Why it matters: Michigan businesses lost more than $4 billion in direct economic activity during major wildfire smoke events that blanketed parts of the Midwest and Northeast, according to new analysis from our friends at the East Lansing-based Anderson Economic Group (AEG).
What happened: Smoke from wildfires in Canada and Northern Minnesota created hazardous air quality conditions across a wide swath of the U.S., prompting closures, cancellations, and reduced outdoor activity. AEG estimates the economic impact reached into the billions, with Michigan being one of the hardest hit states at more than $4 billion in estimated direct economic losses. Businesses that depend on customers, employees, or operations being outdoors are particularly vulnerable, including tourism and hospitality operators, restaurants with outdoor seating, agriculture businesses, and more.
The bigger picture: Wildfire smoke is increasingly becoming a Midwest business continuity issue, not just an environmental one. AEG’s analysis focused only on direct income losses and did not include long-term health effects, natural resource damage, infrastructure losses, or fire suppression costs, suggesting the total economic impact could be significantly larger.
- Lawmakers in Washington DC have introduced the Wildfire Smoke Emergency Declaration Act of 2026, which would create a new federal “smoke emergency” declaration, authorizing FEMA to provide smoke-related assistance and the Small Business Administration (SBA) grants to businesses that lose significant revenue due to wildfire smoke. The legislation has been introduced but has not yet been enacted into law.