Fort McMurray Fire's Economic Impact: $1 Billion In Oilsands Production Lost

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CALGARY -- A new assessment of the economic impact of the Fort McMurray wildfires says close to $1 billion of oilsands production has been lost.

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.

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Fire support crew extinguish a wildfire that erupted outside Fort McMurray, Alberta, Canada on May 11, 2016. (Photo by Amru Salahuddien/Anadolu Agency/Getty Images)

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.

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A Canadian Joint Operations Command aerial photo shows wildfires in Fort McMurray, Alberta, Canada in this image posted on twitter May 5, 2016. (Twitter via Reuters)

About 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.

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