March 10, 2020 / 7:20 PM / 24 days ago

UPDATE 2-Canada government to help provinces fight coronavirus outbreak -source

(Recasts with government set to announce aid for provinces; adds Air Canada suspending service to Italy)

By David Ljunggren and Kelsey Johnson

OTTAWA, March 10 (Reuters) - The Canadian government will announce on Wednesday a series of measures to help provinces across the country deal with the worsening coronavirus outbreak, a government source said on Tuesday.

Canada this week reported its first death from the virus. The number of cases is now more than 80.

Prime Minister Justin Trudeau is to speak to reporters at 9 a.m. Eastern (1300 GMT) on Wednesday, said the source, who requested anonymity given the sensitivity of the situation.

Healthcare and social assistance programs in Canada are administered by the 10 provinces, some of which have already requested support from Ottawa.

"We're making sure all the provinces have the help they need. This is about the resiliency of the economy and our healthcare system," said the source, who did not give details.

The Liberal government has already said it is contemplating a boost in employment insurance for workers who have to stay home and help for vulnerable sectors such as the energy and tourism industries.

"We recognize that there are going to be significant economic impacts for Canadians, for workers, for businesses," Trudeau told reporters earlier in the day.

Tourism Minister Melanie Joly said Ottawa was looking at how it could mitigate the impact on airlines.

Carriers around the world have eliminated flights or modified services. Air Canada has suspended flights to Beijing, Shanghai and Hong Kong, and on Tuesday said it would temporarily halt service to Italy.

Joly said she had spoken to the chief executive officers of Air Canada and WestJet - Canada's second biggest carrier - to get a better idea of the challenges they face.

A growing concern is that this week's oil price slump will further undermine growth. Canada sits on the world's third largest proven oil reserves, and the crude price crash has badly hit the western energy-rich province of Alberta. Premier Jason Kenney on Monday said he was looking for help from Trudeau.

Deputy Prime Minister Chrystia Freeland said she had spoken to U.S. Secretary of State Mike Pompeo on Monday "about how the North American oil and gas sector needs to be supported by our countries, which it is."

Goldy Hyder, president of the Business Council of Canada lobby group, urged Ottawa not to spend too much, given the uncertainty around the economy.

"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." (Reporting by David Ljunggren and Kelsey Johnson; Additional reporting by Steve Scherer in Ottawa; Editing by Philippa Fletcher and Leslie Adler)

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