The weeks-long wildfires tearing through Alberta and British Columbia are taking their toll on regional operators and the country’s tourism industry. Even as officials battle to bring fires down, others are working to maintain Canada’s appeal as a vacation destination. Below, we look at the heavy burden of fighting domestic disaster while keeping up global appearances.
Up top
- Dodging penalties: Pump-and-dump scammers can avoid paying multimillion-dollar penalties by declaring bankruptcy, the Supreme Court of Canada has ruled. Jameson Berkow reports on a stunning reversal of two lower-court decisions that places substantial limits on the enforcement powers of market watchdogs across Canada.
- Testing the market: Toronto-based waste management company GFL Environmental Inc. is ruling out a sale of the entire company to private buyers, but is considering running an auction for its environmental services division. Tim Kiladze builds on The Globe’s scoop over its buyout plans in June.
- Losing power: Lion Electric Co. shares continued a collapse after the Canadian maker of electric school buses and trucks announced it would cut another 30 per cent of its workforce. Nicholas van Praet wrote in depth last year on one of Quebec’s big industrial hopes in the shift to electric vehicles.
- Holding steady: The U.S. Federal Reserve decided to keep its key rate at a 23-year high of 5.3 per cent. Republicans, including former President Donald Trump, have argued that a rate cut before the November election would appear politically motivated. Financial markets are putting the odds of a cut in September at around 100 per cent. My analysis: September comes before November.
In focus
The spreading cost of Canada’s wildfires
A plume of smoke from a wildfire in Jasper is seen from a satellite image taken on July 23.Wanmei Liang/NASA
First, some earnings of note: Intact Financial reported yesterday that it saw a jump in profit as the industry continues to raise the cost of home and auto insurance premiums as a result of rising natural disaster claims.
As Clare O’Hara reports, Canada’s largest property and casualty insurer is acutely aware of just how much circumstances are changing.
- Over the past 15 years, disaster claims in Canada have more than quadrupled, accounting for $3.1-billion of insured losses in 2023. That is up from just $400-million in 2008, according to the Insurance Bureau of Canada.
- Intact paid out more than $1-billion in natural-disaster claims last year, with a significant portion related to wildfires.
- The increase led the company to take pause and study the impact a three-to-five-degree global-warming scenario could have on the business.
The company said its adjusters have not yet had direct access to the Jasper township and it is focused on contacting clients from the area to offer help in their temporary relocation process.
In the meantime, there are other ways we can try to quantify the damage wrought by the wildfires: lost homes, lost businesses, lost tourism revenue, and the cost of building it all back.
And then there are the less visible prices we pay, Jeffrey Jones and Emma Graney report. The damage to the country’s image on the global stage is one thing. But there is also the increasing threat of climate change to iconic destinations like Jasper.
A wider reckoning
Bala Nikku, an expert in disaster science, said the economic cost goes beyond tourism and infrastructure.
- Disasters like wildfires inflict social, cultural and spiritual damage.
- Mental-health issues could emerge as jobs, homes and businesses are lost.
- Smoke that fans out across the continent could have widespread effects on air quality and agriculture.
Canada’s global appeal
The tourism industry is well aware that travellers are thinking twice about summer vacations in mountain destinations. The Jasper disaster threatens to scare away visitors as images of fires are circulated around the world.
It really does have a bigger impact on the international visitation than it does on Canadian tourists. But it’s also devastating at the local level.”
— Beth Potter, CEO of the Tourism Industry Association of Canada.
The challenge for the association and the industry is reminding travellers that Canada is more than just a winter or summer destination, and promoting tourism for all 12 months, Potter said.
None of this is to say more traditional costs should be ignored. And none of this is to say those costs are unique to one region.
In Alberta
- The costs related to wildfires have risen over the past several years, according to the province’s finance ministry. The 2023/24 season set a record at roughly $1.1-billion.
- Visitors to Alberta’s Rocky Mountains spend billions of dollars each year. Most of them come from the province or other parts of Canada, though international tourists also descend on the region and spend millions on hotels, food, tours and souvenirs.
Across Canada
- The costs of weather-related disasters and catastrophic events have amounted to around 6 per cent of Canada’s annual GDP growth, according to the Canadian Climate Institute.
- The national tourism industry generates $130-billion a year in receipts, and accounts for one in every 10 jobs.
- In the insurance industry, nine out of the 10 most costly years in Canadian history have occurred since 2011.
Around the world
- Vacationers in Spain, Italy and Greece have been put on high alert over “extreme” risk of wildfires as a heat wave blankets Europe.
- In the U.S., fires are spreading across California, levelling more than 360,000 acres and reportedly destroying the historic mining community of Havilah.
- A wildfire in Oregon grew so big that it developed its own weather system. A weather system that included a fire tornado.
In an analyst call on Wednesday, it wasn’t immediately clear whether Intact Financial chief executive Charles Brindamour was referring to his company or Canada when he said recent climate events across the country have shown that “we need to double down on our climate adaptation.”
But he might be right either way.
The lookout
On our radar and reading list
In private: Canada’s privacy commissioner is launching an investigation into a Ticketmaster data breach.
In public: Earnings include Gildan Activewear, BCE, Cenovus, TC Energy, Apple, Amazon.
In the corner office: Richardson Wealth’s chief operating officer Dave Kelly will take over as the wealth manager’s chief executive in October as Kish Kapoor announces his retirement.
Up, down, up, down, up, down, up, down: If you’re nodding your head in comprehension, you might be watching your AI stocks too frequently.
Morning markets
Global markets were mixed, with big tech earnings and central banks in focus after U.S. Federal Reserve suggested rate cuts could come soon and the Bank of England elected to lower interest rates.
Wall Street futures pointed up while TSX futures were negative.
Overseas, the pan-European STOXX 600 was down 0.23 per cent. Britain’s FTSE 100 rose 0.29, Germany’s DAX decreased by 0.79 per cent and France’s CAC 40 lost 0.84 per cent.
In Asia, Japan’s stock index tumbled as the U.S. dollar sank against the yen, with the Nikkei closing down 2.49 per cent. Hong Kong’s Hang Seng lost 0.23 per cent.
The Canadian dollar traded at 72.36 U.S. cents.