Wildfire Evacuation Bankruptcies Are Coming

The massive wildfire evacuation I’m currently a part of is a financial nightmare. More than half of Canadians are less than one unexpected $200 expense away from insolvency. Many if not most of >30,000 evacuees faced worse than that on their very first day.

Our return to our communities will be the end of it as far as the news cycle is concerned, but for the NWT, it’s barely the beginning. While flames never reached the heart of the city, economically this will be like a bomb went off. Rebuilding a burned building can be expensive, but at least it’s straightforward. Restarting a paused economy wherein tens of thousands of people just took a big financial hit and a bunch of businesses are tottering near collapse is anything but. Much of the community’s capacity for discretionary spending — what we call consumer demand — has fallen off a cliff. It’s not going to be easy to get the ball rolling again, and what’s left will be a notably poorer city for years to come. At the same time that local residents struggle, their municipal and territorial governments will also face a reduced ability to help them.

Including when the next disaster looms. More crises will come, and the math is going to get worse every time.

The GNWT can’t stop this financial bleeding

Canada’s Northwest Territories, where I live, has a colossal land area. If it were its own country, it would be the 20th largest nation on Earth. Excluding seasonal tourists, the local population is only 45,000. That means the tax base to fund government services is very small. As a territorial rather than a provincial government, the NWT has no authority to raise revenues by doing something like implementing a sales tax. It’s largely dependent on a combination of resource royalties and federal largesse to fill in the gaps wherever possible.

Local conditions also add complexity, and therefore more expense, to providing even the most basic governmental services. Consider an emergency services hotline. In a major urban centre to the south, GPS is likely telling a 911 operator where you are even before they hear your voice, and they can typically predict about how long an ambulance will take to get to you. A caller needing help in the North may be far from roads or landmarks they can use to direct help, where no ambulance can reach, and might be speaking any of the NWT’s eleven official languages.

Unlike the rest of the country, there’s no redundancy for a lot of Northern infrastructure. The conveniences of civilization exist, but they’re more fragile and prone to interruption. All it takes is the loss of one cable for an entire community to become cut off from telecommunications and thusly unable to receive useful information like vital evacuation orders. Many of the biggest headaches of Yellowknife’s wildfire crisis stem from having only one highway in or out of the rest of the country, which makes wildfires closing stretches of that road more than mildly inconvenient. The risk wasn’t only the possibility of buildings catching fire, but also a chance of 20,000 people facing empty grocery store shelves. If extended supply disruption wasn’t a part of the scenario, an evacuation might never have been ordered.

Remember that all of the above is held together by, governmentally speaking, a shoestring budget relative to the task. It’s a trapeze act without a net. Cost of living is already high to start with, for incredibly obvious reasons like higher shipping costs for every single thing that isn’t made locally, so resistance to even small tax increases is immense. Enter record wildfires threatening community after community after community. Just the direct cost of firefighting has already ballooned to more than five times as much as was budgeted for the year, and fires are still raging. Government budgets were in a hole even before we consider the evacuation order.

Displacing multitudes widens existing gaps

You can’t displace 70% of the population for weeks without government spending. It’s not remotely possible. You can’t even get them out the door without support. Roughly 5000 private vehicles took the only road south, but not everyone owns a vehicle. Now you’re trying to fly out thousands. Even if commercial airlines weren’t prone to jacking up their prices as soon as people in crisis need them, not everyone can afford a plane ticket. The numbers can overwhelm them. Evacuees need someplace to go. They need to eat while they’re there. For many, the work interruption obliterates their income. Tens of thousands of people.

In a perfect world, unexpected costs from a disaster you had nothing to do with shouldn't blow up in your face. In theory, governments exist to manage this sort of crisis. In the real world, our governments can’t cover all the costs. We’ve repeatedly cut taxes for the wealthiest individuals and corporations for more than half a century, drying up the former depths of government capacity into a shallow puddle. There’s no convenient billion dollar rainy day fund lying around the NWT to tap into for managing this. Even in the few places in the world where governments could genuinely provide the support that people desperately need, cruel political ideologies simply won’t. It might require mildly inconveniencing some billionaire CEO with an army of lobbyists.

The one universal constant in modern civilizations continues to hold true. The farther down the economic ladder you are the more frequently and fiercely you get kicked in the teeth by every obstacle that comes along or can be deliberately placed in your way. Homeless people were offered flights out of the fire zone to safety, to be kicked out of evacuation shelters within days, to fend for themselves on unfamiliar streets. Some but not all will be found to return home. I don’t know how many families that were already barely scraping by from paycheck to paycheck just lost several pay checks. Some will face calamity immediately. Others will tread water for a while before the extra weight of managing new debt pulls them under. Either way, no one’s coming along to bail them out.

Some people in the middle, like my household, had just a bit of carefully cultivated financial wiggle room to help us get through. We’re more likely to have had home or rental insurance to cover some of our losses. We’re still close enough to scarcity ourselves to empathize with its bite, while also having a few resources we can leverage towards trying to help. So we’ll likely sacrifice far more meaningfully to support those losing ground than the yachts and second homes crowd will. But no matter how strong our sense of community spirit is, we also can’t muster enough capacity to meet the scope of the community need. We still come home in a worse position than we started, closer to our breaking point for the next round.

The loud and entitled demand the most. They‘re not only simmering mad over their losses, but would love a bitter pound of flesh from someone they can blame for the inconvenience added on top. They’ll weaponize the anxiety and frustration of families in crisis to further their political ideology, by scapegoating leaders whose hands were tied by lack of resources while trying to manage a huge, complicated, unpredictable unprecedented crisis. Anger will flare up at changes to or defunding of existing government services, and particulary at any potential additional taxes that might fund new local resilience efforts.

