(Bloomberg) -- Canadian Finance Minister Bill Morneau said he plans a targeted response to the fallout from the coronavirus and plunging oil prices, laying out a cautious approach to any fiscal stimulus plan to boost the economy.
In an Ottawa press conference and interview with BNN Bloomberg, Morneau 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 package.
“We’re looking at a series of measures that are appropriate for different fact patterns,” Morneau said Monday in the interview. “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 the 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.
The country’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 on Monday when the S&P/TSX Composite Index plunged 10.3%, wiping out $218 billion in market value in the biggest one-day drop since 1987.
As he has in recent days, Morneau reiterated the government has plenty of fiscal capacity to move as aggressively as needed, with Canada in a “much better starting point” in terms of debt levels than other Group of Seven countries.
At the same time, he’ll deal with challenges as they develop in a “roll out” format.
“We shouldn’t think of the budget as the only way to respond,” said Morneau, who has yet to announce a date for his fiscal plan that is expected before the end of this month. He likened any response to recent steps to help the steel and aluminum sectors, which came outside of a formal budget plan.
“As the economy develops we will be responding appropriately,” Morneau said in his press conference.
--With assistance from Erik Hertzberg.
To contact the reporter on this story: Kait Bolongaro in Ottawa at email@example.com
To contact the editors responsible for this story: Theophilos Argitis at firstname.lastname@example.org, Stephen Wicary
For more articles like this, please visit us at bloomberg.com
Subscribe now to stay ahead with the most trusted business news source.
©2020 Bloomberg L.P.