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RBC predicts recession, Trudeau promises help

Prime Minister vows help for workers, business hurt by virus containment measures
'We are in the enviable position of having significant fiscal firepower available to support you' – Prime Minister Justin Trudeau

Prime Minister Justin Trudeau emerged from self-imposed quarantine Friday to assure Canadians that help is coming for those laid off or otherwise affected by efforts to contain the spread of the COVID-19virus.

He also vowed help for small businesses and assured Canadians that Canada has the fiscal “firepower” to insulate Canada from recessionary shocks.

“No one should have to worry about paying rent, buying groceries or additional child care because of COVID-19,” Trudeau said Friday.“We will help Canadians financially. The government of Canada will be introducing a significant fiscal stimulus package in the days ahead.”

Trudeau’s wife, Sophie Gregoire Trudeau, has tested positive for the COVID-19 virus, though Trudeau himself is currently symptom-free. The Trudeaus are now self-quarantined at home.

Trudeau’s announcement of new measures to contain the spread of COVID-19, and measures to mitigate the impact on workers and the economy, came on the same day that RBC Economics predicted a global recession.

 As part of measures to contain the spread of the virus, Trudeau said the cruise ship season is being suspended until July, and that enhanced screening measures will be implemented at airports.

Canadians are asked not to travel outside of Canada, if it can be avoided. Whether Canada closes its borders to some countries will depend on what public health experts recommend.

"We are not closing the door to any further steps, but we make make those decisions based on what science tells us," Trudeau said.

As of March 12, there were 53 confirmed cases of COVID-19 in B.C., and 159 Canada-wide.

The impacts of the COVID-19 virus is hitting Canada on the heels of railway blockades that brought the flow of goods and people to a halt, and plunging oil prices, which pushed stock markets into bear territory.

Economists at major banks, including RBC, now predict a global recession. RBC Economics had predicted Canada’s GDP growth rate to be 1.6% in 2020. But it now predicts it will be negative in the second and third quarters. It now predicts GDP growth in Canada for 2020 to be just 0.2%.


Thursday night, the Business Council of BC (BCBC) took the unprecedented step of revising its recently released economic forecast for 2020.

The original forecast, released in early February, had estimated Canada’s economic growth rate for 2020 to be 1.6%. It has now shaved off half a per cent, bringing Canada's economic growth forecast down to 1.1%, which is higher than what RBC Economics is forecasting.

As for BC, the BCBC forecast in February – 1.3% to 1.5% growth in 2020 – has now reduced to 0.7% to 0.9%.

Restaurants and tourism related businesses are expected to be hard hit, as people avoid public spaces. On Thursday, the provincial public health office recommended that all concerts, conferences or other gatherings with more than 250 people be cancelled.

“The steps being taken to keep you safe have an economic impact,” Trudeau said. “But what is also true is that we are in the enviable position of having significant fiscal firepower available to support you.”

Trudeau said the federal government will provide financial support to workers who are forced to take time off work.

"We will also look to help small and medium-sized businesses that will be facing a number of difficult weeks as we respond to the threat of this virus," Trudeau said.

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