The bank's economic unit estimates that between $500 million and $1.5 billion will be subtracted from Alberta's output this month — about 0.3 per cent of the province's GDP — but predicts that shortfall will be made up in July.
The annual Calgary Stampede will be a wild card, it says, because flood damage to Calgary hotels may limit the number of visitors to the city, though that could be offset by increased support from Calgary residents.
On the whole, TD expects the flooding will have little impact on Alberta's oil and gas industry, which accounts for about 29 per cent of the provincial economy.
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It says Alberta's retail, wholesale, rail and utility services will likely suffer the biggest economic fallout from the floods.
TD Economics also says rebuilding efforts and increased government spending could actually boost Alberta's gross domestic product in the latter half of 2013.
As a result, the bank is increasing its growth forecast for the Alberta economy by half a percentage point to three per cent in 2013 and to between 3.5 and 3.7 per cent in 2014 from the 3.3 per cent it predicted earlier.
Ted Menzies, the junior minister of finance in whose riding the hard-hit community of High River is located, said that right now it is "very difficult" to assess the effect on the economy.
"It's pretty difficult to even have a handle on what the costs are," Menzies said in answer to a question from a reporter.
"We saw railroad cars that were standing on their side. We saw homes that were pushed off their foundations hanging in the river. I would suggest that no one actually has a number on this."
However, Menzies said there was "no doubt" that there would be an impact on both the Alberta and Canadian economies.
"(Finance) Minister (Jim) Flaherty is well aware of that," he said. "We've had discussions and it's going to be a challenge, but we will be shoulder to shoulder with the province to make sure whatever eligible expenses are there, whatever the costs are, whether it's infrastructure or whether it's uninsured homes, we will be able to support Canadians."
Asked if the floods would have an impact on his government's ability to balance the federal budget, he said it was "pretty premature to suggest that because we have no idea of the number."