Albertans might have to get used to the idea of a deficit: Prentice

WATCH: As the province faces a multi-billion dollar hole in the budget, the premier says all options are on the table. Tom Vernon reports.

EDMONTON – Alberta premier Jim Prentice spent the day Monday meeting with his caucus to discuss the tough decisions ahead regarding capital projects.

The province is facing a multi-billion dollar hole in the budget, in large part thanks to the plummeting price of oil, and the premier says all options are on the table.

READ MORE: Falling oil prices will carve $11.2B from Alberta’s coffers over two years: Prentice 

The price of a barrel of oil is sitting around $55 and the premier says it’s going to hurt the bottom line and that every Albertan would feel the impact. In a year-end interview with Global News, Prentice said Albertans might have to get used to the idea of a deficit.

“We’re also looking at the extent to which we could use the contingency fund to soften the blow over a three-year period, we’re looking at the extent to which deficits should be run over the course of a couple of years to soften the blow, and we of course have to look at the revenue side,” said the premier.

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“I just emphasize and I’ve been very frank with Albertans about this,” he added.

“This is very serious circumstance, very serious.”

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“We’ll have to get our heads around all of that: the size of the hole Alberta has in its budget is such that we have to be careful that we don’t go too far, too fast because we can actually cause Alberta to experience a recession by moving too fast in terms of changing the way we do our finances.”

Prentice explained government will have to find that balance between cutting spending enough in light of less revenue and not cutting so much that it sparks a recession.

The revenue shortfall is already putting the brakes on a planned Calgary cancer treatment centre, approved by former premier Alison Redford in 2013.

WATCH: Prentice on current status of cancer centre, other capital projects 

Budget deliberations will continue over the Christmas break and into the New Year.  The new budget will be handed down late February or early March.

The year-end interview with Prentice will air on Global News province-side on January 1 at 6:30 p.m. and 11:30 p.m.

With files from Tom Vernon, Global News