Private-sector economists who submitted their prebudget forecasts to Ottawa this week say that with the past two months of steady oil prices there is no longer a need to delay the budget.
Private-sector forecasters had until Wednesday to submit their latest figures to the Department of Finance Canada for the coming federal budget and the results cement the view that slower growth and low oil prices are here to stay this year.
The tumbling price of oil was the main variable in the economy when Finance Minister Joe Oliver announced nearly two months ago that he would not introduce a budget before April. Since then, oil prices have levelled off around $50 (U.S.) a barrel and are not forecast to go much higher any time soon.
“I think the consensus is gelling on where the economy is headed this year, so I actually don’t see that much reason for further delay at this point,” said Doug Porter, chief economist for the Bank of Montreal. “While of course everyone’s crystal ball is a little bit murky these days, I think there is a fairly strong consensus on where things are headed in 2015.”
The federal government’s budget numbers are built on an average of forecasts from private-sector economists. The government usually makes adjustments to the numbers to account for future risks.
Normally, the department surveys economists once before delivering a budget in February or March. This year, the economists were surveyed a second time. Surveys are normally submitted a few weeks before the budget.
However, Mr. Oliver has remained coy as to his plans and has not ruled out waiting beyond April.
Just over 10 sitting weeks remain before the House is scheduled to rise for summer, which would effectively bring an end to the 41st Parliament, given that MPs are not expected to be back before the campaign officially begins ahead of the Oct. 19 federal election.
Opposition MPs are concerned that little parliamentary time will be left for MPs to review the budget and budget legislation before summer.
Mr. Oliver insisted Wednesday that the budget delay wouldn’t squeeze out time for opposition scrutiny.
“There’ll be plenty of time for parliamentary debate. That’s not a concern,” he said after the weekly closed-door meeting of the Conservative caucus.
Mr. Oliver also ruled out releasing a budget when Parliament is not sitting. Those signals leave the minister with a window of late April or early May.
While the private-sector forecasts were submitted in private, most of the economists post their key figures online. Also, Bloomberg conducts its own survey of economists, which provides a sense as to the average forecast the Finance Canada would have received.
The most recent private-sector forecasts make clear just how much things have changed since Nov. 12, when Mr. Oliver released is fall economic update. At that time, Finance Canada assumed the price of North American crude would average about $81 a barrel in 2015.
The fall fiscal update also projected real GDP growth of 2.6 per cent in 2015 and 2.4 per cent.
A new report to be released Thursday by RBC assumes an average price of $53 a barrel, which is 43 per cent lower than the average in 2014. The median of analyst estimates gathered by Bloomberg is $57.70 a barrel in 2015 and $71 in 2016.
As for economic growth, analysts surveyed by Bloomberg expect GDP growth of 2.1 per cent in 2015 and 2.3 per cent in 2016.
Avery Shenfeld, chief economist for CIBC World Markets, said that while the price of oil hasn’t moved, there is still uncertainty over the broader impact low prices will have on the economy. Nonetheless, he said Ottawa could always adjust its plans later in the year based on events.
“Relative to a month ago, there hasn’t been a material change in our forecast,” he said. “I think that delivering a budget in April would be as good a time as any.”Report Typo/Error