Morneau warns of 'extreme pressure' facing businesses amid COVID-19
Finance Minister Bill Morneau isn’t taking the potential for further fiscal stimulus off the table in wake of the COVID-19 pandemic.
In an interview on BNN Bloomberg Thursday, Morneau said the federal government is standing at the ready to take decisive action as the situation develops.
“What we’re trying to do is to make sure we take the right decisions at the right times to support people in the right way,” he said. “We have the information that we have right now, and that of course is that people are extremely concerned about their health.”
The federal government tabled an $82-billion aid package Wednesday in a bid to support the domestic economy, representing about three per cent of gross domestic product, including $27 billion directly targeted at consumers.
Morneau said Canadians concerned about job losses or furloughs, and the subsequent loss of income, are among Ottawa’s most pressing priorities.
“We have 5.7 million people in our country out of the 19 million people that are employed that aren’t in the employment insurance system, so that was critical,” he said. “We’re going to need to see the emerging information for what we do tomorrow. We’ve said that we want to support businesses through this time.”
Find more coverage of the fallout from COVID-19 here.
As part of that support package, Ottawa has pledged to provide small employers with a 10-per-cent wage subsidy in order to keep staff on payrolls, a measure that some economists say may not achieve the goal at hand.
In an email to BNN Bloomberg, CIBC Deputy Chief Economist Benjamin Tal said the subsidies were comparatively small compared to similar measures in Europe, but could be beneficial in concert with the other proposals.
“[The subsidy is] a bit light relatively speaking. I guess the hope is that in addition to the other measures that will help, at least at the margin,” he said.
When asked if the federal government might be willing to take equity or debt positions in troubled companies to keep them afloat, the finance minister again wouldn’t limit his options, but emphasized the need for both the private sector and the federal government to collaborate on supporting the economy.
“We’re not going to take anything off the table, that would be inappropriate for us,” he said. “We’re in an unprecedented time and we need to be considering all potential approaches.”
Overall, Morneau said there is a need for speed in the current fluid environment.
“We’re going to have to work fast, but we need to think about what we’re trying to achieve in what we hope is a temporary dislocation of our economy.”