Will Alberta's Devastating Wildfires Bring the Canadian Economy to Its Knees? - Nathan McDonald

May 10, 2016

Many are calling it a "death blow" to Alberta's economy. The wildfires that have ravaged the province have been monstrous and of epic proportions. The horrific images of families driving through literal infernos to escape have been seen around the world and have made international news.

This fire has caused so much destruction and damage to those living in Fort McMurray and its surrounding area that it's turned the area into a ghost town, one that will be likely uninhabitable for large parts for years to come.

Another fear was whether or not these fires were going to wipe out large swathes of the area's oil production, finishing off any hope of recovery for the Canadian economy. Canada's economy has been utterly ravaged by the collapse in the price of oil over the past few years and appears to have no hopes of recovering if the fires destroyed these reserves.

Fortunately, the firefighters that have been bravely battling these flames were able to hold off the blaze and keep the fire away from strategic locations, saving this valuable commodity and lifeblood of the area.

Already this fire has wiped out over 1 million barrels of oil per day of production, which equates to about half of Canada's production in the oil sands region. A massive loss to say the least, but fortunately, only a small setback given the alternative.

Unfortunately, these losses are only going to get worse going into the future, as there is no clear target in sight as to when displaced workers and their families will be able to return to the area, causing production to remain at a standstill until then. The drinking water is undrinkable in Fort McMurray and the power grid has been largely destroyed.

For the province of Alberta, it is unclear whether this fire will bring the province to the knees, but for the area of Fort McMurray, it is most certainly a death blow that will be incredibly difficult to recover from.

For the economy of Canada, this natural disaster couldn't have come at a worse time. Already it is suffering from one of the most severe economic declines seen in its history and with this, it has only worsened.

The true damage and rippling effects of this chaos are yet to be seen, but you can bet they won't stay hidden for long.

You can help the relief efforts in Fort McMurray by donating to the Red Cross.