Business leaders encouraged the provincial government to dramatically cut spending during a pre-budget consultation in St. John's on Friday.

The province launched the consultations Thursday night.

But Finance Minister Jerome Kennedy kicked things off with the announcement on Wednesday that the deficit is projected to be almost $4-billion in total over the next three years.

Government is looking for suggestions on how to cut spending to minimize the deficit.

Richard Alexander of the Newfoundland and Labrador Employers' Council said the government must deal with the problem now.

"I think there are some serious issues facing the province fiscally, and the more that they can do now, the better off we're going to be down the road," Alexander said.

"This province simply can't afford to have the largest public service of any jurisdiction in North America. There's some significant decisions that this government needs to make."

Some skepticism

However, at least one union leader is questioning whether significant cuts are necessary.

Lana Payne, president of the Newfoundland and Labrador Federation of Labour, said she'd like to take a closer look at the government's projections.

Lana Payne, president of the Newfoundland and Labrador Federation of Labour, says the group is speculative of government's claim of a $4-billion deficit by 2014. CBCLana Payne, president of the Newfoundland and Labrador Federation of Labour, says the group is speculative of government's claim of a $4-billion deficit by 2014. CBC

"It becomes easy for business organizations to go to pre-budget consultations and say to the government, 'Hack and slash away at public services,' in order to solve this problem that the government says we have," Payne said.

She said the government has not balanced the economic prosperity with the needs of the province.

"You can't say we're fiscally poor, but we have all this prosperity happening in our economy," Payne said. "You have to be able to capture some of that prosperity so the people of our province benefit from it — so what's their plan to do that?"

Payne said the federation of labour has hired consultants to take a deeper look into the government's projections. She said the results will be shared with the public.