[Azure]

EDMONTON — The Alberta government remains on course for a record deficit this year, but there is now a bigger cushion for the red ink thanks to stronger-than-expected finances from the previous year.

The government on Wednesday unveiled its first-quarter update to the 2010-11 budget, projecting a deficit of $4.76 billion that's virtually unchanged from original estimates.

To cover the deficit, the province is dipping into its sustainability fund, the value of which was expected to drop from $14.9 billion to $8.2 billion by year-end.

Now, that fund is expected to decline only to $11.2 billion, due to some economic good news the province received at the end of last year's budget cycle. Thanks to soaring bitumen prices and a better performing Heritage Fund, that year's projected deficit came in at $1 billion, less than a quarter of what was initially predicted.

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