Finance Minister Bill Morneau says support is coming for Canadians who have to be quarantined in order to prevent the spread of the novel coronavirus.
“We know that in the face of rising uncertainty, Canadian businesses — just like workers and families — are feeling the impacts. Although things are changing quickly, it’s clear that the COVID-19 outbreak is going to impact the real economy, and markets,” he said during a speech Friday morning at Canadian Club Toronto.
Morneau was short on details, but promised specifics next week.
“We have the capacity to both help businesses if they go through challenges, if that happens, or individuals if they find themselves either having to be away from work for a short period of time or a longer period of time,” he said.
His speech capped a week that saw the Bank of Canada cut its key interest rate target by half a percentage point, dropping it to 1.25 per cent, and saying it was prepared to cut further if needed to help tackle the economic shock from the novel coronavirus outbreak.
Concerned about the potential economic fallout of an outbreak, the Liberal government will also increase the risk adjustment provision — a contingency plan— in the upcoming budget “to ensure that we are ready and able to respond,” said Morneau.
Last year’s risk adjustment pot was $3 billion.
“We are continuing to monitor the impact on businesses and workers. We have the tools to respond quickly,” said Morneau.
“It’s important to keep in mind that what this will mean for the Canadian economy ultimately depends on the depth and geographical spread of the virus. And these things cannot be known, until they are known.”
Resilience of Canadian economy could be ‘seriously tested’
The number of people around the world infected with the novel coronavirus moved toward 100,000 Friday, including more than 40 cases in Canada. Health officials in B.C. are investigating after a woman who had no travel history to areas dealing with a coronavirus outbreak and hadn’t been in contact with COVID-19 patients tested positive for the illness, Canada’s first apparent case of coronavirus spread in the community.
Health Minister Patty Hajdu said the federal government is also making $27 million available to 47 Canadian research teams to combat the novel coronavirus and the illness it causes, COVID-19.
The minister said the research will help develop diagnostic tools and vaccines, plus create strategies to tackle misinformation, stigma and fear.
World Health Organization assistant director-general Bruce Aylward, who hails from Newfoundland and Labrador, praised Canada’s response so far.
“Canada has done a pretty exemplary job. You know you’ve had cases in three different provinces, multiple importations and most of these you’ve been able to contain very, very rapidly. There’s not a lot of advice to be given to Canada, it’s a lot of ‘well on,'” he told CBC Radio’s The House.
He said one of the most important things for governments to do is keep residents informed.
“You don’t need to alarm them. You don’t need to sugarcoat it. But they need to know how severe it is or can be so that they’re going to engage properly,” he said.
Morneau said Canada is already seeing impacts on commodity prices, including oil and metals; on the tourism industry, including air transportation, retail, hotels and restaurants; and is feeling the hit to global supply chains, especially in Asia.
Minister of Tourism Mélanie Joly said Chinese tourism is normally a $2-billion windfall for Canada, but she expects it to drop by $550 million by June.
“The tourism industry is deeply affected,” she said Friday. “The duty-free boutique at the Vancouver airport is down 50 per cent of its revenues.”
Bank of Canada governor Stephen Poloz said Thursday the Canadian economy’s resilience could be “seriously tested” by a coronavirus outbreak, depending on its severity and duration.
“There is a real risk that business and consumer confidence will erode further, creating a more persistent slowdown, especially given recent declines in stock markets,” he said.
The Canadian dollar fell to 74.51 US after Poloz’s remarks.
