As the residents of Fort McMurray return to their homes, or what's left of them - or to nothing but ashes and rubble to make where their home once stood - the hard work of rebuilding begins.
Today is the last day that the federal and Alberta governments will match funds donated by the Red Cross to aid the community and its residents hit so hard by The Beast, a forest fire so big that caused so much damage that it got its own name, courtesy of the town fire chief.
That money is in the millions, however, and is earmarked for emergency aid. Restoring Fort McMurray and making its resident whole will cost billions, with initial reports saying insurance companies could be on the hook for as much as $9 billion.
They have an obligation to their Fort Mac customers to be diligent and comprehensive in their investigations, to make sure the most deserving policy holders are compensated quickly for their loss. Insurance fraud is a common occurence, however, particularly after disastrous events when so many claims are being made all at once and under emotional circumstances. Adjusters have the difficult task of having to sort out legitimate loss from the scams.
Insurance companies are not the Red Cross, nor do they pretend to be. They are large, for-profit operations, which means they will do their best to take care of their customers but they also have an obligation to shareholders, many of whom may be affected Fort Mac residents through their RRSPs or company pensions, to keep profits as high as possible and settlement costs as low as possible. They will pay but they will be as stingy as possible about it. Furthermore, they will do the same thing as any other business does when faced with sudden and unexpected expenses. That means passing those costs onto consumers. As one analyst told the CBC, insurance policies across Canada will likely see a price hike to help offset the massive settlements to Fort McMurray residents.
Insurance adjusters will also have complicated claims to assess. News broke Monday that there are more than 500 Fort McMurray homes that have no visible damage but are unsafe for their owners to return to because of toxic ash contaminating the buildings and the surrounding ground. When can these properties get cleaned up? How long will that take? Will it be easier (meaning cheaper) to demolish the home as part of the cleanup? Will government help pay for it? All of these questions and many more need to be answered before the claim can be settled.
And that's just insurance.
Drivers are already paying more because of Fort McMurray. That 15 cent per litre jump in fuel prices seen just before the May long weekend was partially due to the regular summer hike in prices but it had more to due with the drop in oilsands production, as well as the uncertainty surrounding how long the decline in capacity will last. The major fuel companies are passing on the costs of the increased risk and decreased supply to drivers, just like they always do because they, too, are not the Red Cross.
Taxpayers will get their turn, too. Both the Alberta and federal governments were running large deficits even before the fire, due to the severe decline in world oil prices. Those deficits will run even higher to pay for everything from employment insurance to the repair and restoration of community infrastructure.
As a result, government will be no different than energy and insurance companies when dealing with the fire's aftermath. Prime Minister Justin Trudeau and Alberta Premier Rachel Notley will say all the right things about government doing everything it can to help the victims of the disaster but the reality on the ground will be different.
Service Canada staff will be as vigilant with Fort McMurray residents claiming EI as they always are with everyone else. Meanwhile, provincial and federal bureaucrats will not cut blank cheques to the Fort McMurray municipal government to fix and replace roads, street lights, parks and civic buildings. In the interests of protecting taxpayers and guarding the public purse, they will insist on paying for as little as possible.
Fort McMurray residents have been blessed with the generosity of Canadians donating cash and goods to help them through this crisis. As the true bill for this massive calamity comes in, that generosity will wane.
Everybody wants to help but nobody - be it insurance and energy companies or governments and taxpayers - wants to pay a nickel more than they have to.
-- Managing editor Neil Godbout
