Another way to avoid these budget shortfalls, start hedging:
http://www.reuters.com/article/2013/...0AYHVI20130129
Quote:
CALGARY, Alberta, Jan 29 (Reuters) - A prominent economist recommended on Monday that Canada's provinces consider hedging their exposure to volatile energy prices, less than a week after Alberta's premier warned of a C$6 billion ($5.98 billion) budget shortfall because of deeply discounted Canadian oil prices.
Avery Shenfeld, chief economist at CIBC World Markets, said Canada's provinces should consider locking in oil prices to provide some certainty to budgets that can be thrown out of whack by commodity swings.
"Provincial finance ministers are now acutely aware that a bountiful surplus can turn into a gaping deficit in a hurry when commodity prices slip," Shenfeld wrote in a research report.
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