The Alberta government is "heading for trouble" with its latest plan for record spending announced in the provincial budget earlier in the day, critics said Tuesday.

The $37-billion budget includes the elimination of health-care premiums, a 9.7 per cent increase in program spending, and a three-year, $22.2-billion construction program for roads, schools and health-care facilities.

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Finance Minister Iris Evans says the government will look at a new plan for saving more of its energy revenues sometime in the next year. ((CBC))

Only $279 million is to be socked away in savings, a far cry from the $3 billion to $4 billion groups such as the Alberta Chambers of Commerce have been advocating.

"The provincial government is going to hit the wall," said Ken Kobly, president and CEO of the group.

"We are going to have a razor thin surplus next year ... and you don't need to have too many "OOPS's" to throw you into a deficit position."

Scott Hennig, the Alberta director of the Canadian Taxpayers Federation, agreed it's time for the government to start planning for a time when energy revenues dry up.

"They'll have no choice essentially to raise taxes or cut spending or dip into savings or go back into debt.  I mean those are just four horrible options that this government's going to have to look at if prices drop."

Alberta Liberal Leader Kevin Taft also sounded the alarm bell.

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Treasury Board President Lloyd Snelgrove says he's not sure Albertans are ready for the government to spend less and save more. ((CBC))

"We're spending our wealth as fast as it comes out of the ground and we all know if we live in Alberta that's not going to keep us through the long term," said Taft.

"That's why I think it's so important to build up the Heritage Fund and there's no plan for that."

The Alberta Heritage Trust Fund was started more than 30 years ago by then-premier Peter Lougheed during a period of high oil prices, and was supposed to grow into an account that would help fund government programs when energy revenues ran out.

Subsequent governments have not made significant contributions and the fund will grow only to about $17 billion by the end of the fiscal year.

Finance minister committed to saving in future

"We know its prudent to save for outgoing years," said Finance Minister Iris Evans Tuesday.

She is promising to look at a plan for saving over the next year and include it in the 2009 budget.

The government recently commissioned a study on a possible new saving plan, headed by Jack Mintz, the chair of the School of Policy Studies at the University of Calgary.

The government is not ready to release that report yet, said Evans earlier this week.

But Treasury Board President Lloyd Snelgrove questioned whether Albertans are ready to accept a cut in government spending.

"None of the universities, none of the hospitals, none of the school boards, none of the towns and counties and cities have said to us: Take some money back from us and put in the bank — we have no more need for it."