Saskatchewan Faces $300 Million Flood Repair Bill: TD

Agriculture hit hardest, but home, infrastructure repair bill is high.

Rebuilding homes, businesses and infrastructure damaged by flooding in Saskatchewan will cost an estimated $300 million, according to analysts at TD Financial Group.

The early summer flooding hit the province’s agriculture sector the hardest, but fixing buckled highways and bridges; repairing and rebuilding damaged homes and replacing their contents will likely hit the $300 million mark, a new TD Economics report reveals.

Heavy damage to the agriculture sector–including washed out crops and fallout from unseeded acreage–will also take a heavy toll on Saskatchewan’s economy, writes Dina Cover, a TD economist, in the report, Economic Impact of Flooding in the Prairies.

“Lower farm incomes could trickle through to other parts of the economy,such as less consumer spending, which could lead to a slower pace of consumption growth in the province,” the report states.

“In fact, with agricultural output falling by nearly a third, and taking these indirect effects into account, real GDP could drop by about 2%.”

Crop insurance mitigates loss

Crop insurance and roughly $450 million in government aid will soften some of the impact on the GDP, but “we expect the net impact of the flood to shave about 1.1 percentage points from real GDP growth this year,” Cover writes.

“However, assuming that normal growing conditions return next year, the province will likely see a larger bounce back in economic growth.”

The report also says reconstruction and rebuilding in the province will help mitigate any economic slowdown caused by the crop damage, noting,”the construction activity, as well as the retail sales industry (durable goods in particular) is likely to pick up in regions that were hit by the flood, providing a boost to economic growth that otherwise would not have occurred.”

Copyright © 2017 Transcontinental Media G.P.
Transcontinental Media G.P.