The Bank of Canada on Friday announced an unexpected rate cut of its benchmark interest rate by 50 basis points to 0.75 percent in response to the COVID-19 outbreak after lowering it to 1.25 percent on March 4, reports Xinhua.
Jeremy Rudin, the superintendent of Canada's financial institutions, also gave Canada's major banks an additional 217 billion U.S. dollars in lending capacity to ensure liquidity in the Canadian economy, a day after the Toronto Stock Exchange experienced the largest one-day drop in its 159-year history when its benchmark index lost 12 percent of its value.
For his part, Finance Minister Bill Morneau announced a 7.2 billion-dollar credit-facility program to lend money to Canadian businesses during the coronavirus crisis, and said that a "significant stimulus program" would follow next week. "These are extraordinary times," Morneau said here at a news conference.
"That means we are ready to take extraordinary measures," Morneau told reporters at the National Press Theater, where the finance minister made the policy announcement with the governor of the Bank of Canada and the superintendent of financial institutions.
Friday's collective financial measures were matched by developments at the political level, with Prime Minister Justin Trudeau in self-quarantine after his wife, Sophie Gregoire Trudeau, tested positive for COVID-19 on Thursday. "I have no symptoms, I'm feeling good. Technology allows me to work from home," he told reporters on Friday outside his residence. "Of course it's an inconvenience and somewhat frustrating."
Frustration has become a reality in Canada, with schools, universities and daycare centers closed across the country, national museums shuttered, and events in the arts and sports world canceled. Travel will be restricted too. Trudeau said there would be a reduction in the number of airports that will accept travelers from overseas. Cruise ships carrying more than 500 passengers and crew will be banned from docking at Canadian ports until July.
On Friday night, the Canadian government issued a statement advising Canadians to avoid non-essential travel outside of the country.
Also on Friday, both the House of Commons and Senate announced that they would stand adjourned until April 20, a move which delays the release of the federal budget, scheduled for May 30. But before the parliament went into recess, it passed bills that give the Trudeau cabinet extraordinary spending powers to address the fallout from the COVID-19 outbreak. As of Friday, 157 people have tested positive for COVID-19 in Canada. One person has died.
