Canada to unveil more fiscal steps

Bloomberg

Prime Minister Justin Trudeau said Canada will introduce a “significant” fiscal stimulus package, as part of a coordinated effort with other Group of Seven countries to counter the virus-driven global economic slowdown and calm markets.
Finance Minister Bill Morneau and Bank of Canada Governor Stephen Poloz were due to hold a press conference in Ottawa, along with Jeremy Rudin, head of the Office of the Superintendent of Financial Institutions of Canada, the federal banking regulator.
At a press conference at his home in Ottawa, Trudeau said his country has the fiscal capacity to act. The Canadian prime minister also said G-7 leaders have agreed to work together to respond to the crisis.
The “government of Canada will be introducing a significant fiscal stimulus package in the days ahead,” Trudeau said. “In my conversations with my fellow G-7 leaders, we have agreed that it will be important for us to coordinate at a G-7 level to impact the global economy.”
After days of incremental measures, global policy prescriptions were coming thick and fast. Congress was said to be near a deal on a relief bill in the US. The European Union (EU) prepared to suspend government spending rules, and regulators in Italy and Spain banned short-selling on some stocks. China’s central bank said it would pump in $79 billion to bolster the economy.
French President Emmanuel Macron said in tweet he agreed with President Donald Trump to hold an “extraordinary” leaders’ summit by video-conference.
Canada’s government is ramping up the response as the nation’s economy reels from a double hit from the coronavirus and plunging oil prices, with many economists now predicting the country is on the brink of recession.
Trudeau has refrained from announcing any robust fiscal stimulus package despite moves from other countries globally who have announced more aggressive plans. It has promised just C$1.1 billion in additional funding to respond to the virus.
It’s now likely that Canada’s economy will fall into a recession this year. Several economists at Canada’s largest banks are predicting a contraction in second and third quarters of 2020 due to the economic fallout from the pandemic and tank in oil prices. While it’s likely that other countries will enter into a recessionary period as well, Canada is particularly vulnerable due to it’s reliance on oil sector.