Finance Minister Bill Morneau said the Government of Canada is planning a targeted response to the fallout from the coronavirus and plunging oil prices.
At an Ottawa press conference, Morneau outlined a cautious approach to any fiscal stimulus plan to boost the economy amid the spreading coronavirus.
The Finance Minister said the government is planning to take measures to fund the health system, as well as steps to help individuals and businesses impacted directly by recent events, some of which will be announced this week. Yet he downplayed the need to use a coming budget as a vehicle for a major spending or tax cut package.
“We’re looking at a series of measures that are appropriate for different fact patterns,” Morneau said. “You will see us move forward as we see those facts on the ground.”
It’s a muted response so far from Prime Minister Justin Trudeau’s government, that suggests a reluctance to commit to new stimulus until officials see more evidence that the Canadian economy has entered into a persistent slowdown. That contrasts with the Bank of Canada, which slashed interest rates by half a percentage point last week to help restore confidence in the economy.
Canada’s economy has been rocked by the coronavirus outbreak and plummeting oil prices that are stoking fears of a recession. Canadian markets were battered on all fronts Monday when the S&P/TSX composite index plunged 10.3%, wiping out $218 billion U.S. in market value in the market’s biggest one-day drop since 1987.
