As more than a few workers sit comfortably on their couch at home watching the snow fall Friday, their bosses might wonder how much a snowstorm like the one bombarding Ontario and Eastern Canada actually costs.
It’s a simple question with not-so-simple variables to factor in. Consider snow removal costs, lost man-hours as droves of workers stay home – some to work, others to pretend to do so.
Cancelled flights, meetings and interviews would all seem to present a drag on the normal drum beat of productivity.
Yet generally, economists say the impact of a blizzard, even one with the breadth of the current storm sweeping over north-eastern North America, is next to nil. Instead, the economic slack is usually made up for in the days after the snow’s been cleared.
“Most people who would shop today will shop tomorrow, economic activity increases the day after something like this,” Jack Carr, an economics professor at the University of Toronto said by phone.
“What happens is, people… make it up,” said Prof. Carr, who like many, finds himself snowed in, a flight to Boston to visit his grandchildren cancelled.
On a micro level, the costs are a little more visible. Removing all that white stuff can run a major centre like Toronto or Montreal several million dollars for the day.
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A city spokesperson for Toronto told Global News $4-million, or about 5% of the city’s snow-removal budget, has been allotted for the current bout of blizzards, which is expected to end sometime Saturday.
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More troublesome to the economy was the flurry of negative economic news the storm brought with it on Friday, including a jobs report that showed a slowdown in the job market in January and slump in new housing starts.
Economists and others say events like Friday’s snowstorm are far less damaging to the economy than a natural disaster like Hurricane Sandy – not only because the outburst is less powerful.
Cities and municipalities budget for expected weather events like snowfalls. Communities also have response plans in place, such as on-call snow removal personnel as well as stockpiles of salt and sand for roadways.
In contrast, rare and unanticipated storm systems such as the one that cut a swath across much of the U.S. eastern seaboard in late October take weeks if not months to recover from, denting economic output.
While many economists made downward revisions to their total U.S. GDP estimates last fall in the wake of Sandy, expectations for Ontario and Eastern Canada will be unaffected.
“It’s something that goes on every winter,” Prof. Carr said. “It’s part of the normal environment.”
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