From forestry to resorts, the economic fallout from B.C.’s devastating wildfires

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The devastating fire that tore through Lytton, B.C., is expected to have widespread consequences on the regional economy, including disrupted communications networks and damage to forestry and ranching operations.

The fire, which began June 30 after several days of record-breaking hot weather, killed two people and ravaged the village, destroying homes and businesses that included a museum dedicated to the history of Chinese workers in the province.

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The full economic toll will take months or years to calculate, but ranches, mines and resorts are already feeling the impact.

“I know stock has been lost – but we won’t have any type of a tally until [the fire season] is done,” Kevin Boon, general manager of the BC Cattlemen’s Association, said on Tuesday.

Lytton, a village with a population of about 250 people, sits at the junction of the Thompson and Fraser rivers in B.C., about 150 kilometres northeast of Vancouver. Another 1,500 to 2,000 First Nations members live nearby. The local economy includes forestry, ranching and tourism, and Lytton is a hub for surrounding communities, providing fuel, groceries and other services.

More than 60,000 residents of Thompson-Nicola Regional District, which includes Kamloops and Lytton, were employed as of the last census. Between 2006 and 2016, jobs in the region’s smaller communities fell about 19 per cent, according to a district report that pointed to the decline of traditional industries and population aging as potential factors in weaker employment.

Canadian National Railway Co. and Canadian Pacific Railway Co. operate networks that pass through Lytton. There has been widespread speculation among community members that railway operations could have caused the fire. To date, authorities have said it is human-caused, but it remains under investigation.

A CP spokesperson said operations resumed on Monday afternoon and that it was “implementing appropriate measures, such as increased inspections of our tracks and equipment, during this period of extreme weather. … CP teams remain on site supporting local authorities.”

Vancouver-based miner Teck Resources Ltd. on Tuesday said it was rerouting coal shipments that usually go through Lower Mainland terminals to Ridley Terminals in Prince Rupert as a result of rail disruptions caused by the fire.

Telus Corp. has set up a portable cell tower to provide temporary wireless coverage for emergency crews, and employees are being escorted into the area by fire crews and RCMP to determine what equipment will be needed to restore service in the community, spokeswoman Liz Sauvé said in an e-mail.

Joel Wood, an economics professor at Thompson Rivers University in Kamloops, said it’s tough to tally up the economic devastation that results from wildfires. “If someone gets relocated and has to pay for a hotel, that shows up as a positive in” gross domestic product, he said.

Where it does have a tangible impact is the forestry industry, he said. The vast majority of B.C.’s timber is on Crown land, and the province enforces a limit on production, known as the annual allowable cut. Major setbacks, such as wildfires and pine beetle infestations, can damage supply and affect harvest limits for decades to come.

“It’s a renewable asset, so it can grow back, but we’re talking a long time period,” Prof. Wood said.

Troubles aren’t new to B.C.’s lumber industry. Over the past couple decades, it’s been rocked by wildfires, the beetle epidemic and inconsistent demand, leading to widespread sawmill closings and steep layoffs. Statistics Canada data show there were 16,800 jobs in forestry, logging and support activities in B.C. last year, down from 37,150 in 1997.

“The impact of this is being felt in less diversified, smaller towns,” Prof. Wood said.

United Steelworkers District 3, which represents forestry workers in several B.C. communities, said in a July 1 statement that “multiple” homes of union members were lost in the fire and that many were at evacuation centres in Merritt.

Bank of Nova Scotia operates the sole branch in Lytton, according to records from Payments Canada. “Once we have the opportunity to safely return to our branch site we will be able to assess the condition of our property and determine next steps,” Scotiabank said in a statement.

Kumsheen Rafting Resort, based in Lytton, said on its website Wednesday that it was unable to accommodate any reservations for the near future because of the fire and would be providing refunds, in the form of gift certificates, to people who had booked trips up until July 15. Future operations would be evaluated at that time, the resort said, adding that responses might be delayed because all staff are evacuated.

Innergex Renewable Energy Inc., which runs the Kwoiek Creek run-of-river project near Lytton in partnership with the Kanaka Bar Indian Band, said the facility was not damaged in the fire but that some band members and staff were displaced.

One of those people was Patrick Michell, Chief of the Kanaka Bar Indian Band, whose Lytton house was destroyed in the blaze and who is staying in a hotel in Abbotsford through the provincial program for evacuees.

The Lytton fire underscored weaknesses in the province’s emergency response and the necessity of investing in clean-energy projects and resilient infrastructure, including communications, Mr. Michell said.

“Mother Nature is the wolf, and she’s blowing down the straw houses,” Mr. Michell said on Wednesday.

“Lytton can recover, in about four years – but during that time, how many more B.C. and Canadian homes will be lost to a flood, to a fire, to a tornado?”

Other major fires have emerged around the province since the Lytton fire, resulting in evacuation alerts and orders.

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At South Point Resort on Tuesday afternoon, Leanne Sallenback was watching the sky for smoke and flames while juggling calls and e-mails from people who wanted to cancel their reservations at the resort, located on Canim Lake.

Canim Lake is in the Cariboo Regional District and north of Lytton.

At the time she spoke to The Globe and Mail, Ms. Sallenback was feeling relatively reassured about her property, saying firefighting crews had tackled a nearby fire that was threatening the area.

But she was feeling nervous about her business, as dozens of guests changed their plans and cabins stayed empty during what she had expected to be her peak season.

“All the resorts in the area are just facing mass cancellations, because we don’t have any key messages to tell guests what’s going on,” said Ms. Sallenback, who owns and operates the resort with her husband.

“We don’t even know if we can tell people to come, because we are technically in an alert,” she added.

Most people are choosing not to come and asking for refunds, Ms. Sallenback said. For her, that means another financial blow after COVID-19 wiped out her 2020 season. For the region, it means fewer people visiting and fewer dollars being spent.

A 2018 report prepared for the B.C. provincial government on the 2017 wildfire season – at that time, the worst on record in the province – found extensive damage on forestry, agriculture and tourism, including an estimated $139-million hit to tourism revenue.

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