Canada unveils C$27 billion aid package to offset coronavirus outbreak

OTTAWA (Reuters) – Canadian Prime Minister Justin Trudeau on Wednesday said his government would provide C$27 billion ($18.6 billion) in support directly to families and businesses struggling because of the coronavirus outbreak, and stands ready to do more.

“No Canadian should have to worry about paying their rent or buying groceries during this difficult time,” Trudeau said at a news conference outside his home, where he has been under quarantine since last week when his wife tested positive for COVID-19.

“(These) economic measures will ensure that our economy rebounds after this … Our government is prepared to do more.”

The government will also provide C$55 billion in additional aid to businesses and households through tax deferrals. The combined measures will put more than 3 percentage points of the country’s annual output into circulation, the finance minister said.

The Liberal government “will do whatever it takes” to support the economy, Finance Minister Bill Morneau told reporters later, calling the measures a “first phase” of economic stimulus. Talks with airlines and the oil and gas sector about specific aid to them are ongoing, he said.

The government will soon announce a significant investment in Alberta – the heart of the country’s struggling energy sector – which will include funding to clean up orphan wells, Morneau said.

Bank of Canada Governor Stephen Poloz spoke alongside Morneau at the news conference. The central bank is ready to provide markets with all the liquidity it needs, Poloz said. He did not rule out further rate cuts or even quantitative easing.

Canada has recorded about 600 cases of the virus nationwide, and eight deaths. With the spread of the diseases accelerating, Canadian authorities have shuttered schools, closed bars and restaurants and are encouraging people to stay at home.

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On Wednesday, Trudeau and U.S. President Donald Trump agreed to stop all non-essential travel between the two countries, just two days after Canada said it would bar all foreign nationals except Americans from entering the country.

The Canadian dollar CAD=D4 weakened further after the announcement, touching a four-year low of 1.4535 to the U.S. dollar.

The fiscal package “will help prevent prolonged slump,” Stephen Brown, a senior economist at Capital Economics, said in a note. “We still think the government needs to do more to secure a strong recovery further down the line.”

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