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Surging oil prices are one of the factors that led to a better-than-expected<\/a> fiscal update from the federal government on Tuesday, but what the future holds for investment in the oil and gas sector remains unclear.<\/p>\n The industry is in a position to invest more, said ATB Financial chief economist Mark Parsons, but he said more detail will likely need to be seen about what will come of negotiations between the federal and Alberta governments, before there’s a major shift in investment.<\/p>\n Until then, Parsons said there will likely be a more cautious, wait-and-see approach toward oil and gas investment.<\/p>\n \u201cOil prices have spiked, industry sentiment has improved, but we don\u2019t expect large investments in growth capital, new projects until we get clarity on the MOU and whether we\u2019ll have additional pipeline capacity,\u201d said Parsons.<\/p>\n The federal and Alberta governments are still negotiating the details of a memorandum of understanding, or MOU, they signed in November. The two sides already missed the first set of deadlines<\/a>, included in the energy and climate deal, earlier this year.<\/p>\n WATCH | Drop in deficit reflected in new federal fiscal update: ‘We’re restoring fiscal discipline’ in spring economic update, Champagne says<\/p>\n Finance Minister Fran\u00e7ois-Philippe Champagne spoke to media before tabling the government’s spring economic update, which puts the 2025-26 deficit at $66.9 billion \u2014 $11.5 billion lower than its November figure. Champagne said Canadians want, ‘at a time where the world is undergoing unprecedented changes, that people at the helm would be fiscally prudent.’<\/p>\n In Tuesday\u2019s update, the federal government saw an $11.5-billion drop to the deficit compared to what it projected in the fall.\u00a0<\/p>\n While Parsons noted the deficit is still a large number, he said Prime Minister Mark Carney has identified the right problem to tackle by focusing on trying to attract new investment.<\/p>\n \u201cThe fiscal update has identified the right challenges confronting the Canadian economy. It\u2019s just all about execution,\u201d said Parsons.<\/p>\n \u201cBecause, so far, we haven\u2019t seen the needle move much on business investment; it\u2019s been flat over the last year. So we do need to see more progress on this front.\u201d<\/p>\n Parsons added that Canada\u2019s fiscal fortunes being elevated partly due to higher oil prices is a reminder of the strong role the country can play in securing global energy security amid economic anxiety<\/a> brought on by the U.S. and Israel-Iran war. <\/p>\n More skilled workers a benefit to Alberta, says economist<\/p>\n Charles St. Arnaud, chief economist at Servus Credit Union, said Tuesday\u2019s update is in line with what he expected, with Ottawa moving in a marginal but positive direction since the fall budget.<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/04\/1777429210_359_default.jpg\")
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