The Province says global market uncertainty is impacting Alberta's fiscal picture, but that the government is taking action to control in-year spending.
"We're going to go through every penny this government spends to ensure Albertans are getting the value they need," said President of Treasury Board and Finance Minister Doug Horner.
In a news release, the province credits the drop to ongoing market volatility and lower than expected revenues.
Revenue decreased by $400 million in first quarter because of lower bitumen royalties, lower conventional oil royalties and lower Crown land lease sales. Expenses increased by $5 million due to disaster funding. Based on the results so far this year, Alberta could see a deficit of between $2.3 billion to $3 billion.
"My mandate is to deliver a balanced budget by 2013-14 and I will deliver on that mandate. Albertans have clear expectations that we live within our means so departments will manage with the budget they were allocated," said Horner.
The government plans on reviewing capital projects and looking for efficiencies. There is also a message for teachers and doctors, both of which are currently in negotiations with the province.
"We are tightening our belts, we would expect all others to do the same," said Horner.
It's a message the opposition calls opportunistic.
"They run on one thing, after the election they start their rounds of cuts, and it's callous and it's dishonest and I don't think that's what Albertans voted for," said NDP MLA David Eggen.
"The bubble has officially burst on the alice in wonderland budget. This government's inflated budget projections are now exposed for exactly what they were- a pre-election scheme," adds Wildrose MLA Kerry Towle.
Scott Hennig with the Canadian Taxpayers Federation says he's upset because no concrete projections were given in the Province's update.
"This is one of the most disrespectful things I've ever seen a government do. This is not open, it's not transparent. This is a brochure instead of a quarterly budget update because they don't want to show the numbers, because the numbers are not looking good."
The province says, going forward in 2012-13, it will cap overall operating spending, increase in-year savings to at least half a billion, review capital spending and respond to emergent needs as necessary.
With files from Vassy Kapelos.
© Global News. A division of Shaw Media Inc., 2013.