Alberta’s EI increase mainly due to Fort McMurray wildfire: Edmonton’s chief economist

Alberta has experienced its largest one month increase in the number of people receiving employment insurance benefits in seven years.

According to Statistics Canada, there were a total of 77,800 people receiving EI benefits in May, which was an increase of 8,400 or 12.1 per cent from April, the largest jump since June 2009.

The historic increase came largely because of what’s happened in the Regional Municipality of Wood Buffalo, which includes Fort McMurray. The number of beneficiaries in the region more than doubled from 1,900 in April to 4,500 in May.

READ MORE: Feds make EI claims easier, faster for Fort McMurray fire evacuees

In early May, wildfires forced the evacuation of Fort McMurray and the shutdown of numerous oilsands operations. The Conference Board of Canada estimated wildfires resulted in the loss of 1.2 million barrels of oil per day for a two-week period in May, translating into $985 million in lost gross domestic product.

John Rose, chief economist for the City of Edmonton, agreed that there is some distortion in the Stats Canada numbers.

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“We have to be very careful about interpreting these numbers – particularly in light of the fires in Fort McMurray. Those have obviously distorted the numbers, not only for Fort McMurray but for the province as a whole,” he said.

Rose said many people who worked in Fort McMurray had permanent residency elsewhere in Alberta and Canada, which needs to be taken into consideration.

“That distorts where the employment numbers appear and where the unemployment numbers appear and, in this particular case, where applications for employment insurance show up.”

Tweet This Click to share quote on Twitter: "That distorts where the employment numbers appear and where the unemployment numbers appear and, in this particular case, where applications for employment insurance show up."

READ MORE: Nearly $1B of oilsands production lost due to Fort McMurray, Alta., fire: report

Edmonton experienced an increase of 8.4 per cent of EI beneficiaries while Calgary saw a jump of 6.8 per cent between April and May.

However, Rose said the rise in the Capital Region needs to be taken with a grain of salt.

“Part of the rise, part of that 8.4 per cent increase in Edmonton is reflective of the fires in Fort McMurray,” he said.

Tweet This Click to share quote on Twitter: "Part of the rise, part of that 8.4 per cent increase in Edmonton is reflective of the fires in Fort McMurray," he said.

The number of beneficiaries in Alberta is up 58.6 per cent from a year earlier.

Rose said the outlook for Alberta as a whole is not positive. He expects the provincial economy to contract again in 2016 due to continued weakness in the manufacturing, logistics and construction sectors.

He said the Edmonton area has seen some employment gains, which he said is because the city is not as exposed to the energy sector as Calgary. Rose also expects the Capital Region to experience some growth in 2017.