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OTTAWA — The Bank of Canada’s latest read on the national economy is expected to explore a pressing question Wednesday: How much are low oil prices affecting the country’s bottom line?

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Canada’s oil capital has seen long-term busts before — and knows they can cause wounds in everything from property values and employment to government finances.





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The price of oil recently hit a two-and-a-half year low, a sharp fall that is prompting Canadian policy-makers and the corporate world alike to reflect on the potential risks of lower prices.

The central bank has indicated it would attempt to measure the impact of tumbling prices in its quarterly monetary policy report, scheduled for release on Wednesday.

The assessment will come at a crucial time.

Some economists have warned the federal government will have to weigh potential pitfalls of low oil prices before it makes final decisions on the tax cuts it aims to introduce before next year’s election.

The effect of low oil on the pace of extraction and investment is also on the minds of federal and provincial policy-makers, since important portions of the Canadian economy are connected to activity in the oil patch.



Economists like Jimmy Jean of Desjardins Economic Studies expect the bank’s take on the pros and cons of low oil prices to be a one of the most-closely examined elements in Wednesday’s report.