Fresh off of the release of the MacKinnon report this week on the province's fiscal state, Alberta Finance Minister Travis Toews is warning of spending cuts to come.

Toews spoke to the Calgary Chamber of Commerce over the noon hour on Wednesday.

He said when he presents a new provincial budget next month he will present a plan for balancing Alberta's books.

But because this fiscal year is already well underway, Toews said that the second and third years of the UCP government's mandate will see what he calls "transformative changes."

The government released the report by the blue-ribbon panel, chaired by former Saskatchewan finance minister Janice MacKinnon, on Tuesday.

The panel concluded Alberta has a spending problem and that the government should take steps to get its fiscal house in order.

The recommendations included legislating salaries for public sector employees, allowing privately-run health clinics to perform day procedures and to end the freeze on tuition fees at post-secondary institutions.

As part of its work, the panel concluded Alberta's expenditures would drop by more than $10 billion a year if it simply matched the average per capita spending in B.C., Ontario and Quebec.

We can no longer spend like we're the rich kid on the block because quite frankly, we're not anymore. -Finance Minister Travis Toews

Toews told the chamber audience that Alberta's rate of spending is no longer sustainable as it is racking up debt which will cost more and more to service.

"Folks, we can no longer afford to spend at that rate. We can no longer spend like we're the rich kid on the block because quite frankly, we're not anymore."

To balance the provincial budget by 2022-23, the panel recommends that the government cut its spending by at least $600 million.

In speaking with reporters after his speech, Toews noted that he cannot ignore the possibility of outside events which could affect the province's finances in coming years.

More than $600 million

For that reason, he's planning to build in a contingencies to prevent the government's return to balance plan from being blown off track.

"We're going to need to reduce spending to give us that contingency amount," said Toews.

"My expectation is it's going to have to be more than $600 million."

Calgary NDP MLA Irfan Sabir took in the minister's speech.

He said Albertans will be affected by large-scale spending cuts by the UCP government.

"I think it's a recipe for a disaster," said Sabir.

"We are heading down a path that will hurt Albertans, everyday Albertans and their policies are only benefiting their donors, their friends."

The president of the Calgary Chamber of Commerce, Sandip Lalli, said there is value in dealing with the province's fiscal state.

She said the government has already sent a strong signal to business by reducing taxes.

But she said future confidence in Alberta depends on the government getting its finances in order.

"We need to have a strong fiscal house so that then the temptation to raise taxes again is eliminated."

The UCP plans to table its first budget in October.