A report on the economic impact of the 2017 wildfires shows that road closures, evacuation alerts, and evacuation orders had a bigger impact on local businesses than infrastructure loss or damage. It is estimated that the total direct economic impact was $31 million, with 100,000 work hours lost. Photo: Barbara Roden.

Report paints grim picture of wildfire impact, as area businesses take $31 million hit

Many businesses unaware of, or not accessing, available aid programs.

A report on the impact of last year’s devastating wildfires on the area’s economy has been released, and paints a grim picture of the effects. It also makes clear that many area businesses are unaware of, or have not accessed, recovery programs designed to assist them.

The report was prepared for the Thompson-Nicola Regional District (TNRD) by Colin O’Leary, who was hired as a Community Economic Recovery Manager and tasked with speaking with, and surveying, area businesses to assess the fire’s impacts, and what can be done to help businesses recover.

The report states that the estimated total loss of sales due to wildfires in the study area was more than $21 million. The estimated total lost hours of employment due to wildfires was almost 100,000 hours, resulting in a very conservative estimate of just over $1 million in lost wages. Thirty per cent of respondents indicated that they had to engage in some form of layoffs. Most businesses surveyed (nearly 75 per cent) have annual revenues below $250,000 per year, and 85 per cent of them have 10 or fewer employees.

The estimated total direct economic loss due to wildfires to date in the study area was almost $31 million; a number that is expected to grow. Forty-two per cent of businesses anticipate further economic loss in 2018 and beyond because of the 2017 wildfires. Some businesses are estimating, based on past experience, that tourism to the area will drop by 10 to 15 per cent for up to a decade.

“The biggest surprise for all of us was the extent of the economic impact,” says Debbie Sell, director of corporate services for the TNRD. “People started providing information about their financial losses, but we didn’t anticipate the extent until we saw the analysis.”

She adds that the losses were not primarily due to businesses losing infrastructure in the fire. “That’s not where the economic loss was. The losses came because of road closures, followed by evacuation alerts and orders.”

The report says that using business licence and local information, it is estimated there are 492 businesses within the TNRD. Of these businesses, it is estimated that 457 were impacted in some way by the 2017 wildfires. The wildfires happened during the peak season for many businesses, intensifying the financial impact.

“Another interesting piece was the lack of understanding among business owners about what support programs are available,” continues Sell. “Programs were being developed and made available quickly, and one immediate thing we did was communicate out a summary of all the programs we were aware of. We compiled the resources into a summary, put them on the TNRD website, and sent them to business owners.”

The report states that about 19 per cent of businesses indicated that they were aware of aid programs but had not yet applied, and 39.2 per cent of businesses indicated that they had not participated in any support programs.

Sell says she was surprised to find that even if businesses knew about the programs available, many didn’t apply. “They said it wasn’t worth the effort, or that they wanted to leave [the funding] for people who needed it more than they did. Some said the amounts offered barely covered their losses.” Other reasons for not applying included being unable to find funding to assist their business to recover; not meeting eligibility requirements of programs; and not having the capacity to complete the applications.

The sheer number of programs from different organizations was also identified as a factor. One business owner in the area said “There are too many organizations involved in this recovery dealing directly with business and people impacted. Red Cross, TNRD, SLRD, CCCTA, Province, etc., etc. Perhaps you can organize yourself so I only deal with one organization that can help me on the ground. This is the fifth survey I have completed, but I have yet to see any help beyond the initial Phase 1.”

It was also suggested that a translation program or initiative to help English as a second language business owners to participate in recovery would be helpful. The report notes that there are many small business owners in the TNRD who will likely struggle accessing assistance because of language.

“It’s a conundrum: people don’t know the programs are there, or know but say it’s not worth their time,” says Sell. “The programs aren’t being fully utilized. People should be encouraged right now to access anything available to them. That shows that whatever programs are out there are addressing a need.

“If there’s no take-up, then it might show that the programs aren’t needed. Businesses should take advantage of existing and upcoming programs. It’s not a case of ‘If I access this program and then a better one comes along, I can’t access that one.’ Show that the programs are meeting your needs.”

Another discovery was that many businesses were not prepared for an emergency. “People know what to take as individuals, but didn’t think to gather together their business documents. Business emergency planning is not being widely done.”

When the consultation and survey process started, Sell says that the TNRD went in with no limits. “We wanted it to be more expansive than ‘What the TNRD can do.’ It allows us to provide the information to other levels of government, and the information has been sent to other agencies. The provincial government has been very receptive.

“We’ve started to take action on things the TNRD can do, and provided the information to other agencies that can take action.”

A gap that was identified was lack of financial support to help businesses until the next cycle begins. Loans at zero per cent interest were cited as something that would be helpful to get businesses through what is for many a slow time of year.

A common response from businesses was that marketing efforts need to be made to bring people back in to the area. “There’s a sense of urgency to get a different message out as soon as possible; change the information that’s out there, and get the right information out,” says Sell. “Tourism groups are seeking and receiving funding to ramp up their efforts to get that message out.

“We’re all going through this together. There’s lots of evidence that everyone is trying to support businesses. It was a big event. We don’t want to downplay it, but we don’t want people thinking that it’s not Beautiful British Columbia anymore.”

From the report:

– The top industry sectors represented are Accommodation and Food Services; Agriculture, Forestry, Fishing, and Hunting; Retail Trade; “Other Services”; Arts, Entertainment, and Recreation; and Construction. These accounted for nearly 85 per cent of the total representation of businesses in the online survey.

– The top sectors represented in this data accounted for nearly 80 per cent of total businesses, and they were all related to or impacted by tourism.

– When businesses in the survey were asked if they were aware of business interruption insurance, 62 per cent said yes. Of the respondents who said yes, only 14 per cent of the businesses indicated that they had successfully made a claim.

– Of 37 businesses in 20 Mile House and Area (including South Green Lake, Pressy Lake, Egan Lake, Big Bar area, Loon Lake, Maiden Creek, and 20 Mile), all 37 reported they were affected by the wildfires. In Ashcroft, 117 of 125 businesses were affected; in Cache Creek it was 112 out of 112 businesses; and in Clearwater 191 of 218 businesses were affected by the wildfires.

– The 35 per cent of respondents who indicated that they did not meet the eligibility requirements is probably over-represented, as Phase 2 of the Canadian Red Cross support initiative is extremely inclusive. However, eligibility requirements have changed since the program was first launched.

This is likely fueling the misconception that businesses are not eligible, when in fact they are. During the community sessions, there were multiple examples of instances where business owners in the room indicated they were not eligible for Phase 2 of the Canadian Red Cross support initiative. Yet with further discussion (including with the Canadian Red Cross representative at the sessions), it was found that they were in fact eligible.

– It was generally felt that the media tended to “sensationalize” and focus on the devastation. The result was the projection of devastation on a much larger scale to the rest of the world. There were consistent comments that European tourists and even tourists from outside the Thompson-Okanagan thought the whole of the province had burned down, severely impacting the tourism industry.

For example, the media focused on the closure of Wells Gray Park, giving the impression that the park and area were burning. In reality, Wells Gray Park experienced no major fires and was largely untouched.

Attention should be made in future disasters to highlight the good news and show positive images as well.


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