CALGARY — A new assessment of the economic impact of the Fort McMurray wildfires says close to $1 billion of oilsands production has been lost.[np_storybar title=”What’s next for Fort McMurray and its oilsands: a long and costly rebuild” link=”https://business.financialpost.com/news/energy/whats-next-for-fort-mcmurray-and-its-oilsands-a-long-and-costly-rebuild”%5DIt’s been 12 days since the fire forced the evacuation of 94,000 people, shut down half the region’s oil production, and destroyed 2,400 homes and businesses. Read on [/np_storybar]The Conference Board of Canada estimates that the fire in northeastern Alberta resulted in a loss of 1.2 million barrels of oil per day for two weeks, translating into $985 million in lost gross domestic product.That represents about 0.33 per cent of Alberta’s projected GDP this year and 0.06 per cent of Canada’s projected GDP.Twelve oilsands operations were shut down and several more curtailed output this month because of the wildfire that closed pipelines and forced the evacuation of more than 80,000 people from the area.The Conference Board based its estimates on the assumption that most oilsands operations are active again by the end of the month, though that was before a new evacuation was ordered Monday that covered several oilsands sites.The board estimates that the wildfire will reduce GDP growth in Alberta by one per cent in the second quarter but that will reverse into a one per cent gain in the third quarter as oilsands production resumes and rebuilding begins.Thousands of oilsands workers evacuated as blaze nears Enbridge oil terminalBig banks shave 2016 GDP outlooks in wake of wildfireOilsands outage costing $70 million a dayAbout 2,400 structures in Fort McMurray were destroyed by the wildfire, including 1,600 homes.The board expects rebuilding efforts to add roughly $1.3 billion in real GDP to Alberta’s economy next year and construction in the region is expected to be higher than normal in 2018 and possibly 2019.Last week, several banks lowered their national 2016 real GDP projections by 0.1 to 0.2 percentage points because of the wildfire.
Canada should hold off on changes to make homebuying more affordable but should speed up efforts to reduce trade barriers within its borders, advises the International Monetary Fund.The organization calls for policies that focus on ensuring a sound financial system, enhanced co-operation between federal and provincial governments and structural reforms that target productivity growth in a wide-ranging report by staff following an official visit to Canada.“The Canadian Free Trade Agreement signed in 2017 provides a platform for co-operation in reducing internal trade barriers, but several problematic aspects need to be resolved,” the report released Tuesday notes, calling for clear targets to cut exemptions and reconcile regulatory regimes. Scrapping mortgage rules would boost Canadian home prices by about $32,000, TD says Mortgage stress test is keeping Toronto home buyers on sidelines, says real estate board Don’t kill the mortgage stress test — modify it: CIBC’s Benjamin Tal “The potential gains are sizable and could increase real GDP by almost four per cent — a much larger gain than expected from recently signed international trade agreements.”Real gross domestic product growth is projected to decline to 1.5 per cent in 2019, the IMF says, but is expected to pick up again in 2020 as the economy recovers from last year’s slowdown in oil-related activity.Over the medium term, low productivity growth and population aging will limit potential growth to around 1.7 per cent, it says.The forecast for 2019 matches Bank of Montreal’s forecast from last month. Statistics Canada said the growth rate in 2018 was 1.8 per cent.The IMF report comes on the heels of Conservative Leader Andrew Scheer’s pledge last week to rework the Liberal’s mortgage stress test to make home-buying more affordable for Canadians if he forms government.The IMF, however, says it would be “ill-advised” to stimulate activity in the housing sector, suggesting Canada aim instead for a gradual slowdown in overheated real estate markets to reduce risk to the economy.“The government is under pressure to ease macroprudential policy or introduce new initiatives that buttress housing activity,” said the IMF in its report.“This would be ill-advised, as household debt remains high and a gradual slowdown in the housing market is desirable to reduce vulnerabilities.”The tightened mortgage rules, brought in by Finance Minister Bill Morneau, mandated that would-be borrowers undergo a stress test to determine whether they could still make payments if faced with higher interest rates or less income.In a report last month that calls for a rethinking of the mortgage stress test, CIBC economist Benjamin Tal estimated the measure accounted for more than half of a $25-billion or eight per cent drop in new mortgages started last year.