Blame Oil: Opportunistic thinking amid the oil price collapse
The wisdom of Winston Churchill, who once quipped that you should never let a good crisis go to waste, clearly hasn’t been lost on federal Finance minister Joe Oliver, who’s already made considerable hay out of falling oil prices.
Mr. Oliver’s finance department won’t table a budget until April, due to the uncertainty created by lower crude prices, which have thrown the budgeting process into limbo—or at least that’s the claim. Even though commodity prices matter much more to the provinces, which are where oil and gas royalties accrue, Mr. Oliver knows a gift horse when he sees it. Ottawa’s oil price assumptions are hardly relevant enough to most federal revenue projections to necessitate such a delay, but so it goes. If eventually it turns out the promised budget surplus will turn into a deficit or provincial transfer payments will need to be cut, it’s safe to say that oil will be the first place Mr. Oliver looks when it comes time to assign blame.
Over at the Bank of Canada, the same type of opportunistic thinking is just as apparent. If lower oil prices can be used as a convenient reason to reshape fiscal policy, why shouldn’t monetary policy follow suit as well? After all, the Bank of Canada has had plenty to say about the country’s oil ambitions in recent years.
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