March 10, 2020 / 3:52 PM / 25 days ago

Canada looking to 'mitigate' virus effects on airlines - minister

OTTAWA, March 10 (Reuters) - Canada is looking to soften the blow of the new coronavirus outbreak on airlines as part of Prime Minister Justin Trudeau’s efforts to support the economy as the disease spreads, a senior official said on Tuesday.

Canada on Monday reported its first death from the new coronavirus, as the number of people in the nation who have contracted the disease rose to more than 70.

When asked what the government could do to help airlines, Economic Development Minister Melanie Joly said: “What we’re looking at is how can we mitigate the impacts while making sure that we can have, still, a strong summer season and also that we can really bounce back.”

Airlines around the world have eliminated flights or modified services amid the outbreak. These include Air Canada , which has suspended flights to Beijing, Shanghai and Hong Kong.

Joly, speaking to reporters before a cabinet meeting, said she had spoken to the chief executive officers of Air Canada and WestJet - Canada’s second biggest carrier - on Monday to obtain a better idea of their challenges.

Finance Minister Bill Morneau said on Monday that some measures of support for Canadians and businesses affected by the virus would be taken this week. He also said the release date for the new budget would be announced soon.

Increasingly, economists see the budget being delayed and the deficit to be higher than previously expected, as the combination of the coronavirus and a slump in oil prices undermine growth.

“We have things right now on hand and we’ll go through this and we’ll be able to bounce back even stronger,” Joly said.

Goldy Hyder, president and chief executive officer of the Business Council of Canada lobby group, urged the government not to act too aggressively because of the uncertainty surrounding the current economic climate.

“To come out today with some massive spending program – what happens if it doesn’t work? What happens if things get worse? I do think the approach should be one of prudence,” Hyder said in an interview.

“I don’t think this is a ‘just carpet-bomb money out of the helicopter’ moment.” (Writing by Steve Scherer; Editing by Bernadette Baum)

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