Premier Jim Prentice says he doesn’t agree with the assessment that the province is headed for a recession and that the government will have to be fiscally responsible in other ways to reduce the impact on the province’s budget from falling oil prices.

The Conference Board of Canada said Monday that Alberta is ‘most likely’ headed for a recession in 2015 as a result of lower oil prices.

On Monday, oil was down $2.29 and closed at US$46.07. Economists say the province will likely feel the pinch even though economic indicators like employment and new housing starts remain steady.

“The most likely outcome we think for Alberta this year is a recession,” said board chief economist Glen Hodgson.

Several Calgary-based energy companies have announced cuts to spending in the past few weeks and others are expected to follow.

Suncor announced on Tuesday afternoon that it would slash 1000 jobs and trim about $1B from its capital budget to counter the dip in oil prices.

Premier Jim Prentice spoke at an event hosted by Edmonton Economic Development on Tuesday and warned of a difficult and challenging year ahead but says a recession is not on the horizon.

“I don’t agree with the Conference Board of Canada. I didn’t find their analysis to be particularly cogent, to be frank, and the opinion they’ve put forward is an outlier amongst all of the other opinions that have been put forward by every one of Canada’s chartered banks and by other respected economic forecasters,” said the premier.

He says this is the most significant, public, financial circumstance seen in Alberta in a generation and that experts they consulted are saying it will impact the budget in the current fiscal year and for three years after that.

“Oil prices continue to slip. We haven’t evidently seen the bottom yet and this has opened up an enormous revenue shortfall, in terms of the Alberta Government’s budget. Quantified for next year as six to seven billion dollars, five billion dollars the year after that, five billion dollars the year after that if we don’t take action,” said Prentice. “so I don’t agree with the assessment of the conference board that Alberta faces a recession this year and certainly we intend to make measured, balanced fiscal choices that will continue to keep us in a positive growth mode."

He says current revenue projections leave a hole in the budget roughly the size of the entire government’s payroll.

“This is not about shaking down the salaries of the top sunshine list employees of the government of Alberta,” he said. “I could terminate the employment of every single employee of the government, leaving aside healthcare, and it would not fill a six-to-seven-billion-dollar revenue hole.”

Prentice says the province needs to rethink its current budgetary practices in the wake of evaporating oil revenues.

“We have not done a good job with our public finances. We have been living beyond our means,” Prentice said. “We can’t go on like this. We can’t continue to budget in this way.”

“In a sense, we are living on resource revenue that properly belongs to our children and our grandchildren,” he continued. “I guess at the end of the day, it’s about an honest discussion we have to have as Albertans.”

Resource companies say that the true impact of falling oil prices will be seen when the next drilling season gets underway in late summer.

(With files from ctvnews.ca)