Budget deficits that increase the finances of Canadian provinces will reduce government spending and a gloomy outlook for economic growth in 2011, according to a memorandum filed Friday by Provincial Outlook Conference Board of Canada.

Marie-Christine Bernard, director of the Conference Board, said that only four provinces are expected to show surpluses in fiscal year 2010-2011: Saskatchewan, Newfoundland and Labrador, Nova Scotia and Alberta .

Ms. Bernard noted that the provincial government spending in the programs have grown at an unsustainable pace in the last five years. The recovery measures have increased the deficit and governments are now starting to getting back on track.


However, achieving a balanced budget will be more difficult for the provinces that the federal government in the coming years as health care costs are soaring.

In Quebec, the tax increases, which are part of an effort to better control public finances, eat up disposable income and spending power, according to the Conference Board. The weak domestic economy will limit the growth of Gross Domestic Product (GDP) to only 1.8 percent in 2011.

The Conference Board expects that the Ontario economy grew by 2.1% this year since a resurgence of business confidence and investment spending will offset declines in residential construction and public infrastructure . In addition, Ontario’s exports will continue their ascent.

As for the Maritime provinces, they will suffer as the downward trend of economic growth in 2011. In New Brunswick, as governments spend less in infrastructure, the construction industry continue to struggle. The province can expect better than a 1.3% growth this year.

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