The provincial government in Alberta said its budgetary house is in order enough to handle the pressures from low oil prices despite a credit downgrade.

"Around the world, companies and governments engaged in petroleum production are facing ratings downgrades," Joe Ceci, the provincial finance minister said in a statement. "In Alberta, we are in a better position than most to manage these pressures, while we work to make Alberta less vulnerable to selling one commodity at one price."

Moody's Investors Service lowered the provincial credit rating from Aaa to Aa1, adding it was maintaining a negative outlook. The debt burden for Alberta is "unconstrained" and the outlook for growth is subdued, the ratings agency said.

With crude oil prices on pace to remain well below the peak levels from two years ago, Ceci said it may take until the next decade to balance the provincial budget. The government now estimates revenue from non-renewable resources will be at its lowest level in 40 years.

Moody's said the latest budget shows Alberta's provincial growth will lag behind the rest of the country while deficits continue to mount. There remains, it added, additional risks because crude oil prices could remain below Alberta's budgetary expectations.

"Although the projected deficits include a risk adjustment buffer to reflect oil price volatility, the province has forecasted that West Texas Intermediate crude oil prices will rise from $42 per barrel to $64 per barrel over the next three years," Moody's said. "These prices remain above Moody's oil price forecasts for the medium-term of $33 per barrel for 2016 rising to $43 per barrel by 2018."

Ceci, meanwhile, said Alberta's fiscal obstacles are less severe than some of its provincial counterparts. The plan now, he said, is to control government spending while at the same time diversifying Alberta's economy. Instead of transferring the burden to taxpayers, the minister said a multi-billion spending plan for new infrastructure would help rebuild the economy.

"Albertans have been clear: they want government to responsibly manage debt levels while working hard to support diversification in a growth-oriented business environment," he said. "We have the strongest balance sheet in the country."