12/23/2013 03:34 EST | Updated 01/23/2014 01:38 EST

Ice Storm 2013: Economic Impact Could Hit Retailers

As central Canada struggles to get back to normal following this weekend’s ice storm, some are already turning their attention to that burning question: What will this cost?

It’s too early to say for sure, especially given that the storm’s effects may not have played themselves out entirely just yet. One number we know for certain: It's costing Toronto Hydro $1 million per day to reconnect customers.

But the real impact could be felt at the checkout line. CIBC economist Benjamin Tal says retailers could get sideswiped by shoppers staying home on the last weekend before Christmas.

“While the timing of the storm suggests reduced pre-holiday spending, it is very likely that we will see above normal post holiday activity” as shoppers make up the difference later, Tal wrote in a client note Monday.

That, however, will depend on how long it will take for things to get back to normal in southern Ontario. More than 200,000 homes remained in the dark Monday morning in Toronto, even as another 100,000 got their power back. Across Ontario, some 340,000 homes were without power Monday.

Officials say power for some may not be restored until Boxing Day or later, potentially putting a damper on holiday shopping (not to mention people’s holidays).

The Retail Council of Canada is pushing municipalities to extend their working hours in the wake of the storm, warning that the holiday season is crucial for retailers.

December sales can mean the difference between ending the year in the black or the red,” the council said in a statement.

“Merchants across the affected regions are doing everything they can to service customers up to the close of Christmas Eve and again following the statutory holiday on Christmas Day.”

Sears and Target are among the retailers who have already announced plans for extended hours in the wake of the storm.

But overall, Tal expects the economic damage caused by the storm to be “negligible” — and it might even prove a positive, as reconstruction costs are in effect a kind of economic stimulus.

Tal notes that the legendary ice storm of 1998, which put large parts of Quebec and Ontario out of business for weeks, lowered Canada’s GDP by 0.2 to 0.3 percentage points. But repair activity after the storm added 0.1 per cent to GDP, offsetting some of the losses.

The Alberta floods earlier this year had a smaller impact on the economy than the ‘98 ice storm, shaving 0.1 to 0.2 percentage points off GDP, and Tal expects the impact of the ice storm to be even smaller.

“Accordingly, we do not view this storm as a major economic event,” Tal wrote.

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Ice Storm 2013