January 15, 2013
Just the facts: Price differential nothing new
EDMONTON, AB (January 15, 2013): Premier Alison Redford and her PC government are misleading Albertans by pinning their own fiscal misfortunes on the current price differential for Alberta bitumen. After increasing operational spending by $2.4 billion dollars in the last budget and promising billions of new dollars during the election campaign, the PC “Alison Wonderland” budget has come crashing down to reality after overly optimistic revenue projections.
To this point, Premier Redford and her Finance Minister Doug Horner have blamed the budget woes on the discount price between Alberta bitumen and the price for benchmark West Texas Intermediate (WTI) crude. The reality is the warning signs of a price discount impacting the price of Alberta bitumen and the needs for new pipelines have long been in place. Here are the facts: March 2012 - As the budget was being debated in the Legislature in March before the election, the price differential was $31.20. April 2012 - During the spring election when the PCs promised billions of dollars new spending, the price differential was $32.94. May 2012-December 2012 - The WTI WCS spread after the budget improved with the average being $19.39. Source: http://www.baytex.ab.ca/files/pdf/Operations/Historical%20WCS%20Pricing_January%202013.pdf “Instead of being upfront and honest with Albertans, Redford played Russian roulette with our finances and we’re now on the losing end,” Wildrose Finance Critic Rob Anderson said. “She promised new spending, no deficits, no debt and no tax hikes but has opened the door wide open to breaking every single promise and is showing that she can no longer be trusted.”