Trudeau Vows to Steer Canada Clear of Coronavirus Slowdown

(Bloomberg) -- Prime Minister Justin Trudeau promised his government will protect Canada's economy from a possible slowdown due to the outbreak of coronavirus.

The Canadian leader -- speaking Tuesday morning after Group of Seven finance ministers and central bankers held a conference call on the global health crisis -- opened the door to targeted aid for affected industries. Separately, Finance Minister Bill Morneau said the government has the fiscal room to move if needed.

“We will continue to ensure that the economy does not become subject to a slowdown that would hurt Canadians,” Trudeau said in Halifax, Nova Scotia. “But this is a global context that we are facing and we don't have total control.”

Morneau took part in the G-7 call, which stopped short of spelling out a specific policy response. His office later signaled a willingness to spend more if circumstances demand it. “Our strong fiscal position continues to give us the necessary leverage to respond,” press secretary Maeva Proteau said by email.

After Trudeau spoke, the Federal Reserve made an emergency half-percentage point interest rate cut to shield the U.S. economy from “evolving” coronavirus risks. The Bank of Canada has a rate decision scheduled Wednesday morning at 10 a.m. in Ottawa, with investors increasing their bets it will follow suit.

Domestic Measures

Proteau said Morneau is working with his G-7 counterparts to monitor and mitigate the spread of coronavirus, “reaffirming their readiness to take action as necessary.” And while Trudeau wasn't asked specifically about a potential fiscal response, he did leave the door open to government aid.

“There will be impacts on Canadian businesses, on entrepreneurs, and we will always look for ways to minimize that impact and perhaps give help where help is needed,” the prime minister said.

When asked why Canada wasn't taking as strong public-health measures as other countries, Trudeau said his government is following recommendations from the World Health Organization. “There are a number of countries that have made different choices but we are confident that what we have done in Canada, and what we continue to do in Canada, is right for Canada,” the prime minister said.

Health Canada has reported a total of 27 cases of coronavirus spread between Ontario, British Columbia and Quebec, with no deaths domestically so far.

While the WHO has yet to declare the outbreak a global pandemic, there have more than 92,000 cases and 3,100 deaths worldwide.

To contact the reporter on this story: Kait Bolongaro in Ottawa at kbolongaro@bloomberg.net

To contact the editors responsible for this story: Theophilos Argitis at targitis@bloomberg.net, Stephen Wicary, Chris Fournier

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