OTTAWA - The federal government says it's closely monitoring the impact of slipping oil prices on public finances as it prepares to release its fall economic update.
Canada's junior finance minister says even as tumbling energy prices eat away at tax revenues, the government still believes it can deliver a balanced budget next year.
Kevin Sorenson says the government will also keep an eye on the oil and gas sector, as prices approach the threshold where it's no longer worthwhile for companies to develop the resources.
Sorenson says Ottawa will respond by helping to create jobs by continuing to encourage skill development.
Crude prices dipped below the US$80 level Monday after a Goldman Sachs report predicted oil prices will fall further into the next year as shale production grows and supply outstrips demand.
Bank economists have warned lower crude prices are likely to hurt the overall economic health of a country as dependent on oil production as Canada.
However, they say drivers will enjoy cheaper pump prices and believe the lower Canadian dollar could offset some of the losses by helping to encourage exports.
Finance Minister Joe Oliver has said Ottawa still plans to follow through on the Harper government's pledge to cut taxes for Canadians despite the steep drop in oil prices.
The government is expected to release its fall fiscal update soon.
