forest fire in canada burnt 20 million acresThe smoke filled Canadian and American cities and raised health concerns on both sides of the border with no end in sight. The impact on the Canadian economy is just beginning to subside.
The fires have affected oil and gas operations, reduced available timber harvests, affected the tourism industry, and planted immense cost on the National Health System.
These losses are emblematic of the pressures being felt more widely as countries around the world experience disaster after disaster due to extreme weather, and they will only increase as the climate warms.
What had long seemed a distant concern has turned into stark relief in recent years, as smog blanketed vast swaths of North America, floods swept away neighborhoods, and heat waves knocked out power lines. Grids have been affected. It costs billions of dollars, and has long-term consequences, such as insurers pulling out of hurricane and fire markets.
in a while studies Did economic impact Due to rising temperatures, Canada appears to be in a better position than countries closer to the equator; Warming could lead to longer farming seasons and less harsh winters, making more places attractive to live. But it is becoming clear that the increasing volatility – snow storms, then fires, then intense rain and now hurricanes on the Atlantic coast, which have been unusual so far north – outweigh any potential gains.
“It’s happened much faster than we thought, even people are aware of,” said Dave Sawyer, principal economist at the Canadian Climate Institute. “You couldn’t model it if you tried. We have always been concerned about this escalation of losses, but it is very sad to see this happen.
However, Mr. Sawyer and his colleagues attempted to model it. one in last year’s report, they calculated that climate-related costs would add up to 25 billion Canadian dollars in 2025, cutting economic growth in half. By mid-century, they forecast 500,000 job losses, mostly due to extreme heat. lowers labor productivity And famine causes death. Then the cost of housing has increased, and higher taxes are needed to support government spending. repair the damage – especially in the northWhere roads and buildings are breaking due to the melting of permafrost.
It is too early to know the cost of the current fires, and the fire season is still several months away. But the consulting firm Oxford Economics Forecast This could shave 0.3 to 0.6 percentage points off Canada’s economic growth in the third quarter — a major blow, especially since hiring in the country is down. already slow And households have more debt and less savings than their neighbors to the south.
“We already think we are heading for recession, and that will make things worse,” said Tony Stilo, director of Canadian economics at Oxford. “If we see these fires actually disrupt transportation corridors, disrupt power supplies to large population centers, then you’re talking about much worse consequences.”
The overall economic strain is estimated on the damage caused to specific industries, which varies with each disaster.
recent fire some sawmills were abandonedFor example, since workers have been laid off. It is not clear how widespread the damage to forest reserves will be, but according to Derek Niebor, chief executive of the Forest Products Association of Canada, provincial governments tend to reduce the amount of timber they are allowed to harvest after major fires. Pine beetle infestations, which have increased as mild winter temperatures fail to kill the pests, have reduced harvests in British Columbia.
Although lumber prices have declined in recent months as higher interest rates hit homebuilding, Canada is facing housing shortage Because it serves to bring in millions of new immigrants. The reduced availability of wood will make solving its habitat problem more difficult. “It is safe to say that there is going to be a supply shortage in Canada as we are working on it,” Mr. Neighbor said.
The tourism industry is also being affected, as fires broke out when operators were heading into the crucial summer season – sometimes away from the fires. Business in the peninsular town of Tofino, a popular destination for whale watching on Vancouver Island, plummeted after a fire two hours away cut off its only highway connection. The road has since reopened, but only one lane at a time, and drivers have to wait up to an hour to pass through it.
Sabrina Donovan is the general manager of Pacific Sands Beach Resort and president of Tofino’s local tourism promotion organization. He said his hotel occupancy dropped from 85 percent to about 20 percent during June, and very few bookings were coming in for the rest of the year. Employers typically keep their employees home during the summer, but after several weeks without customers, many workers left for jobs elsewhere, making it difficult to maintain full service in the coming months.
“This most recent fire has been quite devastating for most of the community,” Ms Donovan said, noting that the coast has never had to deal with a wildfire in her career. “It’s something we now have to think about in the future.”
Regardless of the severity of a particular episode, the costs increase as disasters move closer to critical infrastructure and population centers. That’s why the two most expensive years in recent history were 2013, when major flooding in calgaryand 2016, when Fort McMurray fire It destroyed 2,400 homes and businesses and disrupted oil and gas production, the region’s main economic driver.
Most of the arson has happened in rural areas this year. Although some oil drilling has been disrupted, overall damage to the oil industry is minor. The biggest long-term threat to the industry is falling demand for fossil fuels, which could displace 312,000 to 450,000 workers over the next three decades. Analysis by TD Bank,
but is still There’s a long, hot summer ahead, And the insurance industry is on alert given the rising losses in recent years. Prior to 2009, insured losses in Canada averaged about 450 million Canadian dollars per year, and now they regularly exceed 2 billion dollars. Large reinsurers pulled out of the Canadian market after several hard payments, raising prices for homeowners and businesses. This is not even counting the life insurance costs due to respiratory illnesses related to the extreme heat and smoke.
Craig Stewart, vice-president of federal affairs for the Insurance Bureau of Canada, said climate issues have become a primary concern for the organization over the last decade.
“In 2015, we sent our CEOs across the country to talk about the need to prepare for a different climate future,” Mr Stewart said. “At that point, we saw the Calgary floods of two years earlier in the rear view mirror. We thought, ‘Oh, we’ll get another program in two to three years.’ We could never have imagined that now we are witnessing two or three catastrophic events per year in the country.
This is why the industry put a lot of pressure on the Government of Canada to come up with a proposal comprehensive optimization strategy, which was released in late June. It recommends measures to reduce the health effects of heat waves, such as investing in urban forests and developing better flood maps that help people avoid building in vulnerable areas. Fire and forestry experts have called for restoring the Forest Service decimated by years of austerity and raising limits on prescribed burns – all of which cost a lot of money.
Halifax Mayor Mike Savage doesn’t need convincing that the spending is necessary. His town was one of the worst-hit by fires this spring, with 151 homes burned down. disaster struck hurricane fiona last year, which submerged much of the coastline. Mr. Savage is concerned about the fate of the isthmus connecting Nova Scotia to New Brunswick and power systems that now peak in hot summers instead of cold winters.
“I certainly believe that when you invest in mitigation those investments make a dramatic positive impact,” Mr Savage said. “It is going to be a challenging time. To think that we survived this fire and say, ‘Okay, that’s cool, we’re done,’ that would be a bit naïve.
