Alberta is now debt-free, due in part to the high price of oil and gas.
"Today I'm very, very proud to announce that Alberta has slain its debt," Premier Ralph Klein said on Monday in Calgary.
"Never again will this government or the people of this province have to set aside another tax dollar on debt," Klein said.
"Those days are over and they're over for good, as far as my government is concerned, and if need be we will put in place legislation to make sure that we never have a debt again," he added.
The province eliminated its $3-billion debt by using a big surplus in this year's budget from high oil and gas revenues. In June, the province said its 2003-2004 budget surplus stood at $4 billion.
Ten years ago, Alberta's debt stood at $23 billion. Almost all of that debt was run up between 1982 and 1992, when oil prices crashed.
A rebound in prices, however, has led to big provincial surpluses since the mid-1990s.
The move makes Alberta the only province with no debt. The last province to say it was debt-free was British Columbia in the late 1960s.
A lone protester heckled Klein during his announcement by saying the government paid its debt on the backs of Albertans who are having a hard time making ends meet.
Klein said the provincial government plans to consult with residents on how to spend future surpluses.
A provincial election is expected to be called as early as the fall.