The Department of Finance has been in regular contact with the Bank of Canada and international partners to discuss the potential economic fallout of the ongoing COVID-19 outbreak.
“We are discussing the situation with our international partners,” said Finance Minister Bill Morneau’s spokesperson Maeva Proteau. “Our government’s strong fiscal position means we continue to have all the necessary tools to respond in cases of continued fluctuations in the domestic and global markets.”
Next week, the Bank of Canada will decide if it will keep its 1.75% overnight rate. The possibility of an interest rate cut by the central bank has gone from less than 20% to 60% in just a week, according overnight index swaps data.
The budget for the next fiscal year is expected to be delivered by Prime Minister Justin Trudeau by the end of March.
Statistics Canada data shows that, during the fourth quarter of 2019, the country’s economic growth slowed to 0.3% – its worst annualized rate in nearly four years – due to a range of factors including bad weather, shutdowns, and strikes.
According to the finance ministry, it is too early to determine the exact economic impacts that the virus will have, but the country’s financial institutions and stock market remain strong.
Fears over COVID-19 have dealt a blow to global stock markets, with oil being hit particularly hard. U.S. crude oil futures (CLc1) fell to $44.76 a barrel, marking a nearly 5% drop.