Canadian Manufacturing

Morneau talks up fiscal room as COVID-19 concerns mount

Morneau stressed the economy and federal finances can weather the storm from COVID-19 and a sudden plunge in oil prices

March 10, 2020  The Canadian Press

OTTAWA – Finance Minister Bill Morneau sought to ease the concerns over the novel coronavirus outbreak on a day where financial markets dropped along with the price of oil, and the Liberals said they were preparing help for a worst-case economic scenario.

Morneau said the government was looking at taking some initiatives to help affected workers and families, ensure businesses make it through financial challenges, and keep Canada’s health-care system healthy.

He stressed the economy and federal finances can weather the storm from COVID-19 and a sudden plunge in oil prices.

Morneau suggested any federal stimulus spending wouldn’t be tied to the budget, for which he did not provide a date.

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“We need to be thinking about how we respond to events appropriately and that will not necessarily be just about the budget,” Morneau said after markets closed on March 9.

“There are sectors of our economy that are going to go through real challenges because of the changes right now…and we’ll be looking at how we can make sure that we are appropriately dealing with those challenges.”

Over the weekend, an oil price war between Saudi Arabia and Russia lowered the price of crude below federal budget projections.

Federally, the parliamentary budget officer has previously estimated a US$15 decline in crude prices would shave $4 billion off the budget for the fiscal year beginning April 1.

The Liberal government’s economic update from late last year projected the price of West Texas Intermediate at US$57 a barrel for this calendar year. On March 6, it ended trading around US$31, a difference of US$16.