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Empty streets in the downtown core of Calgary which has lost most of its power. It could be some time before electricity is completely restored June 23, 2013.John Lehmann/The Globe and Mail

Calgary's downtown business core faces indefinite power outages and untold damage on Monday after devastating flooding made a ghost town out of the city's gleaming array of office towers.

The disruption rippled through one of Canada's most vibrant economies and raised questions about the longer-term impact.

Although city officials had originally predicted it could take weeks or months for downtown to be powered and open for business, late Sunday Mayor Naheed Nenshi said the buildings occupied by 90 per cent to 95 per cent of the city's downtown workers could be functioning again by Tuesday. Still, he advised that companies keep non-essential employees home for at least Monday and Tuesday.

Some of the biggest oil and gas companies in the country are preparing to forge ahead using backup systems, satellite offices and telecommuting. But with the massive Calgary Stampede tourist event in danger of being a washout, thousands of people displaced from their homes and a repair bill potentially in the billions of dollars, there is widespread uncertainty over just how hard the region's and province's economy will be hit – and for how long.

"This is orders of magnitude larger" than the 2005 flood in the area that caused roughly $500-million in damage, said Todd Hirsch, who works in Calgary and is chief economist at Edmonton-based financial institution ATB Financial. He suggested the damage could be in the neighbourhood of "10 times" the 2005 total – an amount that would be equivalent to about 1.7 per cent of Alberta's annual gross domestic product.

Boardwalk REIT, which owns and operates numerous residential rental properties in Calgary, reported that its Elbow Towers building near the flooded Elbow River had suffered "extensive flooding," but said the damage should be covered by its insurance.

H&R Real Estate Investment Trust said its 58-storey Bow building, the city's biggest office tower and the one nearest the most heavily flooded area, was not damaged – nor were H&R's other two major properties, the Telus Tower and TransCanada Tower. However, the city's power supply to the Bow remains out, leaving the building with only emergency power.

Cenovus Energy Inc. and Encana Corp., the two major tenants who each have roughly 2,000 staff at the Bow, said they have backup systems in place for their computer servers, allowing employees to access work e-mails and electronic files from home.

"Our ability to work under difficult circumstances will be put to the test this coming week," Cenovus chief executive officer Brian Ferguson said in an internal e-mail to employees on Sunday. "I understand we may not be able to access our offices in downtown Calgary until at least mid-week. Work will be focused on business-critical things only."

At Suncor Energy Inc., there is backup power for critical functions, but since downtown is an evacuation zone, employees are being encouraged to work from home on Monday, said Suncor spokeswoman Sneh Seetal. Suncor also has a couple of sites outside the downtown core, and those locations will be available for certain staff, she said.

"I really don't think this will affect the oil and gas industry's decision-making, revenue-generation or spending capabilities. Companies here have sophisticated backup IT systems and disaster management plans," said Peter Tertzakian, chief economist at ARC Financial Corp., a Calgary investment firm specializing in the oil and gas industry. "Only a small fraction of the industry's productive oil and gas capacity is in the flood fairway, so output shouldn't be affected much, if at all."

Flood-related disruptions, however temporary, could distort economic indicators over the summer, as the impact of the disaster and the subsequent recovery work their way through the economy.

"There are big interruptions for the movement of goods due to the closure of the TransCanada highway and some rail lines," said Mr. Tertzakian, who characterized this as a "short-term negative" for the economy.

Bank of Montreal economist Robert Kavcic told The Canadian Press that as much as one-third of Alberta's economy could feel the bite from the flooding in the immediate term, with the short-term impact running in the hundreds of millions of dollars. However, he said, "when the water recedes and people go back out to the stores, you're going to get some replacement spending there, too."

"Tourism is really going to be hit," Mr. Hirsch said. The Stampede, a world-famous 10-day festival that attracts about $345-million annually in tourist dollars to the province, is scheduled to begin just 11 days from now. But the severe flooding on the Stampede grounds and inside the Saddledome, the major arena on the grounds that is used for a series of concerts, suggests that at the very least, the event will have to be greatly scaled down.

He added that the Alberta government could also feel the pinch on its already strained provincial budget. The province has $200-million set aside for emergency assistance, but "It's not nearly enough," he said.

On the other hand, businesses that provide cleanup and reconstruction services are going to be running around the clock.

Past natural disasters have shown that such events typically delay some economic activity – such as shopping, travel, and job hunting and hiring – while the aftermath typically fuel spikes in construction and replacement purchases, which can temporarily accelerate the local economy, actually providing a boost to GDP growth.

"There's going to be an awful lot of economic activity – but none of it is positive," Mr. Hirsch said. "You have to look beyond the GDP numbers. Alberta certainly won't be better off for this."

Editor's note: Todd Hirsch works in Calgary and is chief economist at Edmonton-based financial institution ATB Financial.