Fort McMurray has historically been considered the centre of the Canadian province when it comes to economic drivers.
However, Alberta’s development was set ablaze.
Although the fire did not claim lives - at least not directly - this blaze caused the destruction of property worth an estimated $3.58 billion dollars.
The wildfires caused homeowners in the region to evacuate. Subsequently, project works ongoing at the famous Athabasca oil sands halted resulting in a total disruption of economic and social lives in the area.
This literally torched brighter, the already-flaming Alberta economy.
It is however wrong to attribute such economic drawbacks to only the Fort McMurray fires. The province which was experiencing a contraction of economy and low GDP rates only went further downhill after the fires with economists and analysts predicting further shrinking economical status.
This recession has seen an increase in unemployment, high prices of goods and services, lay-offs, budget cuts and tight spending in an an area whose GDP growth exceeded that of the whole country of Canada.
This economical situation poses great worry not only to the Albertan federal government but to the scores of unemployed people, investors and employers. With the government putting measures in place and the reconstruction of the charred Fort McMurray, residents of Alberta are in doubt as to when and how they are going to get their lives back on track and put such dark times behind them.
Projections by economists see little to no impact on these developmental and reconstruction plans on the economic growth of the province in 2016 but in 2017. In the latter year, a considerable and favorable growth-rate is expected as well as a standard of living increased.
Simply put, the general drop in prices of oil and gas within the last 18 months have heavily contributed to the Alberta recession. This economic phenomenon affected the growth of the Canadian province to a large extent. The mining of oil and gas provides the backbone of the Albertan economy, providing the country with its largest private sector investor, infusing almost $23 billion dollars into the economy.
The payment of corporate taxes, royalties, personal incomes, property taxes, land sales and other costs generated ample revenue to the Albertan and Canadian governments. It was therefore no surprise when a general drop in world prices for oil and gas saw the plummeting of the economy of the federal province of Alberta.
The investment in the oil and gas sector fell by a whopping $17 billion last year. An attempt to invest more to enable the resurge of the sector was not advisable as prices were predicted to stay low. This made employers to start employing harsh entrepreneurial policies to avoid going out of business cutting budgets, laying-off workers and among others, with workers having to deal with job insecurities. This strain on the country’s most supportive sector was bound to create a spillover effect on other sectors.
Tourism, entertainment, commerce and the others all had their fair share, with the continuous drop and no hope of an increase in fuel prices till 2017, the economy kept nose-diving.
Nevertheless, the economy kept holding up till disaster struck in early March 2016, when an unknown cause set the Fort McMurray area in the Alberta province, the area where major sand oils were mined.
Fort McMurray, an urban service area in North Alberta, which had become the center of the country’s petroleum industry went from a small town to a major municipal, which saw rapid developments as a result of their rich oil sands.
The boomtown experienced rapid population growths with the presence of mining prospects, high-paying jobs, amenities a serene and lively social environment. The fire which is believed to be of a human cause swept through the community, destroying an approximate count of 2,400 homes and buildings; spreading through 1,500,000 acres of land till it was declared under control on July 5, 2016.
This destruction necessitated the evacuation of the area and the pause of oil operations. The already down oil operations over the months experienced a further down-pull.
The destruction of homes and businesses in the area caused unemployment and homelessness. This affected the economy more and more.
Over the months, there has been reconstruction plans and activities to get the former residents back to their homes.
The reduction in fuel prices and the Fort McMurray wildfires affected employment to a great deal. While workers lost their jobs and livelihood, and job insecurity set in, employers and investors could not be blamed entirely. It was not advisable to keep a large workforce or inject money in a failing venture.
There is, however some light at the end of the proverbial tunnel. Projecting into 2017, with the reconstruction of Fort McMurray and oil productions back in operation, employment is expected to be created, however not at a faster rate.
Employers are predicted to employ a more manageable workforce till their former trust in the economy is restored. New websites such as Jobs in Fort McMurray are poised to simulate job activity in the area, and the economy of this Canadian province looks to experience an arguable 2.5% GDP growth and a more realistic 1.5%, both of which record an improvement over the previous year.
The prices of crude oil are also expected to recover after a two-year plunge which also provides hope for oil and gas professionals most importantly and other sectors, though it might take some time for the positive spillover effect to be felt. This is so because it is believed that the price of oil seems to be stabilizing in the $40 US range as global supply imbalances have started to dissipate.
This however does not mean a total economic rebound in 2017. It should be expected that the “healing process” which would eat well into 2017, 2018, 2019 and probably 2020, where a total rebound is more realistic.
Both the larger Canadian government and federal Albertan government are working to improve conditions as GDP is expected to fall by 2.5% in late 2016 and to prepare the nation and the province for better signs of development in 2017. Similarly, the Trudeau government promises to tackle employment with the Federal Labour Minister MaryAnn Mihychuk, promising to push ahead with the expansion of the Youth Employment Strategy and make improvements in the employment insurance system.
Projections into 2017 and beyond promises a better employment climate, filled with high wages, job security, and employment benefits. Also, oil prices are gaining solid grounds and Fort McMurray's reconstruction and further oil operations are likely to start.