Canada has fiscal room to tackle impact of US tariff, finance minister says
2:52 pm Thursday, December 19th, 2024
OTTAWA (Reuters) – Canada’s new Finance Minister Dominic LeBlanc said the country’s financial reserves are enough to support businesses and individuals if the United States imposes a major new tariff.
U.S. President-elect Donald Trump has vowed to impose a 25% tariff on all imports from Canada and Mexico on his first day in office on Jan. 20 if those countries do not clamp down on illegal migration and what he calls a flow of drugs across the borders.
“I am reassured that the government has the fiscal room if there’s a decision that has to be made to intervene significantly,” LeBlanc said in a podcast on Wednesday, referring to his discussions with Finance Ministry officials.
LeBlanc assumed the role after his predecessor, Chrystia Freeland, stepped down on Monday, citing differences with Prime Minister Justin Trudeau on managing finances, including her concern about having enough fiscal reserve to soften the impact of a U.S. tariff.
“I don’t think any responsible government would allow the economy of the country to be permanently scarred by what is a decision of another government,” LeBlanc said, adding that he would meet with Bank of Canada Governor Tiff Macklem and commercial bank CEOs in the coming days.
LeBlanc did not elaborate on what specific support the government might be contemplating.
LeBlanc, who is also public safety minister, said he has had discussions with Trump’s pick for Commerce secretary, Howard Lutnick, and hopes to have further talks with him before the new year to discuss border issues.
Earlier this week, LeBlanc and fellow ministers announced a plan to beef up the U.S.-Canada border with helicopters, drones, surveillance towers and sniffer dogs, as well as a joint strike force to target transnational organized crime.
(Reporting by Promit Mukherjee; Editing by Rod Nickel)
