The medical crisis of COVID-19 has metastasized into financial crisis that world leaders are struggling to mitigate."
With the threat of recession from a multitude of coronavirus-induced financial symptoms, Prime Minister Justin Trudeau will announce a rage of fiscal stimulus and support measures Wednesday.
The focus will be on those who are forced to self-isolate and businesses who will suffer losses from reduced sales and sick workers.
Among the most likely measures is the funding to allow businesses to keep workers on the payroll even if they aren’t working. Coupled with delays to income tax filing and payments, the hope is to avoid lay-offs.
Trudeau is among many Canadians who are self-isolating after showing symptoms of the illness or being in contact with someone who is already sick.
This week, RBC Economics warned that the coronavirus outbreak will have a significant impact on the Canadian housing market, especially in the short term.
$100 billion required?
The G7 group of world leaders has been in discussion to provide a concerted effort to try to avoid a global recession. Canada’s government is, as with its peers, almost certain to need to increase stimulus and support measures as the trajectory of the outbreak becomes clearer.
Bloomberg calculates that if Canada were to match the potential US stimulus package of US$1.2 trillion, the equivalent cost would be around $100 billion.
BMO says that Ottawa will need a C$20 billion package, although the outbreak has worsened since it made the recommendation last week.