With a larger-than-forecast deficit, the province has decided it’s time to trim some fat.

The record $6.9-billion deficit shown in the 2009-10 first-quarter fiscal update is $2.2 billion higher than what was forecasted in the 2009 budget and is attributed mostly to weaker-than-forecast natural gas prices, a higher Canadian dollar and other declining revenue.

“We have charged each department to look internally at those kinds of things that can help with that adjustment,” said Finance Minister Iris Evans.

The government has instituted a hiring freeze and is cutting discretionary and low-priority spending, but will hold off on giving specific details of each department’s cost savings until the second-quarter update.

Evans said the government would rely heavily on the $17-billion Sustainability Fund to offset the deficit.

“We expect a stronger recovery next year,” Evans added.

Scott Hennig, Alberta director of the Canadian Taxpayers Federation, isn’t so sure the emergency fund will last.

“You have $17 billion, minus $7 billion for the deficit, (and) they’ve already spent $5 billion of it, (so) there’s only $5 billion left for the two fiscal years after this. That is a razor-thin margin.”