Anyone who buys a restaurant knows the business is not for the faint of heart. In an oil town, where fortunes can rise or fall in an instant, the hospitality industry can be particularly tricky.
Owen Erskine understands the situation well after taking over Mitchell’s Cafe in downtown Fort McMurray, Alta., In 2014 when oil prices hit incredible highs before they hit the ground.
As someone who was born and raised in the community, fluctuating commodity prices is nothing new to Erskine. But the string of misfortunes that followed, each with its own stressor, left its mark on this northeastern Alberta community.
The 2016 wildfire burned neighborhoods, the 2020 flood devastated much of downtown, and the COVID-19 pandemic has affected everyone, especially recently, given the number of cases. pointed at work sites in the tar sands, prompting the Regional Municipality of Wood Buffalo to declare a local state of emergency.
“Calgary has been through flooding. Slave Lake has had a big fire. Some others know what it does, but I think Fort McMurray is one of the only places to know how all of these things feel, each one. after the others, ”said Erskine, who had to abandon plans to expand his business.
This week marks the fifth anniversary of the wildfire, which for many is a reminder of how long Fort McMurray’s struggles have dragged on and raises questions about how the business community can get back on its feet.
Evidence of the struggle is most visible downtown, with dozens of empty storefronts and office buildings.
Ten years ago, Fort McMurray was an economic magnet, attracting tens of thousands of workers and tens of billions of dollars in oil sands investment.
These days, however, some local businesses have to look elsewhere for work. This includes Akron Engineering, which helps governments and energy companies develop infrastructure projects. The company is based in Fort McMurray, but has had to work as far away as Calgary and Saskatoon.
“We need to evolve and be more sustainable and think outside the box,” said Nayef Mahgoub, founder of the company.
“It’s been tough. Things haven’t improved, in general. However, the people here in Fort McMurray are very resilient. They are tough people.”
Fire, flood and COVID-19
Things have changed since the early 2010s, a scorching period that saw oil prices soar to over US $ 110 a barrel.
Starting in 2014, crude oil prices began a long and painful slide that ultimately saw the North American benchmark price drop below US $ 27 per barrel in February 2016. The layoffs hit the oil industry hard, especially 1000 workers dismissed in one day in 2015.
Then came the forest fire.
The Horse River fire started on May 1, 2016 and quickly burned a dangerous path to Fort McMurray. More than 80,000 people were evacuated from the community.
Ultimately, the fire destroyed more than 2,400 buildings in and around Fort McMurray. The fire caused approximately $ 3.8 billion in insured damage.
The natural disaster forced several oil sands facilities to temporarily shut down, reducing Canada’s crude oil exports and plummeting national gross domestic product in the second quarter of 2016.
The community began to rebuild after the fire in the years that followed, and there was again optimism in early 2020 that the oil sector would soon see better days.
But, instead of a turnaround, more bad luck loomed on the horizon.
An international price war dumped cheap oil onto the market as the pandemic dried up demand for fuel. Amid the uproar, oil prices briefly fell below $ 0.
The collapse in prices has led oil companies to drastically reduce their spending plans. Layoffs continued to haunt The area. COVID-19 infections also hit workers in tar sands camps and mining sites.
Just months after the start of the pandemic, severe flooding along the Athabasca River plunged much of downtown Fort McMurray.
It is estimated that around 100 businesses were damaged and today, more than a year later, less than 50 have opened.
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Strain and recovery
The impact of the floods, pandemic and oil fights was not easy to manage, with the unemployment rate still above 9% in March.
“It’s a very difficult time for businesses,” said Dianna de Sousa, executive director of the local chamber of commerce.
There are new fears of flooding this spring. Local emergency officials spent at least $ 10 million preparing in case the floods threaten the community again.
Despite the challenges, efforts are underway to give business a boost, including a ‘Shop Local’ gift card program launched this month and more. grant program funding from the regional municipality to help downtown stores pay for renovations.
The local housing market has also looked healthier this year, recording the highest number of first-quarter sales since 2014, widely interpreted as a manifestation of confidence. Residents continue to speak hopefully about the future, talk about community pride and support each other.
Of course, the region, like the province, continues to rely on its largest sector.
There is hope for a sustained rebound in oil prices – fueled by an expected surge in demand once the pandemic is over – that will bring better days and stability to the oil sands.
But it is also a sector facing great challenges as part of efforts to reduce greenhouse gas emissions to try to prevent climate change.
Although oil sands production continues to increase, an influx of workers is not expected to flow into the community as in the past.
Local economic development officials see new opportunities in energy innovation – including artificial intelligence and automation technologies – used in the oil sector.
“There is a growing demand for skills in the digital economy and the knowledge economy,” said Kevin Weidlich, CEO of Fort McMurray Wood Buffalo Economic Development and Tourism.
“If we can foster that here, we can apply the same learning in different places around the world. Fort McMurray can also be a center of excellence for global mining.
Like other communities in Alberta, Fort McMurray is also looking for ways to diversify.
The Economic Development Office launched Startup YMM last year, with the aim of helping entrepreneurs start new businesses in the community.
Weidlich also sees great potential for tourism to the region, naming a long list of local adventures such as hunting and fishing lodges, dog sledding, and views of the Northern Lights.
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The last hurdle, right?
Denise Allen can only smile as she recalls the boom years of the early 2010s, when she earned $ 80,000 just in tips as a waitress in one year. Most servers these days earn just enough to cover their bills, she says.
Instead of congested roads and highways shuttling workers and supplies to the area’s bustling tar sands facilities, Allen can now directly see Franklin Avenue, the main downtown strip, with sometimes only a few vehicles in sight.
“The city center is really suffering. Everyone is trying to do their best and stay positive, ”she said. “Every year we say, ‘This is our year, this will be our summer.’ But then we have the fire, we have the flood. “
Allen is the general manager of 57 North Kitchen + Brewery, which opened in 2019. It is one of the largest restaurants in the heart of town, but no patrons are allowed in due to current restrictions. government on pandemic issues.
Still, Allen appreciates how the restaurant was able to survive by having the brewery sell its products in stores across the province and by running two take-out kitchens outside the building.
She can only hope that the pandemic will be the final obstacle in Fort McMurray’s string of woes.
“Floods, fires. We just hope there aren’t any locusts.”
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