Northern Alberta economy braces for next boom
By Archie McLean, Canwest News Service
October 3, 2009
The economic slowdown has been good for Fort McMurray. But with things picking up again in the oilsands, many wonder if they’re prepared to weather the next boom.
FORT MCMURRAY, Alta. — In recent years, simply treating employees well wasn't enough to keep them serving customers in Fort McMurray.
"I don't blame young people," said Bill Rockwell, who owns a toy store in the Peter Pond mall downtown. "Work for me in retail, or go up north of the city and pile rocks or whatever for $40 an hour?"
But since the bottom fell out of the world economy a year ago, enticing and keeping workers hasn't been quite so difficult.
"It's been infinitely better," said Rockwell. "The economy is reaching a more sane level."
Locals are almost bashful about it, but the slowdown has been good for Fort McMurray, about 450 kilometres north of Edmonton. They say it has cooled an overheated economy and allowed time to catch up on vital public infrastructure projects. But with things picking up again in the oilsands, many wonder if they're prepared to weather the next boom.
In McMurray, slowdown is a relative term. The bridge still plugs up at rush hour, road construction projects are everywhere and social service agencies still strain to keep up with demand. A typical four-bedroom house costs $638,000, one of the highest amounts in the country.
According to a June survey by the Oilsands Developers Group, there are still 22,728 workers at 78 camps, lodges and motels largely north of the city.
Still, compared to recent years, things are more mellow now. In 2006, the housing crunch got so bad that council approved temporary work camps in the city. It was a symptom of larger problems, and some long-term residents worried the town was at risk of becoming a hollowed-out staging grounds for industrial development.
The recession, which put a number of oilsands expansion projects on hold, has allowed the municipality to catch up a bit on infrastructure. A massive new recreation facility is set to open later this fall, the Athabasca bridge is being expanded, more of Highway 63 is being twinned and two new parcels of land are being developed at a cost of $241 million to the province.
"The recessed economy has given us a bit of an advantage when it comes to tendering our projects," said Mayor Melissa Blake. "The unfortunate thing is, we haven't done as many of them as we would like to do to be able to capitalize on what the market is offering right now. But I would say we're in a better position this year than years past."
Indeed, with the price of oil on the rise and work on Imperial Oil's Kearl Lake mine set to resume, there is a feeling around town that the respite is almost over. Other projects from Suncor, Shell and CNRL are on hold, but could start again at any time.
"The calm has passed and I think we're going to be seeing this ramping up very, very shortly," said Coun. John Vyboh.
He's concerned that when things do heat up again, the municipality will be right back where it was in 2006. He and others — most notably former Premier Peter Lougheed — think what's needed is paced development.
"What we've seen is the doors thrown open for industry, and as a result we haven't been able to really catch up to the number of leases that have been handed out," Vyboh said. "We've put the cart before the horse. We have all these developments without the infrastructure to support it."
Vyboh suggests making oilsands companies help pay for local infrastructure.
"One of the things we need to be looking at down the road is saying, 'If you're going to have an expansion project, or if you're going to have a lease, maybe we need to make sure that as part of the condition, you bring in doctors with a facility,'" Vyboh said. "That way we're making some requirements that will help out the infrastructure or the social infrastructure."
"To those who say this government isn't listening to this city or this region, we are listening," Premier Ed Stelmach said in a tour of the city last week. "Because now is the right time to prepare Fort McMurray for its next phase of growth."
Edmonton Journal
http://www.vancouversun.com/entertainment/Northern+Alberta+economy+brace...
