MISSISSAUGA, ONT.—The federal government revealed a combined, two-year budget deficit exceeding $100 billion and said it will take five years to balance Ottawa’s books.

Despite the Harper government’s massive economic bailout program, prospects for the Canadian economy remain highly uncertain, Finance Minister Jim Flaherty also said Tuesday as he released the annual fall update.

The finance department attributed the uncertainty to the “fragile” and “uneven” state of the global economic recovery.

The government said analysts forecast Canada’s economic growth this year will come in at 3 per cent, higher than predicted in the March budget.

But growth in 2011 will reach only 2.5 per cent, followed by 2.8 per cent in 2012. Both forecasts are below previous expectations.

The weak recovery stems from slow growth in buying and investment by consumers and business in most advanced economies, including the United States, the department said.

The federal budget deficit for the 2009-10 fiscal year that ended March 31 hit a record $55.6 billion, up from $53.8 billion forecast in the March budget. This resulted from payments to Ontario and British Columbia for the introduction of the HST tax, officials said.

The deficit for the current 2010-11 fiscal year is forecast at $45.4 billion, which combined with last year equals a two-year deficit of more than $100 billion.

Despite suffering the biggest deficit in history last year, Flaherty said the government remains on track to balance the budget in just over five years.

“The plan to bring the budget back to balance will ensure that the federal debt, measured relative to the size of the economy, resumes its downward track by 2012-13,” Flaherty told a lunch hosted by the Mississauga Chinese Business Association.

“Our government’s commitment to return to balanced budgets stems from our fundamental belief that the private sector.... must be Canada’s economic engine of growth, not government.”

Unlike in some past years, the government unveiled no new spending or cost-cutting measures in the update.

This year’s deficit — the 2010-11 period — is expected to be $3.7 billion less than the $49.2 billion shortfall previously projected, largely owing to the Canadian economy’s quick recovery from recession starting in the fourth quarter of 2009, which saw growth rates of 4.9 and 5.8 per cent in the fourth quarter of 2009 and first of 2010.

After a sharp expansion in the first several months after the recession ended last year, the Canadian economy has been side-swiped lately by the weak U.S. recovery — which has squeezed demand for Canadian exports — and the softening of the Canadian housing market, a major past driver of domestic growth.

With the slowdown in the economy, it’s unlikely there will be much of a change in the eight per cent national jobless rate over the next few months.

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The update shows no significant changes in the government’s fiscal position over the next five years. In the budget, Flaherty had expected a tiny $1.8 billion deficit in 2014-15, and now expects the shortfall to be $1.7 billion.

With files from The Canadian Press