01/13/2015 02:31 EST | Updated 03/15/2015 05:59 EDT

Jim Prentice says 'tough choices' needed to face financial crisis

Alberta will need to cut public spending and work towards a more diversified economy if it is going to weather the latest budget crisis, the premier told a business luncheon Tuesday.  

"This is going to be a very difficult year and challenging year," Prentice told the event, which was hosted by the Edmonton Economic Development Corporation. 

'Everything is on the table."

Plummeting oil prices has caused the province to reassess its financial future. Last week, he revealed that the province is forecast to end the year with a $500 million deficit, instead of the surplus originally expected. 

Now, the Conference Board of Canada says that the drop in oil may push Alberta into a recession.

Prentice said government forecasts that oil prices will remain around $62 dollars a barrel, which will mean a $6.2 billion hole in Alberta's budget. 

"This is not just about shaving down salaries," he said.

The premier argued the province has been too reliant on volatile oil revenues in the past. He said the government needs to take measures to make its income more stable.

"We cannot wait for high prices to return. I think it’s fair to say that everyone in this province has had enough. Enough of the rollercoasters.”

Prentice said he will begin consultations with the public with how to deal with the financial crunch.