The burgeoning reconstruction efforts in the wake of the massive Fort McMurray wildfire earlier this year will boost the Albertan economy over the next few years, but the rebuild of the affected regions will cost approximately $5.1 billion.
The Conference Board of Canada said on Tuesday (November 15) that around $3.6 billion of the reconstruction funds will be coming from insurance payouts, while governments will shoulder $1.5 billion, mainly spent in firefighting and relief.
Overall, this spending is predicted to inject $1.1 billion (around 0.4 per cent) into the provincial fiscal system next year. The Albertan GDP is further projected to grow by 0.2 per cent in 2018 and 0.1 per cent in 2019 as a result of the rebuilding, The Canadian Press
However, contrary to expectations, this will not herald a revitalization of Alberta’s beleaguered economy. The Board hastened to warn that losses from halted petroleum production amounted to more than 47 million barrels and $1.4 billion in potential income, costing the provincial GDP around $456 million (0.1 per cent) this year.
Between 2016 and 2019, the stoppage in oil production will cost the province $25 million in royalties and $58 million in corporate income tax.
“The true cost of this tragedy is its effect on people’s lives — the loss of personal items and homes — and livelihoods,” the Board stated.
“While rebuilding and replacing lost assets will generate economic activity, this doesn’t suggest that Canadians in general or Albertans in particular will be better off economically.”