GDP to show economic costs of Alberta wildfires

The dip was even deeper than expected as economists had predicted a decline of 0.4%.

The disaster, which forced the shutdown of crude operations and led to a 25 per cent drop in Canada’s oilsands output in May, has dimmed economic growth prospects for the second quarter.

The May statistics, released Wednesday, reveal the total number of railcars used to ship oil dropped by a third compared with a year ago to 6,566, as the wildfire hazard in Fort McMurray, Alta., reduced output from the oilsands by more than a million barrels a day.

Excluding the impact of the wildfire, real GDP was reported to edge down 0.1% in May.

“There were fires raging in Alberta, but the rest of the economy wasn’t so hot”, said Shenfeld. The drop was “primarily due” to the record 22 percent plunge in non-conventional oil production, the agency’s report said.

“The good news is that the fall should prove to be a one-month wonder”, BMO economist Doug Porter said.

After growing at a sturdy annual rate of 2.4 per cent in the first quarter, the economy is widely expected to churn out a significantly worse result in the second quarter.

The company said on Wednesday earnings per share fell to 67 cents from $1.47 the year before. The services sector held up relatively well with a 0.3 percent gain.

In early July, the Bank of Canada said the wildfires would likely fuel a contraction of 1% in the second quarter, a period that includes April, May and June.

The Canadian dollar strengthened against the greenback immediately following the data, though investors were also taking in disappointing second-quarter US growth figures.