Prime Minister Justin Trudeau says that COVID-19 — with several new cases reported in Canada and the United States — is a moment of “real challenge” as health officials work to contain the virus and governments ready contingency plans to blunt the economic fallout of the health crisis.

Trudeau on Tuesday said Canada’s approach to the virus outbreak is working and said the numbers — 33 cases reported in the country, including 20 in Ontario — bear that out.

“We are confident that what we have done in Canada, what we continue to do in Canada is right for Canada,” he said.

Trudeau acknowledged, however, the virus is taking an economic toll.

“We also recognize that there will be impacts on Canadians business, on Canadian entrepreneurs and we will also look for ways to minimize that impact and perhaps give help where help is needed,” Trudeau told reporters during a stop in Halifax.

The Bank of Canada is expected to react to those economic worries Wednesday by cutting a key interest rate. As well, the federal government is looking at contingency measures, all to blunt the economic fallout of the spread of COVID-19, which is ravaging tourism, rattling financial markets and upsetting global supply chains.

Analysts are expecting Canada’s central bank will trim its overnight rate by as much as half a percentage point to boost the economy and consumer and business confidence in the face of what the National Bank of Canada called a “clear and present danger” posed by the virus.

That rate cut would follow Tuesday’s move by the U.S. Federal Reserve, sobering signals that central bankers see trouble ahead.

Federal Finance Minister Bill Morneau talked with other G7 finance ministers and central bankers Tuesday and said later the government is weighing a number of measures to provide economic support if needed.

The World Health Organization on Tuesday reported 90,870 cases of COVID-19, with 10,566 of those outside China. There have been 3,112 deaths worldwide.

The pace of spread appeared to slow in the last day in China while the majority of new cases were reported in just a few countries — Italy, South Korea and Iran. Twelve countries reported their first cases. The U.S. reported more than 100 cases and nine deaths across 12 states.

Dr. Tedros Adhanom Ghebreyesus, WHO’s director general, warned Tuesday of a development that could compromise efforts to curb the virus — a shortage of gloves, medical masks, respirators and other protective equipment.

“Shortages are leaving doctors, nurses and other front line health-care workers dangerously ill-equipped to care for COVID-19 patients,” he said. “We can’t stop COVID-19 without protecting our health workers.”

The fear that the economic impacts suffered in regions hard hit by the virus such as China and Italy could further spill over into the global economy was the topic of a teleconference call between G7 finance ministers and central bank governors Tuesday morning.

In a statement, they vowed to use “all appropriate policy tools” to dampen the economic toll of the virus.

“G7 finance ministers are ready to take actions, including fiscal measures where appropriate, to aid in the response to the virus and support the economy during this phase,” the statement said.

Morneau said the finance department is closely watching sectors of the economy most vulnerable such as commodities, travel and tourism.

“We’re going to be thinking about the broad range of things we can do and we will be following the actual facts on the ground to decide when and if we should do those,” he said.

The Canadian economy is already feeling the effects of blockades that stymied rail shipments across large parts of CN’s network, which made for a “devastating” February for manufacturers, an industry group said Tuesday.

“The rail blockades, COVID-19 … and now the prospect of U.S. tax cuts as a response to the pandemic threat are putting serious pressure on the Canadian economy,” the Canadian Manufacturers and Exporters said in a statement.

Association president Dennis Darby said that it is “critical” that the coming budget include measures to support businesses, such as encouraging investment and address labour shortages. But he said the federal government has to be ready too with emergency stimulus measures.

Doug Porter, chief economist and managing director of BMO Financial Group, said that Tuesday’s rate cut in the U.S. “sets the table for a relatively aggressive move” by the Bank of Canada Wednesday.

“Clearly, this is not an issue that monetary policy can fix . . . but they can help soften the impact and take off some of the rougher edges for the economy from this virus,” he said.

He said that Canada is more vulnerable to a virus-spurred downturn because of the drop in commodity prices and noted that the Bank of Montreal had already trimmed its forecast for economic growth in Canada to 1.2 per cent for the year.

The federal Liberals are expected to release their budget — the first since the October election — in the coming weeks. But the escalating impact of the virus could force changes. Slower-than-expected growth would add to the deficit and the government could be forced into stimulus spending, something Porter said could come in the budget.

“They probably agreed to ramp up stimulus in this year’s budget,” Porter said.

John Manley, a former Liberal finance minister and deputy prime minister, told a public policy forum in Ottawa Monday that he worried about the potential impact of coronavirus and other external events on the federal government’s bottom line.

Speaking about the Chretien government’s painful exercise of slashing the deficits in the mid-1990s, Manley said he learned the hard way how vital it is to put the government’s books in the black.

Governments that do not trim deficits when times are good leave themselves vulnerable when inevitable crises are triggered, for example “when somebody gets sick in China” and an epidemic ripples outward, affecting global markets and the economy, he said.

Jerome Powell, chair of the U.S. Federal Reserve, conceded that Tuesday’s rate cut can only do so much to contain the economic fallout that he said is already being felt.

“We do recognize that a rate cut will not reduce the rate of infection. It won’t fix a broken supply chain. We get that. We don’t think we have all the answers,” Powell told reporters in Washington.

“But we do believe our action will provide a meaningful boost to the economy,” he said.

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