Indira Samarasekera told students and faculty on Friday that $67 million in cuts are a "very serious threat to our quality."
She said staff reductions have already begun and across the board cuts which were originally to be 1 1/2 per cent, have been upped to three per cent.
Samarasekera said travel will be greatly reduced, except for recruitment, sports or anything that can be revenue generating.
As well, many senior administrators are voluntarily taking a five-day leave, equivalent to a nearly two per cent cut in wages.
Enterprise and Advanced Education Minister Thomas Lukaszuk sent a letter to all 26 post-secondary boards, asking for three year's worth of salary freezes.
Samarasekera told the crowd she's disappointed the letter was made public before she had time to discuss it with staff.
She also confirmed that all collective agreements that have roughly two years to go will be honoured.
"We simply can't offset the impact of a $67 million budget change in one year," Samarasekera said.
"We are going to have a very significant deficit for all of these cuts."
She said in three years the budget will be balanced.
The Alberta government slashed $147 million in funding to all post-secondary institutions in its budget last month.
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