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Fire, flood, COVID and oil crash: Fort McMurray businesses aim to bounce back after losing the chance

Fire, flood, COVID and oil crash: Fort McMurray businesses aim to bounce back after losing the chance

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 control of 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 series of misfortunes that followed, each with its own stressor, left its mark on this northeastern Alberta community.

The 2016 forest fire burned neighborhoods, the 2020 flood devastated much of the city center, 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 experienced a big fire. Some others know what it feels like, but I think Fort McMurray is one of the only places to me that knows how all of these things feel, the one after another, ”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.

The Horse River Fire began on May 1, 2016. It destroyed more than 2,400 buildings in and around Fort McMurray, causing approximately $ 3.8 billion in insured damage. (CBC)

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 have to evolve and be more sustainable and think outside the box,” said Nayef Mahgoub, the founder of the company.

“It was difficult. In general, things haven’t improved. 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 caused the North American benchmark price to 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 began 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 installations to to close, which reduced Canada’s crude oil exports and depressed the national gross domestic product in the second quarter of 2016.

The community began to rebuild after the blaze in the years that followed, and there was optimism again as 2020 began to think the oil industry would see better days soon.

But, instead of a turnaround, more bad luck loomed on the horizon.

A grocery store was surrounded by floodwaters on Franklin Avenue in Fort McMurray in April of last year. The flood damaged dozens of businesses. (Greg Halinda / The Canadian Press)

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.

LOOK | Why companies say the heart of Fort McMurray needs a turn:

Despite recent struggles, Fort McMurray is proud of the future of the community, says Owen Erskine, owner of Mitchell’s Cafe. 1:14

Strain and recovery

The impact of the floods, the pandemic and the fight against hydrocarbons 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 ends – 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 grow, a wave of workers is not expected to flow into the community. as in the past.

The oil sands continue to be a significant economic and employment force in the Fort McMurray area. It is hoped that a rebound in oil prices will lead to a rebound in the sector. (Kyle Bakx / CBC)

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.

Kevin Weidlich, CEO of Fort McMurray Wood Buffalo Economic Development and Tourism, pictured here in 2019, says high-tech opportunities could boost the local economy. (Jamie Malbeuf / CBC)

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.

LOOK | Thinking outside the box is a necessity, says the business owner:

Be nimble and think outside the box, among other strategies, says Nayef Mahgoub of Akron Engineering. 1:35

The last hurdle, right?

Denise Allen can only smile as she remembers 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 city center, but no customers are allowed in due to current restrictions in pandemic matter.

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.”

LOOK | Stay positive and hope the luck of the community improves:

The downtown area avoided wildfire destruction, but was hit hard by flooding last year, says Denise Allen of 57 North Kitchen + Brewery. 0:48

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