Alberta Floods to Cost Economy $2 Billion
If there were ever a doubt about Calgary's significance to the Canadian economy, the devastation of 2013's early-summer flooding has put it into sharp focus.
The floods will reduce Canada's economic output by at least $2 billion in June alone, and its effects will reverberate through the next two fiscal quarters and beyond, experts say. Our city normally contributes about 6.5% of Canada's gross domestic product.
BMO Capital Markets economist Benjamin Reitzes says the country's GDP will take at least a 0.1 percentage-point hit from the loss of business caused by the flooding, which brought downtown commerce in our city to a complete halt for at least two working days plus a weekend.
"The longer this goes on, the wider the devastation," Reitzes added.
These numbers do not take into account the cost of damage, only the amount of business lost during the shutdown. In fact, the economic activity created by the rebuilding effort will actually provide a temporary boost to the GDP. Damage costs from the flooding are estimated to be between $3 billion and $5 billion.
Meanwhile, an Ontario disaster analyst says the devastation from the floods could have been lessened had governments acted on a report generated after the last major flood in 2005.
"The first line of the report said that there was the risk we could have an extreme rain event again. And that is exactly what we are going through right now," says Paul Kovacs, executive director of the the University of Western Ontario's Institute for Catastrophic Loss Reduction.
The Alberta government commissioned the Provincial Flood Mitigation Report following the 2005 floods, at the time considered the worst natural disaster in the province’s history.
The report, which called for about $300 million in flood mitigation work across 54 municipalities, was completed in November of 2006, then shelved until July 2012. Municipal Affairs Minister Doug Griffiths says even if its recommendations had been implemented, the damage from the 2013 flooding wouldn't have been prevented. But Kovacs says the harm could have been greatly reduced.