A report says Alberta will see $5.3 billion injected into the economy over the next three years, thanks to rebuilding efforts in wildfire-ravaged Fort McMurray.
But despite the economic boost, the board warns the legacy will be more government debt and the possibility of higher insurance rates as the industry looks to recoup losses.
The Conference Board of Canada says the ramp-up to rebuild hundreds of homes and businesses is expected to create about 9,000 jobs next year and boost the province’s gross domestic product.
“When we look at the impacts in 2016, there’s production losses that we just talked about in terms of the oilsands. That comes in as a negative to income and GDP,” Conference Board of Canada deputy chief economist Pedro Antunes said.
“But there is a lot of offset to that as we mentioned. In fact, some of the rebuilding effort is already starting. We know the firefighting effort transfers to households for their living expenses. All of this actually adds, but it’s not enough to offset the negative in 2016.”
Insurance companies and governments will bear the brunt of the cost. The report estimates $3.6 billion in claims will significantly boost consumer spending, construction, and other economic activity in Fort McMurray and throughout the province.
The temporary shutdown of oilsands production created losses of around 47 million barrels and cost producers $1.4 billion in revenues in 2016.
“It’s important to note though that production has come back to more or less normal levels and so we’ll see that added to production in 2017.”
© 2016 The Canadian Press