Finance Minister Bill Morneau announced a $10 billion stimulus fund for business in Canada in response to the “extraordinary” COVID-19 pandemic.
Morneau made the announcement Friday afternoon alongside Bank of Canada Governor Stephen Poloz and Superintendent of Financial Institutions Jeremy Ruden.
“I’m told this is a rare occasion, maybe even a first for a finance minister, a governor of the bank of Canada, and the superintendent of financial institutions to make a policy announcement together,” said Morneau.
“These are extraordinary times and that means we are ready to take extraordinary measures.”
The $10 billion stimulus program will be distributed through the Business Development Bank of Canada and the Export Development Canada.
“The government of Canada is preparing a significant stimulus program to be released next week to stabilize our economy, to support businesses and to protect Canadians during a difficult time,” said Morneau.
“As a first step, today I’m announcing that we are establishing our Credit Facility Program to support businesses and to stimulate the economy. This will make $10 billion dollars available in additional support for Canadian businesses through the Business Development Bank of Canada and Export Development Canada.”
Poloz also announced that the Bank of Canada will be cutting interest rates to 0.75% to stimulate economic activity.
The announcement comes after a number of significant banks and economists, including RBC, CIBC and the Bank of America stated that they expect the Canadian economy to enter into a recession.
“Hit by both the virus and oil markets, Canada and the U.S. are likely to join a growing list of countries facing an economic contraction,” said CIBC economist Avery Shenfeld and Bejamin Tal.