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A downtown street is empty of traffic after the Bow River overflowed its banks nearby into Calgary, Alberta June 22, 2013. A CIBC report says the economic hit from the devastating floods could cut third-quarter growth nationally by a full percentage point.ANDY CLARK/Reuters

The toll from the devastating southern Alberta floods could knock a full percentage-point off Canada's annualized growth and 5 per cent off provincial growth in the third quarter, according to a new estimate by the Canadian Imperial Bank of Commerce.

"While damage assessments are still being conducted and the region continues to struggle in the aftermath of the disaster, the economic and fiscal ramifications of the incident are likely significant," CIBC economists Warren Lovely and Emanuella Enenajor said in a research note Wednesday.

The hit could reach 0.3 per cent nationally in June alone.

Over the longer term, post-flood rebuilding could actually be a net gain to Alberta's economy, concludes a separate report from Toronto-Dominion Bank, also released Wednesday.

So TD revised up its 2013 growth estimate for Alberta, to three per cent from 2.5 per cent.

"Somewhat paradoxically, the significant rebuilding that follows often provides a net boost to economic growth, partly reflecting the way gross domestic product is calculated," TD said.

TD warned, however, that because labour conditions are already so tight in the province, the rebuilding effort could drive up labour costs and face delays.

"Greater inflationary upward pressure may arise as a result," the TD report pointed out.

CIBC said that the fiscal impact on Alberta – already headed for an estimated budget deficit of $2-billion this year – is unclear.

"The direct fiscal impacts are still too early to precisely assess," CIBC said.

Alberta Premier Alison Redford has pledged $1-billion towards relief efforts. The province is also in line to get federal emergency assistance, which would offset clean-up efforts. Federal aid covered roughly half of the $950-million bill facing Manitoba after its 2011 flood.

The report said it took nearly a year to get a firm handle on the final tally in Manitoba.

The full cost of the Alberta floods goes far beyond relief and clean-up. As CIBC pointed out, long-term rebuilding and flood prevention measures could add to the province's long term capital costs and borrowing.

The hit to Calgary, which accounts for more than 5 per cent of the country's economy, was substantial.

But CIBC said large costs will also come from damage to farmland as well as ruptured and damaged oil installations.

The rebuilding effort will eventually add to GDP over the long haul, but the process could be "drawn-out" due to the extent of damage to homes, businesses, roads and other infrastructure, according to CIBC.

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