Fort McMurray

Fort McMurray's Economy: Poised to Boom Again

The urban service area of Fort McMurray is the largest within the Regional Municipality of Wood Buffalo. Although no longer considered a city due to its amalgamation with Improvement District No. 143 on April 1, 1995 to create the Municipality of Wood Buffalo, many locals, politicians, and media still refer to it as a city. Fort McMurray's economy is strongly dependant on the oil extraction industry with approximately 60% of its labour force being employed by oil sands projects and related industry. Fort McMurray is the staging area for most of the oil sands projects located in the northeast Alberta, serving as the transportation hub for the area. Fort McMurray's airport is serviced by both of Canada's major airlines with scheduled service to nine destinations across Canada. Accessing the region via highway is restricted to Alberta Highway 63, which due to the heavy industrial demands of the region; boast some of the highest tonnage per kilometre rates in Canada. The Government of Alberta has committed to twinning the route to meet the increased demand and construction commenced in summer 2007. Fort McMurray is also served by Canadian National Railway, which operates a rail line between Edmonton and Fort McMurray for commercial traffic.

Besides the involvement in oil production, Fort McMurray has a strong presence in the natural gas, pipeline, forestry, and tourism industries. There has been a concentrated effort by the local government to encourage diversification to help balance and lend stability to the local economy. The emergence of eco and cultural tourism to the area is seen as an important component to Fort McMurray's growth strategy.

In addition to its major industries, Fort McMurray also serves as t he home to Keyano College, a publicly funded college and vocational institute specializing in diploma programs focused on training workers for careers in oil production and the college is also home to the region's arts community, hosting over 50,000 visitors annually to performances in its theatre and recital hall.

Strong job prospects and a relatively low cost of living has resulted in a massive influx of people from other provinces in Canada, most notably Newfoundland and Labrador, over the past few years. Between 2002 and 2009, the Regional Municipality of Wood Buffalo experienced an average annual growth rate of 9% as oil sands development in the area grew at an unprecedented rate. The unemployment rate for the Wood Buffalo Region has decreased from 4.4% in 2009 to a current rate of 3%. To attract workers to the oil sands projects, companies offered increasingly competitive wages which, in turn, resulted in rapid inflation in the local economy. This has caused average household income in Fort McMurray in 2009 to be $164,122, which is significantly higher than the national average. This rapid increase in housing prices and cost of living has removed much of the incentive to relocate from other provinces and consequently the population growth in the area has slowed over the last 18 months. Going forward, it is expected that the Regional Municipality will once again experience a boom in population growth with the growth rate expected to exceed 10%in 2011.The Regional Municipality of Wood Buffalo census district is forecast to double its population over the next 20 years. Current forecast models suggest that Fort McMurray has a maximum potential urban service area population of 96,774.The total population in the last municipal census, conducted in 2008, was 72,363.

Growth and Employment

Growth in the area is expected to continue as only a small percentage of the oil reserves have been extracted. In total, there are 45 oil sands projects worth an estimated $97.1 billion either under construction or commissioned to start within the next two years. Oil sands mining production is expected to increase by 176% by 2028, while oil sands in-situ production is expected to increase by 518% over the same time period. Currently there are only 53.66 hectares of vacant developable land located within Fort McMurray, enough to support job growth of an additional 717 workers. It is estimated that employment growth in Fort McMurray will increase by 17,650 full-time jobs by 2031.

Regional Municipality of Wood Buffalo top five employers are:

Syncrude: 2,272 Employees
Suncor: 2,758 Employees
Royal Dutch Shell: 1,280 Employees
Canadian Natural Resources: 1,305 Employees
Nexen: 5,500 Employees

Regional Municipality of Wood Buffalo's major economic sectors by employees are:

Oil Sands and related industries (48,769)
Business Services (6,145)
Retail Trade (4,314)

All five top employers are Oil and Gas companies, again highlighting the region's dependence on this sector. Within this sector, by far the most influential in the region is the Oil Sands which as shown above, employ nearly eight times as many people as the next economic sector.