"We've got some rocky water to go in the next 12 to 18 months," Horner said after filing the final results for the 2011-12 budget year.
"Those are some of the things we're going to be watching for as we move forward, given the European (debt crisis) and other issues around the globe."
The province has been running multibillion-dollar deficits since the global economic meltdown in 2008.
The 2011-12 budget was expected to run a $3.4-billion deficit. But that figure ended up being sharply reduced to $23 million, Horner said.
The change was due in large part to strong oil prices, along with higher fees and leases for private companies to drill for resources on Crown land.
The province originally estimated oil would average US$89 a barrel for the fiscal year that ended March 31. Instead, it came in at US$97 a barrel.
The province also took in $3.3 billion for the Crown leases — more than double what was expected.
Despite the much-smaller deficit, the province will still draw $3-billion from its rainy day Sustainability Fund for cash adjustments.
Horner said the budget did its job, given the province also had to meet the demands of 60,000 newcomers in 2011.
"We continue to build the schools, hospitals and roads needed for a growing province."
The relative good times of 2011 have so far been dampened in 2012.
The province has banked on oil prices of US$99 a barrel in the current fiscal year — and even that would still mean an $886-million deficit. Oil, however, has been sliding and is now hovering in the US$80 a barrel range
Horner said he's not panicking over the lower price. The government has many strengths, including the country's lowest unemployment rate, five per cent GDP growth and $7.5 billion in the Sustainability Fund, he suggested.
"There are bright spots that are out there that we need to balance (the bad news) with," said Horner. "That's why nobody should be jumping out of windows today based on $80 (a barrel) oil, because three months from now it could be back to $105."
NDP Leader Brian Mason said Premier Alison Redford's government is, once again, more lucky than good.
"I think the government has horseshoes in their pants," said Mason.
"In my view we continue to be too dependent on non-renewable resource revenue for program expenditures."
Mason said the government said should increase taxes on wealthier Albertans and increase royalty rates on oil producers to build up provincial savings.
"We should be building more for the future."
The Liberals have also called for tax increases for higher income earners.
The government has said it has no plans to boost its taxes, which are the lowest in Canada.
The Opposition Wildrose party and the Canadian Taxpayers Federation say the problem is not taxes, but spending. Operational expenses are set to top a record $41 billion this year for a population under four million.
Scott Hennig of the Canadian Taxpayers Federation said a government that can't balance the books with oil at $97 a barrel lacks the will to make hard decisions.
Taxpayers need look no further than the government's recent decision to boost the pay for top bureaucrats, he said.
"This is obviously a different place than where I work," said Hennig. "Where I work, if we're running deficits, people wouldn't be getting raises, that's for darn sure."
Wildrose finance critic Rob Anderson said earlier this week that the Tory government's "reckless financial mismanagement has Alberta staring at a combination of tax hikes, debt-financing and deep cuts."
The final revenue figure for 2011-12 came in at $39.2 billion with expenses of $39.3 billion.
Costs ended up $300 million higher than predicted because money was spent to battle wildfires and to help Slave Lake residents, who saw a third of their town torched by an out-of-control forest fire.
Bitumen royalties were $4.5 billion, almost 10 per cent higher than expected. Crude oil royalties reached $2.3 billion, almost 20 per cent higher than predicted at budget time.
Personal and corporate income taxes were $11.9 billion, about three per cent under the forecast.
Among departmental spending, health care continued to lead the way at $14.8 billion, which equated to 38 per cent of total government outlay.
The Heritage Savings Trust Fund stood at $16.1 billion at fiscal year-end after generating almost $800 million in investment income.
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