REGINA — The wildfires impacting northern Saskatchewan will have a major economic impact, in addition to the damage done to homes, buildings and peoples’ lives.
“Obviously it would come as no surprise that, to me, you're looking at financial and emotional impacts that are far-reaching, extensive — that to me reach a lot of fabrics in society in this province,” said Keith Willoughby, Dean of the Edwards School Of Business, University of Saskatchewan.
SASK TODAY turned to Willoughby to find out what the overall economic impact would be on Saskatchewan of such a wide scale event. He pointed to both direct as well as less-direct impacts.
“Obviously, you have the direct costs associated with businesses that are destroyed, homes that are burnt, maybe some resort areas that are impacted. You've got roadways that are being damaged.
“And also, to me, you're going to look at – it's going to have an impact on supply chains in terms of getting products to communities. It might take trucks longer to get to those destinations if they need to take detours. So to me, you've got a situation here that has a tremendous impact both on the direct costs associated with people, with products, with businesses, organizations, but also the indirect costs associated with all the things that go on in our economy.”
Beyond that is the “emotional impact on people, which is significant but sometimes hard to measure.”
As for what the price tag might be, Willoughby said he would be “comfortable saying you're looking at… a half-a-billion-dollar price tag associated with the destruction that we've seen thus far in the wildfires this season in Saskatchewan.”
As for why that $500 million number, Willoughby admits it is challenging to give an exact number given that we were still in the wildfire season. But he did point to numbers from other major wildfire situations the country faced.
He noted the Insurance Bureau of Canada put the price tag for the Jasper wildfires “at about $1.2 billion. That was just the insured damages of the Jasper wildfire.”
“If you dial back about a decade to the Fort McMurray wildfire, which was one of the most costly natural disasters in Canadian history, the insured damages there for the Fort Mac wildfire were about $3.6 billion. Again, those are the insured damages.
Public Safety Canada, I believe, issued a report and outlined that the direct and indirect costs of that disaster were almost $10 billion.”
He also pointed to the British Columbia situation in 2023. “If you look back at those three situations, the British Columbia in 2023, Jasper in 2024, Fort Mac in 2016, you've got billion-dollar price tags associated with these disasters.”
“That's why I think in Saskatchewan right now, to me comfortably, at a half a billion dollars,” said Willoughby. “It shows that the rest of us here in the province that when you get wildfires, there is a huge financial cost associated with it because of the impact on the economy, the impact on people's jobs that depend upon forestry. Those are sort of some of the markers I would look at… in trying to identify what would be those data points to really demonstrate what might be the ultimate price tag for the Saskatchewan wildfires this season.”
That’s just the across-the-board impact. For government, it costs money just to fight the wildfires.
“I believe it's about annually the country of Canada spends about a billion dollars a year fighting wildfires. So if you think of Saskatchewan, I don't know, being maybe a tenth or 15 per cent of that, you're looking at over $100 million that the province is investing to fight wildfires.”
Add to that government payments to displaced residents, and that would be “a situation where the full impact would be felt later on.” But Willoughby pointed to the challenge the government would face if revenues from the forestry industry were to take a hit. “I think that's a situation where it could spell some concerns for provincial budgetary situations.”
Of all the economic sectors, the forestry sector is at the top for taking a direct impact.
“Obviously, you put forestry at the top because there's thousands and thousands of jobs in this province, the women and men who are employed in the forestry sector. If you have a wildfire, obviously it puts workers at risk. It puts the mills at risk in terms of access to forestry operations.”
Another sector that is likely to be dealt a blow is tourism, particularly hunting and fishing in northern Saskatchewan.
“If you look at Saskatchewan, the tourism opportunities that people have with northern Saskatchewan fishing destinations, whether it's bringing people here from Saskatchewan going north up to cabins or other situations, or even bringing international people into the province, I think that's an area where tourism could have a serious impact.”
Also seeing an impact is health care in the province, and the impacts of poor air quality from the smoke. “Will it lead to health care visits? Will it lead to people's health being compromised at this special season of the year?”
As for the mining industry, which sees many mining operations in northern Saskatchewan, Willoughby sees less of an impact as their workers are able to fly in and out and reside safely there for two-week shifts at a time.
“But if it turns out that there's – whether it's access to those runways for the airports or the planes to use, or if there's trucks that can't get access to those destinations, to those mines, then I think you would see a ripple effect with the mining operations,” Willoughby said.
But if access to roadways or to mining zones is impacted in terms of planes that can't land or trucks that can't get in, that would be a major issue.
“Right now, I don't see it as being tremendously impactful yet. But again, we're only in the middle of June. So if this were to continue again for the next few weeks, and if it especially has fires that are in the immediate vicinity of any of our wonderful mining operations, I think that's when those situations begin to be put at risk.”
The most obvious direct economic impact would be to those who lost individual businesses, such as the stories of some businesses that burned in the La Ronge area.
Willoughby said insurance can help those businesses be rebuilt and get back to operating again.
“But the challenge is, for those communities, often maybe there's only a couple of main stores that a company might have, that a city or a town might have,” Willoughby said.
“So to me, it really limits access to products for people when those stores are out of commission. And it also, I think, just emotionally impacts the community because the heartbeat of the town isn't there when businesses are lost. So it's a situation where I see, obviously, there's a way out for businesses to be rebuilt because of insurance dollars. But I really hope, maybe as a citizen of the province, that it doesn't spell doom for businesses and organizations in those communities because the residents in those communities depend upon those businesses for access to products and goods.”
As for the insurance industry, a question becomes how that industry will be impacted by having to pay out to cover insurance damage lost to wildfires.
Willoughby doesn’t think insurance companies will be put out of business by the wildfires, but says that if wildfires end up “being this annual cycle of occurrence, that this is the new normal for the northern areas of these provinces in Canada, from a business perspective, insurance companies are going to need to reflect that in ongoing premiums.”
While the direct impact of wildfires is felt the most in the Northern communities like La Ronge, Creighton and Denare Beach, Willoughby points out that the economic impact is felt by the whole province.
”You begin to now realize that when you've got these vast areas in the north, that I think you see the interconnectivity of the entire province. That when this one area is hurting, I think we in the larger urban areas, we are not immune to the impact,” said Willoughby.
“And so that's where, from whether it's the insurance side or the cost of rebuilding or the likelihood of towns being impacted, I think it, that's where that, to me, that half a billion dollar price tag, again, it impacts government, it impacts the people obviously directly affected, but I think by extension, I think all of us sort of end up being exposed to the burden.”
If there is any bright spot, there will be rebuilding that occurs and Willoughby points to the strength and generosity of Saskatchewan people.
“I think what I see, and you've seen it in different charities or organizations raising funds — I think we in Saskatchewan, we are resilient,” said Willoughby.
“…I think what I like seeing is, at the end of the day, for people in Saskatchewan, that there's kindness amid the chaos. That there's chaos happening in our province and it's impacting all of us. But it's heartwarming to see that there are people who are willing to help out their fellow citizens. I think maybe that's, if there's any bit of a good feel to this oppressively negative story, maybe that's the one area where it's a bit encouraging.”
