Insurance companies have been revealing the impact of the Fort McMurray wildfire over the last two months. Canada’s largest providers have been negatively impacted by the fire dubbed “The Beast”. Indeed, not a single insurer increased year-on-year through the second quarter because of the natural disaster.
The province of Alberta has also suffered in the wake of the Fort McMurray event. The government says that along with the low price of oil, the Fort Mac disaster means the province must be cautious with its finances.
“In the face of the oil price collapse and the economic impact of the wildfires, our government continues to take a prudent approach, controlling spending, protecting critical public services, and taking action to create jobs and diversify our economy,” Joe Ceci, Alberta’s finance minister and president of Treasury Board, says in an Alberta Treasury Board and Finance press release Tuesday.
“The steep and prolonged drop in oil prices continues to have a profound impact on Alberta’s economy,” adds Alberta’s 2016-17 First Quarter Fiscal Update and Economic Statement.
“This year, the impact has spread beyond the energy sector. Housing, retail activity, construction, labour markets and manufacturing are all showing significant signs of weakness,” the fiscal update continues.
Fort McMurray was ravaged by flames in May. The wildfire that swept through the Albertan town displaced 80,000 residents for weeks, destroyed nearly 3000 properties and caused over $4 billion in insurance loss damage. The result was the biggest insurance loss in Canadian history.
While the insurance industry was hurt, the province did not escape without loss. The government says the fire will cost around $500 million for 2016-2017 in terms of fiscal impact.
“Total expenses are forecast to increase due largely to the Wood Buffalo Disaster Recovery Program, additional disaster assistance and capital grants,” the ministry points out.
“With this and other changes, the deficit is forecast to be $10.9 billion, $527 million higher than estimated at budget,” the province continues.