By: Laura Steiner
Finance Minister Bill Morneau began outlining a package of financial measures designed to stabilize the Canadian economy as the country battles COVID-19. The announcement was made in a rare appearance with Bank of Canada Governor Stephen Poloz, and the Superintendent of Financial Institutions Jeremy Rudin.
“We will take every necessary step to give you confidence,” Morneau said. The measures include the establishment of a Business Credit Availability Program in order to support private sector financing through the Business Development Bank of Canada (BDC) and Export Development Canada. Approximately $10 billion will be made available through this program.
The Office of the Superintendent of Financial Institutions (OSFI) is lowering the Domestic Stability Buffer requirement for domestic systemically important banks by 1.25%. The OSFI is committed to being a risk-based and agile regulator that calibrates responses that are fit for purpose,” Rudin said. This will increase lending power by approximately $3 billion.
Bank of Canada Cuts Rate by 50 basis points
Bank of Canada Governor Stephen Poloz announced a rate cut of 50 basis points leaving the overnight lending rate at 3/4 of a percent. “Combined with the other measures announced today, lower interest rates will help to support confidence in businesses and households,” Poloz said The bank will also establish a Bankers’ Acceptance Purchase Facility designed to help small and medium-sized business.
“The government is preparing a significant stimulus program to stabilize our economy, support businesses and protect Canadians,” Morneau said. He will be announcing further measures next week.
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