McQueen says spending on schools, health care and roads is still important, even though the province is facing economic challenges due to low oil prices.
She says money from a municipal sustainability program announced in 2007 has only partly been spent.
She says $6 billion of the $11.3 billion in the fund has gone to municipalities so far.
McQueen wasn't clear when the remaining $5 billion will be spent.
McQueen also outlined to the mayors how the government plans to make up $7 billion in revenue it expects to lose this year because of low oil prices.
She said internal savings will account for $2.3 billion, while increased revenue from other sources and money from the province's contingency fund will make up the rest.
“The budget will be a third, a third, a third because we have to make sure that we actually are not causing problems in the economy as well," McQueen told reporters after her address to the mayors Friday.
"That’s why we’re stretching it out. We’ll continue to invest in infrastructure, our schools, our health care, our roads. Those are all important while looking at finding internal savings.”
The mayors in turn gave McQueen a list of their ideas to help raise $2 billion in new revenue, including higher liquor, cigarette and gasoline taxes.
Others suggested bringing back health-care premiums.
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