Economic spillovers of wildfire recovery efforts in remote Indigenous communities in Canada: The case of Little Red River Cree Nation

This study examined the economic impacts of the reconstruction of Fox Lake , Alberta, following the 2023 Paskwa wildfire . Fox Lake , one of three reserves of the Little Red River Cree Nation , lost 190 homes and other critical community infrastructure. Initial rebuilding costs have exceeded $160 million CAD. Wildfires present an ongoing challenge globally, especially for remote Indigenous communities in Canada, where climate change intensifies wildfire risk. The main consequences include damage to infrastructure and disruption of lives, calling for government recovery support. In 2024, the province of Alberta allocated $2 billion specifically to combat wildfires. Employing the provincial Input-Output model, we estimate the economic impact of government spending for wildfire response and recovery on Alberta's economy. The impact is evaluated by measuring the rise in production value across Alberta's sectors relative to government-assisted recovery efforts. We estimate the economic effects of evacuation, transportation, and reconstruction expenditures by utilizing daily ledger reports of recovery expenses from March 2023 to April 2024, along with Alberta's 2020 Supply and Use tables. The main findings indicate that expenditures for post-fire recovery in Fox Lake increased the provincial production values. The estimated output multipliers for evacuation, transportation, and reconstruction expenditures are 1.71, 1.74, and 1.77, respectively, while the aggregate recovery spending has an overall multiplier of 1.76. The federal government's contributions of $291 million resulted in a $221 million increase in provincial production. This boosted Alberta's gross value added by $253 million and created 2300 full-time equivalent jobs, representing 0.1 % of the provincial workforce. • The federal government's contribution to post-wildfire recovery efforts in Fox Lake led to a $221 million increase in gross provincial production. • Recovery spending was mainly distributed across neighbouring communities. • Around 2300 full-time jobs were created in Alberta. • Community households faced considerable social, mental, and cultural damage due to wildfires, but the province experienced economic benefits from reconstruction efforts without bearing the full impact of the wildfire destruction.