After 'doom and gloom' decade, Fort McMurray readies for a boom

Business is picking up as Fort McMurray prepares for a possible oil boom, says William Gilbert with Gilbert Roofing, Keyano College instructor Shane Ganong, realtor Paige Cyr and Fort McMurray Chamber of Commerce CEO Dianna De Sousa. (Bob Grieve/CBC, Tiphanie Roquette/Radio-Canada, Vincent McDermott/CBC)Social SharingThe Alberta community synonymous with meteoric oil booms and crippling busts is now staring down another potential wave of economic fortune.

Already signs are pointing to a boost in growth in Fort McMurray with rising home prices, increased investment in the oilpatch, widespread hiring and longer lines at the Tim Hortons drive-thru.

Much of the growth is in anticipation of a new oil pipeline to the West Coast, as proposed by the Alberta government. On Thursday, the federal government is expected to declare the project is in the national interest.

As more families and businesses move in, roofer William Gilbert sees his business growing alongside Fort McMurray.

With nail guns and roofing hammers, one of Gilbert's crews finishes up attaching shingles on a black two-storey house on the western edge of the community. His 20 employees are working as much as they can to keep up with demand. Though business hasn't spiked overnight, Gilbert expects steady hiring over the next few years.

"I see us doubling, if not tripling," he said. "We're slowly getting a boom."

A series of federal and provincial announcements aimed at growing oil production over the last 12 months are fuelling the sense of optimism, including a new West Coast oil pipeline being developed by Alberta and Ottawa.

In addition, the federal government has wiped away certain environmental policies such as the oilpatch emissions cap, while speeding up the regulatory process to approve major projects and introducing new financial incentives for investors.

The Alberta government aims to double oilsands production to eight million barrels per day by 2035.

The Syncrude oilsands mining facility operates north of Fort McMurray. (Kyle Bakx/CBC)The last decade in the region has been lacklustre for many businesses, with little economic growth and a declining population. However, the period was useful in allowing the local government to catch up on building roads and other important infrastructure.

Now, people are moving back, pushing the population to an all-time high.

"It's been very doom and gloom here since 2015," said Kyle Vandecasteyen, a councillor with the Regional Municipality of Wood Buffalo. "We're ready for growth."

Some construction crews have seen a threefold increase in work, said Dianna De Sousa, the president of the local chamber of commerce.

"It's organized chaos. They have to turn away work," she said. 

After several years of a stagnant economy, she said there is excitement and anticipation, mixed with some trepidation.

"The challenge is going to be labour and workforce without a doubt," said De Sousa, since some tradespeople are already in short supply.

Fort McMurray is prepared for a possible oil boom after several years of infrastructure improvements, says Kyle Vandecasteyen, a councillor for the Regional Municipality of Wood Buffalo. (Vincent McDermott/CBC)An oil boom will require a plethora of workers from drivers and engineers to mechanics and pipefitters.

The local college is trying to gear up, but it faces a similar predicament in finding enough instructors.

"I'm hoping when this boom happens, we have the manpower," said Shane Ganong, a heavy-duty mechanic and instructor at Keyano College.

He worked in the oilsands during the last boom, including long shifts at all hours of the day.

"We don't need to put people through such extreme workloads that they put in the past," he said.

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Housing demand is up about 30 per cent this summer compared to last year, said realtor Paige Cyr, "So we are eating up our housing supply quite quickly."

The real estate market hasn't been this strong in many years, and while prices are rising, Cyr said some houses are still selling $200,000 below when they were purchased 10 or 15 years ago. 

"People are coming back to the region. People are ready to invest," she said.

The common sentiment in the community is a need for a slow and controlled pace of growth, since Fort McMurray was unprepared during past booms.

A gold rush-type atmosphere brought workers from across Canada, lured by the highest wages in the country. There were too few houses, daycares and schools. Businesses were poaching workers from each other. Grocery stores had never-ending lineups. 

"All of a sudden the bust happens and so many people that are local here are underwater in their mortgages. And that's happened a few times," said Kris Yarish, the chief operating officer of Alcor Facilities Management, which has operated in Fort McMurray for over 50 years, providing construction, work camps and other services.

He remembers the 2006 boom in particular, when it took four times as long to drive to oilsands sites because of so much traffic on the highway.

As he stood in front of his company's booth during a recent oil trade show, the largest such event in nearly a decade with more than 200 businesses, he couldn't help but notice the positive atmosphere.

"Having a new pipeline makes a difference, 100 per cent," he said, providing confidence throughout the industry.

Still, he's cautious knowing how a potential oil boom could always be derailed.

Large oilsands companies have been reluctant to invest tens of billions of dollars and take on sizeable debts to build megaprojects, of which the last one was completed in 2018. Investors no longer prioritize a company's growth as they once did, instead focusing on regular returns of cash and share buybacks.

Past oil booms in Fort McMurray were driven by multiple oilsands companies all building at once, which meant competing for labour, equipment and supplies. These days, there are only a handful of major oilsands producers after several years of consolidation.

There are other factors too, said Yarish, such as the ongoing trade war with the United States and continued turmoil with global oil prices.

An aerial view of Fort McMurray's downtown. (Bob Grieve/CBC)Major infrastructure work continues in Fort McMurray as heavy machinery moves dirt along the riverbank to better protect the downtown from flooding. The municipality has invested in sewer, water, road and other projects to better position the community for the next wave of growth.

Still, there's more to do, including a continued push by some locals for a new highway to better connect the community. 

The $1.5-billion East Clearwater Highway has been discussed since the devastating 2016 wildfire, which highlighted how Fort McMurray only has one highway out of the community.

The proposed project would add a second route to the east, which would also improve access to some oilsands facilities in the region.

"If the oilsands is going to be growing and have a new pipeline, you want to build that highway, not only because it makes business sense for the industry, but for safety as well," said Marty Giles with NorthStar Ford, who has lived in the community for more than 30 years.

His dealership in Fort McMurray sells about 1,200 F-Series trucks each year and he sees all the signs of economic growth.

That's why he is hiring another 30 people to push his staffing level to about 300 workers.

"I haven't seen this much optimism actually in Fort McMurray for the last decade as I do today," he said.

Kyle Bakx is a Calgary-based journalist with the network business unit at CBC News. He files stories from across the country and internationally for web, radio, TV and social media platforms. You can email story ideas to kyle.bakx@cbc.ca.

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