Northeast B.C. suffers as LNG delayed

Fort St. John mayor warns of “dire” outlook; Dawson Creek landlords eye soaring vacancy rates

Western Investor
May 3, 2016

Fort St. John Mayor Lori Ackerman: urged Ottawa to make decision on LNG expansion. - City of Fort St. John

Fort St. John Mayor Lori Ackerman says she brought a "dire" message to federal officials in Ottawa in April, hammering home the impacts the latest oil and gas downturn is having on Northeast B.C. 

For some Northeast B.C. landlords, dire may be an understatement.

At an April 25 council meeting, Ackerman reported on her two-day trip to Ottawa April 18 and 19, where she, along with five other regional mayors and representatives, met with Natural Resources Minister Jim Carr, Infrastructure and Communities Minister Amarjeet Sohi, and Opposition Conservative Leader Rona Ambrose.

The meetings were aimed to promote a liquefied natural gas (LNG) industry in B.C. and urge a speedy decision on Pacific Northwest LNG, the $36-billion initiative being spearheaded by Malaysia's Petronas and its Canadian subsidiary, Progress Energy. 

"What we took to Ottawa was the story of us," Ackerman said. "There are 70 per cent of some bank files at risk, our non-profit organizations are seeing their fundraising dollars diminished. It was really about the community and how that's just not sustainable."

Decisions on major projects such as Pacific NorthWest LNG must be made in "a timely fashion," Ackerman said. Though Statistics Canada reports regional unemployment at 9.7 per cent, she believes the number is likely higher as many local entrepreneurs who are out of work aren't captured in the stats because they don't qualify for employment insurance. 

"The situation in the northeast is getting more dire every day, so that's the message that we took," she said.

“The landlord party is over,” said Kevin Kurjata, Dawson Creek Real Estate Specialist with Century 21 Energy Realty.

In a missive to the Alaska Highway News, Kurjata detailed erosion in what had once been a high-flying housing market in Dawson Creek.

“The price of energy has plummeted and vacancy rates in Dawson Creek have sky rocketed. It used to be impossible to find a place to rent. Today, property management firms have given me vacancy estimates over 20 per cent. I presume that people that bought into the rental market at the high point are struggling to cover their costs and we have just started to see a few of those units hit the market. There are already some very good deals to be had, with some places priced as much as 16 per cent below what the same unit once sold for. There are most likely going to be more deals like it.”
Kurjata said that, unlike rental investments, the local residential market is seeing “slow and stable growth.”

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