Oil Report

Canada fire hit as government cut spending on prevention, planes

CALGARY, May 5 (Reuters) - Alberta’s cash-strapped government cut funding for wildfire prevention, including millions for programs created in response to the province’s last major fire disaster, just weeks before a raging fire swept across the city of Fort McMurray, forcing a mass evacuation as hundreds of homes burned to the ground.

The cuts, some of which have not previously been reported, came as Alberta struggled to cope with a prolonged slump in oil prices that has reduced tax revenue, and as climate change makes fires more frequent and damaging in Canada’s vast boreal forest.

Alberta, which projects a C$10 billion deficit this fiscal year, does not have a fixed budget for fire fighting, with spending rising and falling based on need.

But the government, which took power a year ago, does set budgets for fixed costs, including contracts with companies that operate air tankers, and programs meant to prevent damaging fires, areas where the latest cuts in April were made.

In a statement, the ministry responsible for wildfire management said it had deferred some projects meant to prevent fires, saved money on discretionary travel, uniforms and facility maintenance, as well as cutting air tanker contracts.

“Regardless of the fiscal situation, when wildfires occur in our province, we take the necessary steps to protect Albertans, communities, and forests,” it said in a statement.

One cut was to funds set aside to implement recommendations from the 2011 Slave Lake fire, which destroyed more than 300 homes. The ministry said it cut that budget by C$5.3 million, nearly 17 percent.

Firefighters have been unable to stop the Fort McMurray wildfire, which has charred 210,000 acres (85,000 hectares) since it erupted on Sunday and exploded in ferocity amid hot, dry, windy weather conditions.

Separately, data requested by Reuters showed that funding for FireSmart, which pays for prevention projects such as tree thinning in vulnerable communities, dropped 45 percent in the last fiscal year, to C$7.5 million. The government said it has not yet set that program’s budget for the current fiscal year, but it did say it plans to defer some projects.

Alberta also cut spending on contracts with private companies that operate water bombers in the province. While the cut did not affect the number of planes available to fight in Fort McMurray, the companies said it could hurt capacity in the future, especially as climate change extends fire seasons.

“Personally, I wouldn’t have cut them back,” said Tom Burton, one of the experts brought in to make recommendations after the Slave Lake fire, on the water bomber contracts, citing concerns contractors might relocate to other regions.

“If that resource isn’t there when they need it, that impact could be more than the savings they made in the budget.”

The air tanker companies, Air Spray and Conair, bid on the assumption that their contracts would be for 123 days, but the province opted to sign a firm contract for only 93 days, saving C$5.1 million.

Both companies said they were focused on fighting fires, not their dispute with the province. But they also said lost revenue may force them to lay off workers, reducing the number of air tankers at the province’s immediate disposal.

“We are potentially looking at cutting staff,” said Paul Lane, vice president at Air Spray. On Wednesday, he was traveling to Red Deer, Alberta to look for ways to prevent layoffs. “If these cuts stand, we may have to lay people off.”

Jeff Berry, director of business development at rival Conair, said his company may need to lay people off at the end of the fire season.

Burton, who serves on a committee that allocates some FireSmart funding, said Alberta is ahead of other provinces in spending on those projects. The government said it has 775 firefighters lined up for this season, up from 555 in 2011.

When asked on Wednesday about the fact the fire came in the midst of Alberta’s financial crunch, Premier Rachel Notley said the government would be “strategic and intentional.”

Asked whether “strategic” meant the government lacked the money to properly deal with the issue, Notley said: “That’s absolutely not what I’m saying.”

The Insurance Bureau of Canada warned in a 2015 study that climate change had made forest fires more frequent, a trend that would likely continue and contribute to rising costs associated with extreme weather events.

$1 = 1.2863 Canadian dollars Additional reporting by Allison Martell in Toronto and Julie Gordon in Vancouver; Editing by Alan Crosby