Canada reacting to oil downturn

MONTREAL, June 24 (UPI) -- As the economy stumbles under the pressure of low crude oil prices, Canadian Prime Minister Justin Trudeau said he was working to build a vibrant middle class.

The Trudeau administration said it recognized the struggles for a middle class coping with economic contraction brought on in part by lower crude oil prices, which despite recent stability are still down more than $50 per barrel from two years ago. A new budget program includes child tax benefits the government said could put another $1,800 per year in the pockets of the middle class.

The provincial economy in Alberta is feeling most of the strains from lower crude oil prices. Fires there in May, meanwhile, cut about 1 million barrels per day amid widespread evacuation orders.

With crude oil prices on pace to remain well below the peak levels from two years ago, the provincial government said it may take until the next decade to balance the provincial budget. The government now estimates revenue from non-renewable resources will be at its lowest level in 40 years.

Trudeau said the new economic package would put more money in the right hands.

"This is about putting money in the pockets of families who need it most, investing in our future, and helping the Canadian economy grow for the benefit of all," he said in a statement.

An annual report from the Canadian Association of Petroleum Producers found heavier oil like that found in Alberta will yield about 3.9 million bpd by 2030, about 7.5 percent less than forecast last year. Even for conventional oil production in the western part of the country, a short-term 15 percent decline is expected by 2018.

Bank of Canada Gov. Stephen Poloz said last week there were other sectors of the Canadian economy bubbling up as the oil economy shrinks.

"Several categories are encouraging," he said. "Many export sectors are operating near their capacity limits, which augurs well for future investment and job creation."