Alberta faces tough budget in midst of hot economy

The Alberta government continues to warn people about a tough budget year, while at the same time talking about how the provinces economy is one of the strongest in the country, which risks sending mixed signals to the public, according to one economist.

"It is true there is a disconnect right now between what the economy is doing and what the provincial government is experiencing," said Todd Hirsch, senior economist with ATB Financial.

On Monday afternoon, Premier Alison Redford warned people to prepare for a tough budget, saying "we know as Albertans that we go through volatile times and this is certainly one of them."

That statement seems to conflict with the personal experiences of Albertans when many are seeing rising wages and more job opportunities, says Hirsch.

"Everything still has a bit of a boomtown feel going on," he said.

"And then to hear the provincial government say things are really, really going to be difficultthere is a disconnect."

The province's heavy reliance on the oil industryrevenuesis the reason why, Hirsch said.

With oil prices slumping in western Canada, resource companies are not seeing windfalls, and the province isnt receiving as much in royalties.

"The revenue side for the provincial government really is being crimped right at the moment but that is not really the case for most Albertans, who are still seeing good job opportunities and really good wages."

Opposition parties are warning that the budget shortfall will lead to painful cuts in the future.