Floods, fires and storms have been held responsible for economic fallout in Canada with economic fallout and natural disasters very much related. History shows disasters hurt economy. This is the reason economists are watching the raging wildfire near Fort McMurray very closely. The fire has led to evacuating a whole city and the shutting down of operations of the Shell Corporation. What effects it will have on the overall economy is hard to say now, but if we look at history the question can be answered in part.
A similar event known as the Slave Lake wildfire happened in 2011, it caused the production of oil to drop by five percent, having a major impact on the country’s economy. The Slave Lake fire was much bigger than the Fort McMurray wildfire, but the dynamics have changed and one of them is the population. The population of Fort McMurray which was evacuated is 80,000 as compared to the town of Slave Lake whose population was merely 7000. So, the current wildfire affects more people and hence may prove to have a bigger impact.
The first thing which will affect the economy is oil production. Shell has a big oil refinery in Fort McMurray, and this is a major concern. It has already affected an area of 241,000 hectares, but hopefully it is now under control. It will surely have a major impact on the regional economy and the environment. Fortunately history has also shown us the the economy has bounced back after a small period of fallout.
Hopefully, the same will happen again.