Cash-heavy Cold Lake, considered the number two oil sands community in Alberta, is poised to become a white-hot market for residential landlords this year. Pub and restaurant owners should also feel the heat.
The reason: Imperial Oil will not built the customary on-site accomodation for workers as it expands its giant Nabiye oil sands project. Nabiye, already the largest extraction facility in the province, will boost production by 40,000 barrels of oil per day, or about 2.5 per cent of Alberta’s total oil sands output. Instead of living at camps on site, hundreds of high-paid employees will be looking for rental housing, meals and entertainment in Cold Lake, the closest town to Imperial's facilities.
Cold Lake Mayor Craig Copeland says his community is more prepared for this expansion than it was for previous Imperial projects, but concedes accommodation will be stretched.
"It's the rental market in Cold Lake that will get really tight," said Copeland, noting that this will pose significant challenges for lower paid workers in some other industries and for renters on the bottom end of the Department of National Defence pay scales at CFB Cold Lake.
Copeland says some significant hotel expansions and upgrades will help when work kicks off in September, but he doesn't expect there will be any significant multi-family housing projects completed in the community before work on Nabiye starts.
That means investors with rental capacity in the city of 14,000 are now sitting in a good position to cash in on the next boom. The uptick in oil investment will further grease Cold Lake, which reached an agreement with the province last year that will pump $11 million annually into city coffers starting in 2012. Under that deal, tax revenue from the Cold Lake Weapons Range will be diverted to the fast-growing community, Copeland explained.
