But Krawetz says it's not the doom and gloom scenario painted by the Opposition NDP.
Krawetz says the mid-year budget update coming next week will show the decline in non-renewable resource money is being offset by other revenue, like taxes.
He says the update will also show that the budget is still balanced and has a surplus.
The government said in its first-quarter financial report in August that finances took a hit from a drop in oil revenue and Crown land sales, and that it was looking to reduce spending by about $55 million.
Krawetz says that's been done by ministries looking for savings, but no programs have been cut.