The minister also promised the next federal budget, which he still plans to unveil at the end of the month, will be able to reflect the “volatility” and “uncertainty” being seen in the markets.
“We have a very, very strong fiscal position in Canada, the best among G7 countries,” he said. “That’s going to allow us to continue to invest, to make sure our economy stays strong, to make sure we come out of this challenging time with the opportunities that Canadians expect and deserve.”
Thursday’s 1,700-point or 12 per cent market drop marked the biggest one-day decline ever for the TSX, breaking the previous record set on Black Monday in October 1987. Wall Street and European markets also posted near-record freefalls as dozens of events and sports seasons were suspended or cancelled in rapid succession Wednesday and Thursday.
Stocks fell so fast at the opening bell that they triggered an automatic 15-minute trading halt for the second time this week. The so-called circuit breakers were first adopted after the 1987 crash, and until this week hadn’t been tripped since 1997.
Morneau did not announce any specific measures to calm those market woes, only promising that his ministry and the rest of the federal government were working with their partners at home and internationally on a coordinated response.
“We are making sure that we continue to have the capacity to respond in a challenging time, and we want Canadians to know that we will have their back,” he said.
The minister said he and Prime Minister Justin Trudeau — who went into self-isolation Thursday as his wife Sophie awaited the results of a coronavirus test — have been in contact with their provincial and international counterparts discussing future economic plans.
That included conversations between Trudeau and U.S. President Donald Trump, who announced his own plans for economic relief Wednesday while announcing restrictions on travel from Europe during a televised Oval Office address.
Trudeau has also had conversations with Italian Prime Minister Giuseppe Conte, whose country is under lockdown as it deals with an outbreak of the virus that has jumped past 12,000 cases.
Morneau himself said he’s been talking to financial ministers in Ontario and Alberta, and was planning to talk with U.S. Treasury Secretary Steven Mnuchin later Thursday.
But he said those discussions were focused largely on coordinating efforts, pointing to the back-to-back announcements from the U.S. Federal Reserve and the Bank of Canada on lowering interest rates as an example.
“We’re going to continue to work together to make sure we can deal with this in a way that makes sense,” he said.
Morneau said he’s asked the private sector economists who helped craft the basis of the economic forecast to come back with a “refresh” of their expectations, so that the budget can still hold amidst the volatility caused by the coronavirus outbreak. Details of the federal budget are still expected to be announced on March 30.
“We’re going to be transparent about that with Canadians,” he said. “From there, what we’re going to do is use our fiscal strength to make sure that our economy stays strong in the face of this uncertainty.”
The minister said measures would be put in place on Budget Day to ensure the health and safety of ministers, government staff, and reporters, who are required to go into a “lockup” together while the budget is unveiled.
Morneau said he couldn’t speak to whether Parliament is preparing an interim supply bill that would provide spending authority in the event of a temporary government shutdown over the spread of coronavirus.
As of Thursday, 143 cases of COVID-19 have been confirmed across nearly every province of the country, barring the Maritimes. One person has died of the disease in British Columbia.
The Canadian government announced a $1-billion support package Wednesday to funnel money to the provinces and territories, as well as public health agencies, to prepare to deal with the impact of the new coronavirus.
Morneau has said the budget will likely include an increased contingency fund should the economic hit from COVID-19 be prolonged and deep. The budget deficit is projected to be 28.1 billion before any new spending.
—With files from the Canadian Press