Fort McMurray is the quintessential Alberta boomtown where houses now sell for more than in Edmonton and Calgary and rents for a two-bedroom apartment can top $2,000 a month. In just two decades the municipality has exploded from 32,000 people to 67,000 and it has seen a 27 per cent increase in population since 2006, which has pushed real estate values skyhigh.
So where is the next Fort Mac, the next boomtown emerging? We looked across Western Canada and found four contenders that could see the type of growth that has made Fort Mac an investor destination for 20 years.
Cold Lake, Alberta: Pop 14,400. Just south of Fort McMurray, Cold Lake is already the number two oilsands community in Alberta. Last year Imperial Oil greenlighted the giant Nabiye oil sands expansion project, the largest such facility in the province, accessing 280 million barrels of reserves and pumping 40,000 barrels a day, or about 2.5 per cent of the entire Alberta production. For its $2 billion plant, Imperial will need a construction crew of 1,000 through this year and next.
Imperial is not alone: Shell, Husky, Cenovus and Canadian Natural Resources are all active near Cold Lake and total oil production is forecast to hit 400,000 barrels per day by 2020. (Fort Mac's daily production is 1.5 million barrels). Nabiye is being built without on-site accommodation. That means hotels are full, restaurants busier, and rental accommodation will be scarcer. And it will only get busier. Seven companies, including Imperial and Baytex, have announced plans to either build new or expand existing projects in Cold Lake, most within four years. Mayor Craig Copeland says the city needs housing for at least 1,000 people: but it has few permits in place for new hotels, rentals or condominiums. It looks a lot like Fort McMurray 20 years ago.
Dawson Creek BC Pop: 12,000 The entire Peace region of Northern BC is a prime investment area, but Dawson Creek - as a major service hub and an historical centre - has the best nibs to be tapped as the local latest Fort Mac. Right now the Peace Region has 64,000 people, but it is expected to balloon to 123,000 or more within the next seven years as the Site C dam and giant mining and pipeline projects forge ahead. Spectra Energy, which opened a natural gas processing plant in Dawson Creek last year, will soon cement plans for an 850-km pipeline from the Dawson Creek area to the northeast Coast. As well, Shell Canada, with Asian investors and TransCanada Corp. are planning a $4 billion pipeline from the Dawson Creek area gas fields to the proposed LNG plant at Kitimat. This project will require 2,000 to 2,500 construction workers. The vacancy rate in Dawson Creek is already near zero. The unemployment rate is 4 per cent.
Estevan, SK. Pop. 12,000. Estevan is on of the largest cities in the oil-rich area of Southeast Saskatchewan. It is the site of the world's largest carbon capture storage project, a multi-million development that starts this year,
Estevan is also a service hub for the giant Bakken oil deposit. About 40 per cent of Saskatchewan's $1.4 billion in annual oil and gas sales flows from this region. Bakken holds about one billion barrels of oil and new horizontal drilling is triggering a boom in hiring and investment.
Estevan has a near zero rental vacancy rate and demand from transient workers means that two-bedroom apartments now rent for north of $1,100 per month, the highest in Saskatchewan. The City of Estevan is offering two-year property tax holidays, and other incentives, to anyone who builds permanent rental apartments.
Meadow Lake, SK. Pop 5,100. This is a tiny town with a big future in northwestern Saskatchewan. Cenovus Energy recently bought up the assets of a junior oil play in the area, which together are said to have more than a billion barrels of oilsands-type deposits. Immediate potential is 100,000 barrels of oil per day. We have great potential for both oil and gas" said Gary Vidal, an accountant and mayor of Meadow Lake. "Some say we could be the next Fort McMurray.".Meadow Lake recently annexed 450 acres of land for future development. The city is selling fully serviced residential building lots for around $60,000. This is a groundfloor opportunity: the town needs housing and retail and lots of it if the Cenovus potential pencils out.
