Fort McMurray — This city is smaller, not lesser, since the 2016 wildfire. Its businesses and people are challenged, not beaten by the federal policies and global economic turmoil that have slowed the pace of its valuable oilsands being pulled from the ground.
This region, the so-called economic engine of Canada, is idling rather than seized.
“I believe that our community has seen more headwinds in the last five years than it has in the 34 years that I’ve lived here,” said Keith McGrath, one of 10 councillors for the Regional Municipality of Wood Buffalo, which includes Fort McMurray. “I’ve seen some spikes, I’ve seen some downturns, but this one hurts the most.”
In the four years since the last provincial election upset Alberta’s decades-old political status quo, no other part of the province has experienced as drastic a socio-economic slip-and-slide, save perhaps for Calgary, which is the head to Fort McMurray’s heart of oil production.
Now, mere days from a vote that again promises significant political change for Alberta, the most pressing needs and wants of a city and region tied inexorably to the health of the oilsands are obvious: a provincial government that can get a pipeline or two approved and built, and ensure that reasonable tanker access on the West Coast is restored. And, if it’s not too much trouble, a Costco would be nice.
Homeowners, business owners and the regional government need political help from above, and many are pinning their hopes on the right-wing United Conservative Party, in keeping with the region’s historical political leanings. In the 13 provincial elections dating back to 1971, when McMurray first appeared on a riding header, voters have elected 11 Progressive Conservatives, a Liberal in 1993, a Social Credit candidate in 1971 and two Wildrose MLAs in 2015. The 2018 byelection in Fort McMurray-Conklin sent UCP candidate Laila Goodridge to the legislature.
The city, now split between the provincial ridings of Fort McMurray-Lac La Biche and Fort McMurray-Wood Buffalo, had seen voter turnout dwindle from highs of 50 and 60 per cent in the 1970s to embarrassing lows. Just under 20 per cent of Wood Buffalo voters cast ballots in 2008, for instance. The 2015 election coincided with a slumping economy and the region’s voters were hungry for change, with 42 per cent casting ballots in Fort McMurray-Wood Buffalo, 44 per cent in Fort McMurray-Conklin. But both numbers were still well under the provincial average.
There are fewer voters here now, as the population slumped significantly after the wildfire. But those who stayed, rebuilding homes and lives against significant odds, are motivated to make this city and region stronger. The will comes from the same pioneer spirit, entrepreneurial bent and unflagging work ethic that convinced thousands to drive stakes into the ground during good times here a decade ago.
“It’s a town that a lot of us still believe in,” said Jean-Marc Guillamot, area director of the Fort McMurray Hotel Group, and a resident since 2007. “We believe to a certain degree that it’s going to get better. We don’t want it crazy again, because crazy is not really good. As long as it’s consistent and everyone makes a living, the city can hang onto that.
“A lot of people don’t want to leave because everyone still living here is making very good money. You cannot earn the wages you earn in Fort McMurray anywhere else. I cannot earn what I’m earning here anywhere else in Canada in my industry. I know I have it good. Sure, it’s not an easy life in the sense that you work a lot, but you play a lot. When you play, you play.”
Taking the bad with the good
Life in the community 450 kilometres northeast of Edmonton isn’t for everyone, and the one-two punch of an economic downturn and a wildfire that caused $3.6 billion in damage made it harder by degrees for many, financially impossible for some. The regional population dipped to 111,687 last year from 125,032 people in 2015. The so-called shadow population (those living in work camps, hotels and temporary accommodations) fell to 36,678 from 43,084, while Fort McMurray saw a drop to 75,009 from 81,948 people.
“Your house burned down and two months later you lose your job — not uncommon,” said Colleen Stewart, assistant general manager at the Fort McMurray Golf Club. “I just can’t imagine that. A lot of people (in that situation) would move back to where their families are.”
But so many who came for six months and stayed for 20 years, as they like to say up here, are still happy with their choice and willing to ride out the downturn. Stewart said her three rental condos have each lost 40 per cent in value and her primary residence is down 25 per cent.
“For the longest time we took the good. We have to take the bad with the good,” said Stewart, who has a job she loves and the will to keep going. “It’s not the best right now but you ride it out.”
