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Varcoe: 'We're not going to panic' — Alberta's deficit deepens to $6.5B as oil prices sag, revenues fall

One year ago, the province recorded an $8.3-billion surplus on the strength of higher-than-expected oil prices, strong population growth and a surging economy.

The see-saw effect of lower oil prices and a higher loonie is denting the bottom line of Alberta’s budget this year.

It’s also causing another case of budget whiplash, courtesy of Alberta’s royalty roller-coaster picking up speed.

Varcoe: 'We're not going to panic' — Alberta's deficit deepens to $6.5B as oil prices sag, revenues fall Back to video

In the government’s first-quarter financial update released Thursday, the province reported a sizable drop in resource revenue. The deficit is now projected to grow by $1.3 billion since the spring budget to $6.5 billion for the current fiscal year.

If that occurs, Albertans will have seen a nearly $14.8-billion financial swing between last year’s hefty surplus of $8.3 billion and this year’s expected red ink.

“I don’t think Albertans should panic, because we’re not going to panic. We’ve seen substantial surpluses. We’re in a deficit position now. There are a few things globally that aren’t going our way, but we’re leading the country in economic growth,” Finance Minister Nate Horner said in an interview.

“We are going to look under every rock and make sure we aren’t a spending outlier everywhere, and protect government services.”

Total spending during the April-to-June period was slightly higher than forecast in the budget, while a $1.4-billion drop in resource revenue is now expected.

Oil prices have declined this year because of........

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