Oil price impact not devastating: Canada finance minister

While the drop in oil prices has affected the Canadian economy, it hasn't had a devastating impact, Canada's finance minister, Joe Oliver, said Wednesday.

Energy represents about 19 percent of the Canadian economy and 1.8 million jobs.

"Because we have a diversified economy, it isn't a devastating impact but it certainly made my budget more challenging when I attempted and succeeded in balancing it," Oliver said in an interview with "Power Lunch."

While the collapse in prices impacted the country's fiscal framework because it is an energy exporter, there were also some positive effects, he added.

"It reduces the cost of gasoline at the pump, which is good for consumers for savings, and it helps manufacturing companies and the transport sector because it reduces the cost of energy," he noted.

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Canadian oil and tar sands companies, on the other hand, felt some pain.

"There's no question that it has impacted a number of rigs and employment in that sector, but it's bounced off the bottom," said Oliver.

That said, he wouldn't make any predictions on where the price of oil is headed. The forecast in the Canadian budget is $54 per barrel, which is based on the average forecast of 15 private sector economists, he said.

"What people will tell you is that the solution to low oil prices are low oil prices because it drives out the marginal producer, which of course is the Saudi objective, and it means that demand increases because the cost of energy is down," Oliver said.

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Meanwhile, the rapid decline of oil, which went from above $100 a barrel into the $40s, caught him off guard.

"When you look back, in a sense it's surprising that I didn't see any forecasts to that effect," Oliver said.

Oil is up from its lows in March. On Wednesday, U.S. crude settled down 25 cents at $60.50 a barrel. Brent was last down 36 cents at $66.50 per barrel.