Wildfire Evacuation Bankruptcies Are coming
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And what the NWT can possibly do about it.
The massive wildfire evacuation I’m currently a part of is a financial nightmare. More than half of Canadians are less than one unexpected $200 expense away from insolvency. Many if not most of >30,000 evacuees faced worse than that on their very first day.
Our return to our communities will be the end of it as far as the news cycle is concerned, but for the NWT, it’s barely the beginning. While flames never reached the heart of the city, economically this will be like a bomb went off. Rebuilding a burned building can be expensive, but at least it’s straightforward. Restarting a paused economy wherein tens of thousands of people just took a big financial hit and a bunch of businesses are tottering near collapse is anything but. Much of the community’s capacity for discretionary spending — what we call consumer demand — has fallen off a cliff. It’s not going to be easy to get the ball rolling again, and what’s left will be a notably poorer city for years to come. At the same time that local residents struggle, their municipal and territorial governments will also face a reduced ability to help them.
Including when the next disaster looms. More crises will come, and the math is going to get worse every time.
The GNWT can’t stop this financial bleeding
Canada’s Northwest Territories, where I live, has a colossal land area. If it were its own country, it would be the 20th largest nation on Earth. Excluding seasonal tourists, the local population is only 45,000. That means the tax base to fund government services is very small. As a territorial rather than a provincial government, the NWT has no authority to raise revenues by doing something like implementing a sales tax. It’s largely dependent on a combination of resource royalties and federal largesse to fill in the gaps wherever possible.
Local conditions also add complexity, and therefore more expense, to providing even the most basic governmental services. Consider an emergency services hotline. In a major urban centre to the south, GPS is likely telling a 911 operator where you are even before they hear your voice, and they can typically predict about how long an ambulance…