Demanding the impossible is easy. Providing it is not. Go figure.

Financial supports are band aids for a bullet wound

Thus far, a few financial support programs have been announced, but they don’t amount to much. Residents whose employment was interrupted can apply for a one time payment of $750, but the average Yellowknife one bedroom rent alone is at least double that, and rental payments on homes people couldn’t even be in are still due. At one point it was announced that residents who drove their own vehicles out of the territory using their own resources wouldn’t be eligible for financial aid. After a predictable outcry, a support program for those people was created, providing up to $750 per private vehicle that evacuated . If you weren't getting financial support from elsewhere, such as through your home insurance. Next, people who bought their own commercial plane tickets to leave town were told there’s no recompense coming. They’re pissed off, too. Businesses are also hurting. A special fund to help Yellowknife businesses offset their losses offers them up to $5000 each, which is for many less than half of the rental payment they owe for retail space that sat idle for most of a month. It can’t account for their lost income. All of it added together is, compared to costs that evacuees faced, barely a drop in the bucket. Officials will be scrambling to stanch the economic bleeding, but for every dollar of need they’ll be lucky to track down a penny to address it.

The basic math of climate costs is simple. Disaster costs are growing much faster than our ability to pay for them can grow. The insurance industry, whose profit margins are directly dependent on effective risk assessment, are surely sick of repeatedly explaining it by now. They call the climate issue “the mother of all risks.” In disaster prone regions, homes increasingly can’t get insurance, and those regions are growing fast. It’s only part of why economists consider the climate a risk not only to our economies themselves, but to our entire global financial system.

NWT evacuees are getting some help, from governments at various levels that are constrained by other priorities and limited budgets. There are still some private donations coming, but the cost of living crisis everywhere steadily whittles away at people’s capacity to donate. A lot of us have leaned on family or friends or strangers. But virtually no one who might be willing to help has the level of resources we need. The help we’re getting is spectacularly inadequate, yet we’re still fortunate for all we can get, because wow do Northerners need it.

With every year that passes, the usual sources for any such help will be increasingly overwhelmed.

So let’s go where the money is

Turning for help where pockets are increasingly empty only magnifies frustration. Household budgets are squeezed. Municipal budgets are squeezed. The territorial budget is squeezed. The federal budget’s also being squeezed. It’s a mess. So who out there, who is even remotely involved in this whole godawful nightmare in any way, actually has deep enough pockets to cover the damage? Is there any place where the wildfire displaced and affected governments could possibly go for what we need if we refuse to just shut up and accept the crappy hand we’ve been dealt?

I can find only one obvious answer: the arsonists. Not the imaginary ones conspiracy theorists yell about whenever you mention climate science. The ones who have been deliberately and knowingly destabilizing the planetary climate for decades while funding public disinformation efforts to defend their profits. The fossil fuel companies. We haven’t had just years of warnings, we’ve had whole generations of them. Exxon’s own scientists started warning them about warming in the 1970s. We can’t predict the igniting sparks but we understand perfectly well why wildfires are bigger and hotter and no longer confine themselves to a season. After 1.5º of warming this year’s chaos will feel like the good old days.

Fossil fuel companies pocketed $219 Billion in profits in the last year alone. That’s more than $6,944 for every single second of every single day. Not gross earnings, mind you, but pure profit. To big oil’s wealthy shareholders, the losses that will be so devastating to many Northern families are barely a rounding error.

So I personally want to see the Northwest Territories, and the City of Yellowknife, and local indigenous governments, and all of the tens of thousands of temporary climate refugees for whom the last couple of weeks of uncertainty are just the prelude to financial emergencies to come, all join together in a class action law suit against the oil industry.

The idea of holding oil corporations to account is starting to take off, with literally thousands of lawsuits already filed in 55 different countries and utilizing a range of strategies. The number of climate court cases has more than doubled in the last five years and more are clearly on the way as the movement grows momentum. More than two dozen US cities are seeking damages, and even more importantly, we’re already seeing that climate cases can be won.

The recovery period won’t be short and it won’t be easy, but it doesn’t have to cripple the North. Expecting Northern communities to recover from evacuation losses and build long needed redundancy and resilience all by themselves is like telling the average cancer patient they’ll have to buy their own MRI machine. For Suncor, Cenovus, Imperial Oil, Husky Energy, and so on, it would be barely a dent in their windfall of record profits.

Canada is warming twice as fast as the global average. Canada’s North is warming twice as fast as the Canadian average. These are the front lines of climate conflagration. We know, categorically and absolutely, that burning fossil fuels plays a causal role in increased wildfire risks and record wildfire losses.

More to the point, we know that thrusting populations into economic vulnerability creates instability beyond the dollars and cents. It’s emotionally punishing. Fear and frustration commonly breed anger. It can wreak holy hell on social bonds and community solidarity. Uniting Northerners in confronting big oil could do the exact same thing that the days of the evacuation itself did: remind us that we’re all in it together.

Even better than that, though, it would direct all that fury at the right target for once. The only target who could genuinely be held accountable to actually deliver the requisite pound of flesh. The only one with pockets deep enough to fund a robust recovery.

During Canada’s record wildfire crisis, I didn't expect to be on the front lines, but I was. If you’d like a deeper dive into the experience, I wrote about the risks before the evacuation was ordered here, about our harrowing journey to safety here, about what it means to become a climate refugee here, and about how all of the displaced are certainly not having the same experience here. Further analysis is coming.