Businesspeople like Justin Herman are doing what they can at the local level to mitigate the damage done at the macro level. He and a partner converted their safety company into Saskana Staffing — providing temporary workers for industry — and have seen it grow by 500 per cent in two years, he said. He’s also director of strategic products for Minestar Group, an Aboriginally-owned engineering, construction and contracting firm, and runs another management business.
“What myself and my business partners have been doing is all the right things so we’re in control of what happens,” Herman said. “That’s why we diversified our business into multiple streams of service lines, so it’s not contingent on one service line or one company or one client. I think what you’ll see is a lot stronger businesses come through this downturn.”
The goal is a stronger, larger community too. Even as local political and business leaders push for more oil export capacity, they tangle with industry over the fly in-fly out (FIFO) issue, which sees thousands of camp-based workers commute through industry-run aerodromes outside the city without spending much time or money in the local communities. In January, council voted to impose a moratorium on new camps within 75 kilometres of the urban core and won’t renew permits for existing facilities. Industry cited commute times and expressed opposition to the ban, which will reportedly affect 27,000 workers at 61 camps.
“If the status quo was maintained, we’re looking to move about 50 per cent of the camp-based population back into the community over the next 10 years,” said Chamber of Commerce president Bryce Kumka. “Ten thousand households would be fantastic. That would make the community population about 130,000 and that would give us some stability and sustainability.”
Both the real estate and rental markets could absorb those workers and hopefully their families with relative ease, as vacancy rates exceed 25 per cent. And it’s estimated that built-out infrastructure like sewer and water utilities, roads and overpasses could handle a two-fold or three-fold increase in residents.
“We like it when it’s busy, but right now I don’t have to line up at the grocery store, I don’t have to line up at the gas station,” said Kumka. “I don’t have to make reservations at Earls two weeks in advance to go for lunch.”
That’s the upside to the downside. But there has been amalgamation of oilsands companies, major cuts to capital spending by the remaining players like Suncor, CNRL and Husky, and significant downsizing. Last month, Imperial Oil cited the Alberta government’s mandatory production cuts of 325,000 barrels per day as the reason the company slowed development of its $2.6 billion Aspen in-situ project planned for north of the city.
There is a trickle-down effect in good times and collateral damage in bad; people bought $1 million residences at the height of an over-heated market, confident that significant rental income would allow them to make even more significant mortgage payments. Suddenly they’re over-extended.
“It’s disconcerting when we’re seeing people losing their homes,” continued Kumka. “That’s never a good thing and it’s amplified in a small community. We talk about seven degrees of separation. In Fort McMurray, one or two is the realistic separation of people knowing people. So when something happens to somebody here, everybody knows about it. And when it’s negative, they’re giving their house back to the bank or one of their rental properties back to the bank, that hurts.”
The regional government is committed to downtown revitalization, riverfront development and expansion of sport and Northern Lights tourism opportunities. But even if successful, those initiatives will only be drops in a bucket.
“So what are we going to do? We’re going to make the community much better respected,” said Kevin Weidlich, president of Wood Buffalo Economic Development Corporation.
Oilsands production accounted for $44 billion in 2017, about 2.6 per cent of the country’s Gross Domestic Product, and Canadians shouldn’t take that for granted, he said. There is also an historical misunderstanding of Fort McMurray that must be corrected.
“It really is a community. It’s not just an open pit mine,” said Weidlich, who moved to the city from Edmonton in January. “There is a population here of just shy of 100,000 people that come from all walks of life. It’s a unique cosmopolitan community. It’s got that whole vibe of being an expatriate place.”
Economic development and tourism merged forces earlier this month, and their mandate is to market the region for its world-class recreational facilities, newly competitive house prices and built-out infrastructure, elevated high school graduation rate, and those long, hot summer nights.
If successful, the campaign could reduce national and international bias against the oil and gas sector and remove psychological barriers to local population growth.
“If everyone would prefer to live here, FIFO as an issue isn’t as great,” said Weidlich.
