The Conference Board of Canada is less than upbeat about the effect of cheap oil on Canada.

The Board’s pessimistic report says the federal government’s coffers will take a 4.3-billion-dollar hit – because of the sharp drop in world oil prices.

Cheaper oil is expected to gobble up 5.2-billion dollars from provincial tax revenues – and  chop 4.5-billion from provincial royalties this year.

Most of the losses are expected to strike the oil-producing regions of Alberta, Saskatchewan and Newfoundland and Labrador.

The report came out as the federal and provincial governments try to grapple with the impact of falling oil prices – and how the drop could affect their bottom lines.

Tomorrow, the Bank of Canada is expected to produce its forecast on what the oil slump could mean for the Canadian and world economies – when it releases its latest monetary policy report.