MNI POLICY: Canada To Offer Big Stimulus, Starts Closing Shop

--PM Trudeau Spoke From Home After Wife Contracted Virus

By Greg Quinn

     OTTAWA (MNI) - Canadian Prime Minister Justin Trudeau on Friday promised

major fiscal stimulus in response to the coronavirus, as the government made

major moves to tighten borders and discourage large gatherings.

     Trudeau said Finance Minister Bill Morneau will announce some details later

Friday and the package could be realized in the next few days. He spoke outside

his residence where he's isolating himself for 14 days after his wife tested

positive for the virus. Trudeau said he has no symptoms and is feeling well.

     "We are pulling out all the stops," Trudeau said of the government's

response to the outbreak with 152 confirmed cases and one death as of Friday

morning. "We are primarily focused on how to get money into the pockets of

Canadians who need it."

     Asked about border closings, he said decisions will be "based on

recommendations of experts" and "we aren't closing the door to any further

steps." 

     Trudeau spoke after lawmakers suspended Parliament until April 20 and left

the next budget in limbo. Morneau on Thursday night had said he was sticking to

a March 30 budget date, and the motion to suspend came without a clear plan on

what happens now. The closure has little precedent in a nation that kept

lawmakers working through two world wars and even after a fire that burned down

most of the main building of parliament. 

     The most trade-dependent nation in the G7 is aiming to avoid major clusters

of the disease seen in Italy and Iran, and put the first restrictions on

visitors to Canada by suspending access for cruise ships with more than 500

people. Border guards will also step up coordination of health surveillance at

airports and other border entry points. Canada also said citizens should avoid

all non-essential travel abroad.

     The main question is whether CAD1 trillion of annual trade with the U.S.

will be disrupted, especially after President Donald Trump banned travelers from

Europe and Canada didn't follow suit. One sign of the concern is Trudeau's

minority government won the support of all opposition parties to ratify the

USMCA today in a last act of legislative work.

     Provincial health authorities have already sought bans on large gatherings

and the country's beloved pro hockey league has suspended its season. Canada's

most populous province of Ontario on Thursday said it will close schools for two

weeks following the March break that begins Friday afternoon. 

     The economy could use the help. The Bank of Canada cut rates by 50bps on

March 4, and on Friday RBC, Bank of America and CIBC said Canada is heading for

a recession. Morneau had already boosted the deficit for the fiscal year ending

March 31 to CAD26.6 billion from CAD19.8 billion on employee pension costs, and

to CAD28.1 billion for fiscal 2020-21.

--MNI Ottawa Bureau; +1 613-314-9647; email: greg.quinn@marketnews.com

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