Already dealing with a $60-million deficit, the University of Alberta will have to operate with millions of dollars less than expected from the provincial government. The University's funding has been cut by $10-million.

"We had a strategy in place that would've managed the $60-million gap," said U of A Provost Carl Amrhein. "The surprise was the $10-million."

"I wouldn't understand why there would be a surprise," said Advanced Education and Technology Minister Doug Horner. "We did telegraph (it) earlier last year around the budget as well as a number of meetings that we've had. I'd also add we are still crunching numbers."

The U of A's Academic Staff Association fears the University may lay off staff or curtail enrolment. "The shortfall now is really going to exaggerate the problem that we already faced with the funding gap," said Walter Dixon, president of the Academic Staff Association.

The Students' Union is concerned about the cut too. "We're not particularly clear on the specifics at this point, said Zach Fentiman, Students' Union president. "But we're sure of one thing and that is it's a bad deal for students."

The University of Alberta's total provincial operating grant now sits at $569-million.

With files from CTV's Susan Amerongen