January 20, 2016 6:04 pm
Updated: January 20, 2016 9:30 pm

Fort McMurray mayor says community is facing a ‘firestorm’ with low oil

WATCH: Crude prices are pretty low already, and it's proving detrimental for the oil sector. Reid Fiest looks at how Fort McMurray, a town that thrived because of the oil industry, is coping.

A A

FORT McMURRAY, Alta. — Life in Fort McMurray feels like it’s in slow motion. Traffic is down. Lines are few and far between.

So, it’s a good day for Brad Lucier when only one work truck sits outside the offices of HVAC Solutions Ltd.

“We’ve noticed a 20 per cent drop in business,” says Lucier.

That meant the small business owner had to lay off about 10 of his 35 employees.

He’s trying to keep his remaining staff busy by changing the way they work and lowering his prices.

Story continues below
Global News

“Business typically came in because there wasn’t enough people to do the services,” he says. “Whereas now we have to talk to the people, belly to belly, and ask for the business.”

READ MORE: Fort McMurray’s food bank sees record use in 2015, as real estate market cools

Most of the job losses in the Fort McMurray area have come from the cancellations or delays of oil sands expansion projects.

Oil production has actually stayed relatively constant — even increased slightly — but it’s uncertain for how long it will stay that way with the price of crude sliding.

“Nobody is making money, or making very much money at these prices,” says Terry Abel from the Canadian Association of Petroleum Producers.

So why not shut off the taps?

A few oil companies have decreased their output, but the majority don’t have that option. For them, technically and economically, it’s not possible to slow down the process.

“They would stop putting money in to maintain production at that level,” says Abel. “But, for the most part, they will continue to operate and try to get some return on that investment.”

The mayor of the Regional Municipality of Wood Buffalo calls the situation a fire storm.

“It just looks like we’re getting shots on all side,” says Melissa Blake.

Blake says a number of policy changes in Alberta are adding to the uncertainty, including corporate tax increases, a proposed carbon tax and a new royalty regime expected later this month.

READ MORE: Fort McMurray’s airport, hotels and restaurants hurting with oil’s slide

The mayor isn’t necessarily opposed to these changes, but she worries about their timing.

“What we’ve experienced in the past is a tremendous opportunity to provide back to our province and our country and now we’re in a situation where we don’t know what’s next?” says Blake.

Reports that federal infrastructure stimulus cheques could first arrive in Alberta and Saskatchewan may be some relief.

But Lucier says it’s a challenge to stay positive.

“There’s no stability right now,” he says. “No one knows what’s going to happen.”

© 2016 Shaw Media

Report an error

Comments

Global News