EDMONTON - Alberta is bleeding red ink at a rate never before seen in the province's history as the result of plummeting energy revenues.

A Finance Department spokesman has confirmed that the deficit for the current fiscal year may end up increasing by $2 billion because of low natural gas prices.

Premier Ed Stelmach's Progressive Conservative government was already projecting a record deficit of $4.7 billion, but this number is proving to be overly optimistic.

Finance officials are now conceding that the new deficit projection will likely be in the $6.5 billion to $7 billion range unless gas prices increase dramatically.

Treasury Board President Lloyd Snelgrove has been meeting privately with unions, business groups and others to provide a warning of the impact of this financial crisis.

Snelgrove cautioned months ago that government job cuts and tax increase could be in the works as he tries to cut $2 billion from the annual budget, but these cuts wouldn't take effect until next year.