No matter the economics, plenty of people still prefer to live and invest here. The clubhouse at the 27-hole Fort McMurray Golf Club, which was reduced to ashes by the wildfire, has been replaced. An insurance payout and loan funded a majestic $9-million temple of golf that will boast the region’s nicest patio. It opened in April and stands as testament to the get-it-done attitude of people who love to work hard and play hard.
“To even bring you here, you need to have that personality,” said Stewart. “Once you’re here, you work hard or you’re on vacation. People work, work, work, work. There’s no Monday to Friday, working on your house on weekends. It’s not really like that. You’re here, there’s money to be made in working hard. And there are challenges too.”
When a barrel of Western Canadian Select soared above $90 and then $110 in 2007 and 2008, wages and house prices spiked. Advertising campaigns for restaurants and bars amounted to nothing more than opening the door, provided they could hire enough staff. The city had perhaps 1,700 hotel rooms and every one was full on a Tuesday.
In the winter of 2007, Guillamot couldn’t find enough labour for the Clearwater Suites Hotel, so guests who agreed to pluck their own toiletries and towels from a housekeeping trolley in the hall were charged $249 a night. Full service rooms went for $299. And for $79, you slept in your truck in the underground garage, ate a complimentary breakfast in the lobby restaurant and took a shower in the spa the next morning.
That was peak Fort McMurray. Times have changed.
Guillamot said his group’s 882 rooms amounts to 40 per cent of the city inventory, and the occupancy rate is a whopping 41 per cent. That’s well below the 65 per cent threshold he said is needed to maintain capital expenditure on upkeep, and provide for a healthy profit margin. So he concentrates on market retention, and hopes, like many others here, that the federal and provincial governments will lead the economic recovery or at the very least get the heck out of the way.
“People clapped their hands because we got a section of Highway 63 twinned,” recalled Coun. McGrath. “Well, that was just a small piece on an elephant’s behind for what we’ve given the province and the feds in royalties. It’s everybody’s resource, not just Fort McMurray’s resource, but the province and the federal government could have been a lot friendlier to Fort McMurray than they have been.”
Restaurateur trusts her instincts, opens European-style cafe
Surekha Kanzig’s name is on the restaurant, her life savings poured into it, her positive energy flowing through it.
Surekha’s On The Snye will celebrate its first anniversary early next month. It is the only tangible result of the regional municipality’s attempt at riverfront development, and a sign of Kanzig’s faith in her community and her own gut instinct.
At the best of times, launching a European-style café with a fine dining menu in this city would be a major risk. These are not the best of economic times. And Kanzig was well aware that many restaurants fail in the first year.
“Everything on paper and in everybody’s brain and my brain said don’t do this. Even my lawyer said don’t do this. My accountant said don’t do it. Everybody said don’t do it. My kids looked at me like I had horns growing out of my head.
“So, I don’t know, almost blind faith. You’ve got to trust your instinct and hope that things will get better. I’ve been here since 1990. This is my fourth time in a down cycle and it always comes back up. You’ve just got to make it through that until you get back up again for air.”
Her restaurant is the former Snye Amenities Building, which was a hub of activity during the Western Canada Summer Games in 2015. Kanzig was intrigued when the municipality put out a request for proposals to repurpose the place.
“I mean, a building that looks like this is pretty rare,” she said. “A building that looks like this on the waterfront in Fort McMurray is even rarer. My hope is that as we develop the waterfront there will be more matching amenities.”
Her first year in the restaurant business has seen its ups and downs.
Kanzig thinks less about her gamble now than she did in the dead of winter.
“I wouldn’t say we’re flourishing. We’re doing OK … If you had asked me two months into it, three months into it, if you had asked me when we were in the six weeks of 40 below (temperatures) and nobody wanted to come out and we’ve got staff working and an empty dining room, it was a little bit worrisome.”
Patio season is almost here, and soon there will be a more regular flow of locals and tourists through Snye Point Park. Kanzig’s restaurant has changed the dining scene here and she hopes to change the larger conversation.
“Let’s do our little bit to make our own lives better. Try to change the verbiage, the attitude. We have a lot of positive things still happening in Fort McMurray.”
Copyright Postmedia Network Inc., 2019