EDMONTON - Consumer rebates for natural gas are being eliminated in energy-rich Alberta - the latest sign of the province's economic meltdown.

Since 2003, the province has paid nearly $2 billion in rebates on gas bills between October and March. But Energy Minister Mel Knight stood in the legislature Thursday to announce the program is ending.

"In the future, we will take a look at the program or an alternate form of the program if natural gas prices significantly recover," he told the assembly.

Knight later explained that as the recession worsens the rebate has simply become unaffordable.

"We need to make sure that we are being prudent with Albertans' money and do everything we can to spend wisely," the minister told reporters.

Premier Ed Stelmach said if natural gas prices spike again, the province will ensure that seniors and other low-income Albertans are protected with some type of new program.

"We're not predicting high gas prices at least for the next year," said the premier. "If they should spike unexpectedly...we will have targeted protection for those that need the help."

But Jim Wachowich, a lawyer who speaks for the Consumers Association of Canada, said many Albertans believe they're entitled to cheap natural gas because the province has vast energy reserves.

"The rebate mechanism, with its flaws and all, was a method by which some of that resource wealth was shared with those people," Wachowich said in an interview.

The consumer group is now scrambling to get information from the government on what type of alternative program may be in the works for the people with low incomes who can't afford to heat their homes when natural gas prices are high.

The government's suggestion Thursday that people with high heating bills should seek help from welfare programs is just not acceptable to most people, said Wachowich.

"There's a problem with the stigma (of going on welfare)," he said. "This broad-based approached worked because no one had to apply for it."

NDP Leader Brian Mason said the elimination of these rebates will be an immediate hardship for many Albertans.

Mason also noted this news was announced a day after Alberta's Tory government confirmed that 6,000 senior bureaucrats will share $40 million in performance bonuses this year.

"That is wrong, $40 million for bonuses while our seniors freeze in their homes," said Mason. "People shouldn't have to cancel shopping trips for food in order to pay to heat their homes."

The rebates began in the winter of 2003 and kicked in when gas rates went above $5.50 per gigajoule. The program's launch followed a public outcry over reports that Albertans were paying more for natural gas than consumers in Ontario.

The rebates were paid to homeowners, farmers, businesses, non-profit operations and community organizations. But the largest portion of the money went to residential consumers, who saw their monthly heating bill reduced by $35 or more in the winter.

Liberal energy critic Kevin Taft says there's no question that the announcement was poorly timed, with many Albertans still grumbling about civil servants getting hefty performance bonuses.

But Taft said Alberta would be far better off limiting gas rebates to people with low incomes.

"So that millionaires pay the full freight for their mansions, but seniors on fixed incomes can get a break," he said. "Secondly, there should be an incentive program for better energy efficiency."

Alberta's economy has taken a beating since oil prices fell by roughly 70 per cent from record highs over the summer, trimming nearly $10 billion from the province's projected revenues.

For the first time in 15 years, Alberta is struggling with a budget deficit and cabinet ministers have been told to look for spending cuts and efficiencies to help pull the province out of the red.