"The truth is that the cracks in Alberta's fiscal foundations run deeper than is generally acknowledged," Prentice said in a speech to the Calgary Rotary Club.
"Yes, we have a revenue problem, but we also have a spending problem. It has been overlooked for too long."
Prentice has not revealed a specific date to deliver the next budget, which he has said will also include a 10-year plan to insulate the government's revenues and day-to-day spending against wild swings in oil prices.
He is forecasting a $7-billion hole in the coming fiscal year, given that oil prices have been cut in half from a high of more than US$100 a barrel last summer.
In recent weeks, Prentice and members of his cabinet have floated several ideas to raise revenue and cut spending, but have only committed to not increasing corporate taxes or raising oil royalties.
At this point, despite dire predictions about Alberta being plunged into a recession, Prentice believes the province's pristine credit rating is safe.
"I'm not worried about it in the sense that if we do what we are recommending, we will be fine. If we pursue another path which involves doing nothing, running up $7-billion deficits ... this province will lose its triple-A credit rating very quickly," he said.
"Bank analysts have told me that and I don't think there's any doubt about that.
"Nobody should be under any doubt that we've gone from the highest growth rate in Canada to somewhere near the bottom, so it's going to be a tougher year for all of us."
Prentice said Monday he is also looking to overhaul how the province bargains with public-sector workers and to review legislation that prevents civil servants from striking.
A working group is to come up with a collective bargaining approach that avoids lucrative, one-off settlements based on immediate pressures.
And a recent Supreme Court decision affirming the right to strike means Alberta needs to review a ban on public-sector walkouts that dates back to the Peter Lougheed era, he said.
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