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Morneau on Monday said they were also considering health transfers to the provinces, among other options, which would help cover increased healthcare costs.

Photo by ROBYN BECK/AFP via Getty Images

Any new fiscal spending from Ottawa is expected to take various forms.

“I think the range of instruments is going to be pretty broad,” said Kevin Page, president and founder of the Institute of Fiscal Studies and Democracy. He also stressed that Ottawa should act fast in its response.

“Timeliness is going to be important. If they want to get ahead of this, they’ll have to move quickly.”

Page said small business owners would be particularly exposed to the slowing economy, which will cause a temporary but sharp decline in the flow of liquidity.

“When things shut down people stop buying goods, companies have to close down for weeks on end, they might struggle to meet payroll,” he said. “So government is going to have to think about what kind of liquidity support they can provide, because if they don’t the recession is going to be that much deeper.”

Morneau on Monday reiterated claims that the federal government is fiscally well placed to address an economic downturn, a position widely supported by economists.

The comments echoed a speech Morneau delivered in Toronto last week, when he said the budget would address immediate healthcare concerns while also seeking to lower the federal debt as a percentage of GDP.

We’re going to look at the facts of the situation to determine the right response

The Liberals have regularly cited debt-to-GDP as a key justification for running consecutive deficits billions higher than initially promised, saying it proves fiscal discipline. Prime Minister Justin Trudeau initially promised to run deficits no higher than $10 billion and balance the budget by 2019.