FORT MCMURRAY, ALBERTA — The parking lot in front of the Franklin Suites is empty.
The lobby, once a popular spot with visiting geologists, engineers and oil industry managers, is also deserted, except for front desk clerk Mary Anne Guray. She came here from the Philippines eight years ago as a nanny. But as the oil industry boomed, it created other jobs and opportunities in the community.
Things began changing after June 2014, when the price of oil began to fall.
“This is the worst — for me,” she says with a hospitable smile in spite of it all. “In 2008, there was a downturn, but it didn’t last long.”
The word among oil executives who pass through town on their way to the mine sites is the slump could last until late 2017, early 2018, she says.
The plunge in the world price of oil, from a high of $100 (U.S.) a barrel to $30 in just 18 months, has already taken a huge toll on the country. It has wiped out 40,000 direct industry jobs and an estimated 150,000 indirect ones. Canada’s economy has lost $50 billion in national income — roughly $1,500 per person, according to the Bank of Canada.
It has taken a big toll on Alberta, which is now in recession and it is magnified in communities like Fort McMurray.
If Alberta is home to Canada’s oil and gas industry, this city 430 kilometres northeast of Edmonton is ground zero. With a population of roughly 125,000 people—about 40,000 of them “fly-in, fly-out” oil-field workers—Fort McMurray is a rough-and-tumble frontier town. It has seen at least half a dozen booms and busts in the decades since geologists first discovered the massive oil sands in the Athabasca basin, one of the richest deposits of black, sticky bitumen in the world.
The main street is lined with shopping plazas, fast-food restaurants, hotels and a massive GM dealership full of pickup trucks. The sprawling Timberlea subdivision is jammed with hastily constructed homes. The pride of the town is MacDonald Island Park, Canada’s largest community recreation centre. Expanded in 2010, it houses a full gym, a curling rink, two NHL size hockey rinks, an Olympic-sized pool, children’s play areas, a fitness centre and more.
The oil sands mines lie roughly half an hour’s drive outside of town. But virtually every job here — from welders and pipe fitters, hotel cleaners to restaurant servers — depends on the industry’s success.
The feeling in Fort McMurray is not unlike the one you’d get in southern Ontario when a key employer like an auto plant or a food processing factory shuts down. Albertans have seen the boom-and-bust cycles of oil, so many thought the downturn was just another blip.
But the dip is lasting longer than expected, and many citizens are more worried now than they were a year ago. They still believe better times will come back, but they’re getting very anxious about when that will happen.
“We’ve seen blips before,” says Melissa Blake, the four-term mayor of the regional municipality of Wood Buffalo, which counts Fort McMurray as its largest community and the Athabasca oil sands as its largest geological feature. “This one is different.”
From the window of her office, Blake can see the line of pickup trucks at Fort McMurray’s most popular Tim Hortons. It isn’t very long these days.
The slow-down is a change from the not so distant days of managing explosive growth.
“For the last four or five years, we’ve all been stuck in traffic jams, we were all unhappy because the on-street parking was ridiculous, you couldn’t get a Tim Hortons coffee. They couldn’t get staff at Tim Hortons because they couldn’t hire anybody. It was pretty frustrating.”
The downturn is an opportunity to play catch-up, she says. Labour costs are falling, making it cheaper to invest. The cost of housing, the cost of services in town, the ability of the oil industry to compete globally had all got out of control during the boom, she says.
“Maybe this time, with it going on so much longer, we can get things right.”
The city’s revenues are unaffected so far. The workers living in camps on the oil sands sites weren’t contributing to the property tax base, and the oil sands companies, all big property taxpayers, are still operating, she notes. “We may see some more unpaid tax bills this year but we haven’t seen that yet,” she said.
But projects based on future growth are now on hold. She’s hoping Wood Buffalo will see some of the infrastructure dollars promised by the federal Liberals in their first budget, saying the need is greatest now in rural communities for things like water and sewer services.
Local business such as Mitchell’s Cafe are adapting, says owner Owen Erskine, a lifelong Fort McMurray resident. When the catering orders from the oils sands sites stopped last January, Erskine says he focused on the local market. His gourmet homemade sandwiches appeal to white collar workers and those working construction in the town.
Matt Voigt, another long-time resident, who owns the Harley-Davidson dealership, says he surpassed his sales target last year by a huge margin. He’s selling fewer clothes and accessories, but people are still buying motorcycles, he says.
Both the food bank and the hospital met their fundraising goals for the year. Anyone who is struggling is getting support, Blake says.
“We’re a very generous community.”
“We have been through circumstances like this before. It gives you heart that there will be a flip side. We have gone through intense growth, which was challenging and frustrating. And so, frankly, the onset of this has not been a dramatic hardship for most. But now because it’s going on so much longer, you’re starting to see sombreness in the community. More of that thoughtfulness.”
And with that sombreness comes a new, rising concern for some: Housing.
Hotel worker Guray’s husband lost his job as a janitor in May 2015. He worked cleaning executive offices at the oil industry sites outside the city, she explained. As the price of oil plummeted, those companies slashed expansion plans, and some of the work camps closed.
Now she’s worried they won’t be able to hang on to the home they bought last year. A modest row house built in the ’70s costs $500,000 in Fort McMurray, where sky-high wages also brought sky high inflation during the boom. Average house prices, at $560,000, are the highest in the province, higher even than Calgary, where the oil industry is headquartered.
“Maybe we’ll just have to surrender the keys,” Guray says, echoing a popular phrase in town that refers to handing the house back to the bank for resale and sucking up the loss on your down payment. “A lot of people already did that.”