Finance Minister Iris Evans made an official announcement Wednesday to deliver the message that many Albertans already expected. The province is swimming in red ink and according to the government, lower natural gas prices are part of the problem.

"This is not a good news story for Alberta," Evans told the media Wednesday morning. "Because we are heavily dependent on our oil and gas figures there is no getting around it. These are the facts and the figures there is nothing we did to make that happen."

Evans released the province's 2009-10 first quarter fiscal update, which showed a deficit $2.2 billion higher than expected.

The province said the increase is due mainly because of weaker-than-forecast natural gas prices, and a higher Canadian dollar.

Alberta Premier Ed Stelmach told media Tuesday that Alberta's projected deficit is $6.9 billion for 2009-10, and Evans confirmed the figure.

"Global economic turmoil is deeper and more sustained and natural gas prices remain far lower than originally forecast, and the result is a higher deficit than we predicted," said Evans.

Evans said the government has a plan to deal with the debt, which includes keeping a close eye on government spending, and drawing $17 billion from Alberta's Sustainability Fund, which was created to protect the government's spending plans in cases where there is unexpected drop in revenue.

The Finance Minister also announced that job loss figures are worse than expected. Originally, the province first projected Alberta would see 15,000 jobs lost this year, but that number has climbed by 7,000. Evans predicts 22,000 more Albertans will by unemployed.

"We are as a province still affected by the unemployment statistics."

The positive news that came from Wednesday's announcement was the province's Heritage Fund has earned $732 million after losing $3 billion last year. That money will be put into general revenue.

The fiscal update does not include the $1.1 billion projected Alberta Health Services deficit, which will not be counted in government documents until next year.

Evans is now ordering provincial bureaucrats to find $430 million in savings. She predicts $2 billion will need to be trimmed by next year.