initdb - encoding question

Hi
Im tying to initialize the cluster using initdb and encoding 'UTF8'
initdb -E UTF8 -D /export/home/josh/postgres8.3/pgsql/data

But I get this error
The files belonging to this database system will be owned by user "josh".
This user must also own the server process.

The database cluster will be initialized with locales
  COLLATE:  en_CA.ISO8859-1
  CTYPE:    en_CA.ISO8859-1
  MESSAGES: C
  MONETARY: en_CA.ISO8859-1
  NUMERIC:  en_CA.ISO8859-1
  TIME:     C
initdb: encoding mismatch
The encoding you selected (UTF8) and the encoding that the
selected locale uses (LATIN1) do not match.  This would lead to
misbehavior in various character string processing functions.
Rerun initdb and either do not specify an encoding explicitly,
or choose a matching combination.

Why do I get this error? How can I solve this?
Thanks
josh