Fort McMurray fires to generate 9,000 jobs, think tank says

Repairing damage from the Fort McMurray wildfires will boost economic growth and create an extra 9,000 jobs in Alberta this year, the Conference Board of Canada says.

But the most expensive disaster in the country’s history, expected to create $3.7 billion in claims for insurance companies, will also likely mean higher insurance premiums and larger government debt to cover the costs, board deputy chief economist Pedro Antunes said Tuesday.

“Nobody is better off following this fire. This is a huge cost to the economy, it’s a huge cost to household wealth, and it costs in the long term,” he said following a presentation to an Edmonton conference on preparing for natural disasters.

“(However), these monies that are essentially a cost, when you re-inject them back into the economy, they do drive economic activity … Our sense is that this is going to have an impact over the next few years as we rebuild Fort McMurray.”

Almost 45,000 personal and commercial insurance claims were made as a result of the fire, which will require $1.2 billion to rebuild and repair homes, and the purchase of 12,000 new fridges and freezers, Antunes said.

About 47 million barrels of oil production worth $1.4 billion was also lost.

Antunes expects the municipality will have about 800 housing starts in 2017 and in 2018, close to the numbers from the 2013 boom.

All this spending will create a total of 16,000 person-years of work by 2019, but once reconstruction is finished, employment in the province is projected to be at the same level it would have been anyway, he said.

“We were already expecting Alberta to come out of the recession with slightly positive growth in 2017. With the rebuilding in Fort McMurray, with the recovery of oil production … we expect to add 0.5 per cent (to gross domestic product).”

The Regional Municipality of Wood Buffalo isn’t the only place to benefit from the fire-related spending that will contribute to this year’s estimated 2.8 per cent rise in Alberta’s gross domestic product.

Edmonton hosted thousands of evacuees who rented hotel rooms and bought supplies in the city, and will be one of the supply centres for reconstruction, Antunes said.

“When you spend money in a region … it’s not just $1 spent. It will lead to other implications across the province.”

Municipal Affairs Minister Shaye Anderson told the conference the province is looking at building a new operations centre to better manage how it responds to disasters.

The need for a more modern nerve centre is one of the lessons learned from the fire, and while government staff did an excellent job, more preparation is needed in case something larger happens in future, he said.

The government expects a report by KPMG evaluating how it responded to the wildfire will be released next month, Anderson said.