moody's analyst
Jennifer Wong wrote.
Alberta has already warned that its deficit for the current
fiscal year, ending March 31, could be triple the C$886 million
it forecast initially. Deeply discounted crude is blamed on a
combination of growing production, increasing competing supplies
in the United States and limited pipeline capacity.
Wong estimated that the drop in revenue, should the prices
for Canadian and U.S. crude stay at current levels, could mean a
deficit of C$4 billion for 2013-14.
In Toronto on Wednesday, Redford would not rule out the
prospect of balancing the books in the year to March 2014. But
she also said she will not impose new levies, such as a sales
tax, or reinstate health care premiums to boost revenues.
Ways currently being considered to save money are more
public-private partnerships as well as tapping debt markets to
build schools, roads and other infrastructure. "I'm not going to
foreshadow anything else right now," Redford said.
WCS crude sold for $58 a barrel in January, or about 62
percent of the WTI price on average. Moody's pointed out that
pipeline expansions planned for 2013 could help narrow the price
That could help put the province on track to balance its
books for the following fiscal year, the report said.