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Capital Economics worries that some Canadian provinces are leaning toward the type of austerity measures that smacked parts of Europe.

Well, one, in particular. Are you listening, Alberta?

"Politicians think they're doing the good thing, the responsible thing," David Madani, the group's Canada economist, said in an interview.

But politicians "basically need a lesson in history," Mr. Madani added, which is why much of the world is in the mess that it's in.

Mr. Madani pointed specifically at Alberta, and "a little bit" Quebec, and what he expects to see from some of the provinces yet to unveil their budgets.

Alberta did not go all that heavy on restraint, but it piled on the increases to fees and taxes in the wake of the oil shock.

Mr. Madani believes that now is the time for government stimulus, not austerity, particularly given that the Bank of Canada is running out of tools, though he still believes the central bank will slash its benchmark rate to just 0.25 per cent by the end of this year.

"More worryingly, following the lead of other provincial governments, Alberta is attempting to offset the decline in oil-related revenues by hiking taxes and cutting spending," he said separately in a recent report.

"This is the sort of foolish fiscal austerity that backfired so badly in the euro zone."

In his report this week, Mr. Madani admitted that the expects "fairly modest" fiscal tightening from Canada's provinces.

"But at a time when private demand is falling, public budgets should be fulfilling their role as an automatic stabilizer, with deficits allowed to widen naturally," he said.

"The fiscal austerity being planned is the sort of mistake that proved so costly in the euro zone."

This week, the latest province to act, Nova Scotia, forecast a small deficit of about $98-million for fiscal 2015-2016, though a rebound a year later.

Spending will rise at a modest pace of less than 1 per cent, more than 300 jobs will be slashed, and non-union employees will suffer a wage freeze for three years.

"This budget comes with a dose of spending restraint and, while only a few new revenue measures were announced today (netting out to roughly a $16-million increase for FY 15/16), more meaningful taxation reform could be coming in the year ahead," said senior economist Robert Kavcic of BMO Nesbitt Burns, citing recommendations for tax changes from a review late last year.

"On the tax side, the overriding message is that consumption taxes should increase (in part through a broadening of the tax base), while income taxes should be simplified and reduced."

Six provinces have now unveiled their budgets, and "we're seeing a little bit of everything (except tax cuts – at least for this year)," Mr. Kavcic said in a separate report.

"Note that of the six to report so far, half are in deficit while the rest are in surplus," he added.

"And, three are expected to see their balance improve while three see it deteriorating. Of the four remaining, all are likely to be in deficit this fiscal year."

Those four are Ontario, Manitoba, Prince Edward Island and Newfoundland and Labrador.

We'll also get the federal budget on April 21.

Mr. Madani noted that austerity is a global trend, and not unique to Canada.

He added that there's now "overdependence" on monetary policy – the world's central banks have scrambled to cut interest rates – rather than on fiscal policy.

In certain cases, such restraint may be the right avenue. But not in the case of Alberta, which came into the oil shock in a "very strong" position.

Federal Finance Minister Joe Oliver met Thursday with several private sector economists in the run-up to his budget, which he has pledged to balance, and was told to expect a modest showing this year.

"The economists noted that the sharp decline in global crude oil prices and weak global economy were affecting Canada's economy," the Finance Department said.

"However, they also noted that Canada's underlying economic fundamentals remain strong, and that they expect real gross domestic product (GDP) growth to average about 2 per cent for 2015 as a whole."

Mr. Madani, by the way, has a view of the Canadian economy that is bleaker than many of his counterparts.

He believes the economy will expand by 1.5 per cent this year and just 1 per cent in 2016.

And in a particularly troubling sign, he sees the unemployment rate jumping above 7 per cent in the second half of this year, and holding there throughout all of 2016.

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