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Thursday, October 18, 2018
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Auditor general calls for long term financial forecasts as oil revenue decreases

EDMONTON, A.B. – Alberta’s auditor general says a long-term fiscal projection would help the province as it deals with oil price swings and a diminishing non-renewable resource.

In his farewell report, Merwan Saher says enormous oil revenues, such as have been enjoyed by Alberta in the past, can be a double-edged sword.

He says such petroleum windfalls can become easy substitutes for strong economic fundamentals in good times, leading to much bigger problems when the prices crash.

Saher says long-term forecasts looking decades down the road, such as used in Norway, help keep government spending on track as a constant reminder that oil resources will run out and that planning for a post-oil future is critical.

Alberta has been running multibillion-dollar deficits due to a prolonged slump in oil prices.

Saher says Alberta risks not capitalizing on its remaining oil and gas revenue if governments take a short-term view in future planning.

“I have no idea what the (government) plan is going out into the future,” Saher said Thursday.

“I think there’s a tendency generally, we’re human beings, that the future will take care of itself.

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“That is incredibly risky for a group of people to rely on.”

Finance Minister Joe Ceci, in a statement, said the report, “reinforces our position that we need to get off the oil and gas roller-coaster. Quality services should not depend on the price of oil.”

Ceci noted the current budget has a six-year plan to erase the budget deficit.

Political opponents, however, have said Ceci’s plan is based on questionable assumptions, including the construction of the Kinder Morgan oil pipeline expansion.

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Saher completes his eight-year term as auditor general at the end of the month.

He will be replaced by Doug Wylie, who becomes Alberta’s 11th auditor general.

(THE CANADIAN PRESS)

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