Should Fort Mac Still Exist?

As a reporter covering the Fort McMurray wildfire—“The Beast,” as it would come to be known—I met dozens of people fleeing the disaster, each with a heart-­rending story. A soft-spoken young dad, an immigrant from the Philippines, had doused his boys’ heads with water and begged for Jesus in Tagalog as ten-metre walls of flames licked at their car. There was a hardened woman in her fifties, an oil worker with decades on the patch, whose truck was running on fumes by the time she got to a whistle stop south of Fort Mac. But it is Sarah Davies’s story that still haunts me. Hours earlier she had escaped Fort Mac in socks, running toward the flames as she tried to escape them. She was still dressed in the baggy blue t-shirt she had worn as she watched the fire swallow her home. Only the cement foundation survived. More than anything, she just wanted to get home.

When she did finally return to Fort Mac this July, to that spot, surrounded by charred bikes and SUVs—some of it still covered in the white silica foam meant to keep ash from floating downtown—she told me she wished she could be almost anywhere else. In her case, the old adage about homecoming has been turned on its head: not only can she go home again, it is in fact the only place she can go.

Davies’s decision to stay is not driven by a sense of nostalgic attachment, or career prospects; she has not been able to return to work, and it took her partner months to find a job. Rather, what brought them back to Fort McMurray, and keeps them there, is the peculiar economics of rebuilding after disaster.

Most of the world watching the fires saw the disaster on a human scale: the individuals who escaped clutching a teddy bear, a cherished grandparent’s letter. But the fire’s aftermath is unfolding on a scale that seems anything but human. The insurance bill alone for the ice storms of 1998 came in at $1.9 billion in today’s dollars. The Alberta floods of 2013 caused $1.7 billion in insured property damage. Estimates for the wildfire run as high as four times that. Canada has never seen anything like it.

Sarah Davies’s entire neighbourhood of Waterways was lost. So was Beacon Hill. Half of Abasand is gone. In all, 2,400 structures in the city were levelled, totalling ten percent of the northern oil capital. Over the next couple of years, insurers are expected to pump $4.6 billion into northern Alberta’s economy, the first real sign of life since oil crashed two years ago.

Reports of this infusion of money and jobs have been met with excitement, and understandably; it is a bit of good news for a province that has not seen much of it. (“Our last boom,” the wry joke goes.) But in the rush to rebuild, it seems many key questions are being ignored. Do people like Sarah Davies want to go home? Does it make sense to rebuild a town that people were beginning to leave even before the fire? Should Fort McMurray continue to exist exactly as it did two years ago, before being pummelled by back-to-back disasters?

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In a sense, Fort Mac, unusually for any city, has the opportunity for the second time in its lifetime, to start fresh. Although a town of some kind has existed at the confluence of the Athabasca and Clearwater rivers since Cree and Dene traders used the site to offload beaver, much of Fort McMurray sprung up in the last decade and a half, with the boom in full swing. Thanks to new technologies—and royalty deals—Alberta’s oil sands began producing a million barrels a day by 2004, up from 30,000 in the 1980s. As more and bigger megaprojects broke ground, economic migrants fleeing the Philippines, Ethiopia, Pakistan, northern Ontario, the British Columbia interior and, especially, Atlantic Canada grew the local population to 90,000. They worked twelve-hour shifts earning “double-double overtime pay”: twice the wages and pension deposits. The median age was just 31.

For better and for worse, Fort Mac was the city that $150-a-barrel oil built, almost overnight. Newcomers dubbed the place Fort Make Money and, later, Fort Crack. Almost half the town’s residents were earning more than $100,000 a year, five times the national average. Infused with the kind of per capita cash that cities like Toronto and Halifax can only dream of, the Rural Municipality of Wood Buffalo, which includes Fort McMurray opened the North’s best airport. A footbridge linking MacDonald Island to the downtown, as well as a new marina, riverwalk and mixed-used condo development, are still in the works.

All of this helps deflect from Fort Mac’s more notable missteps: the low-density, ticky-tacky suburbs it allowed to sprout whole in the last decade, ignoring all the hard-earned lessons of urban planning that cities to the south are desperately trying to correct.

Now, the twin misfortunes of the oil bust and the fires present an opportunity: to build smarter. To make Fort Mac denser, greener, more livable, less prone to bottling up with traffic jams rivalling Vancouver’s. To infill, to mitigate against future disasters by avoiding building on forested land and flood plains. To design a more imaginative, coherent city that does not just replicate the sprawl of cities that grew in fits and starts, extemporaneously, over a century or two. And, of course, to do it all while falling oil prices are top of mind. If anyone can pull it off, it should be the northern burg with a population the size of Sarnia’s that imported its design team from Europe, and put together an expenditures budget just shy of Saskatchewan’s. It should be Canada’s youngest, richest community.

But in order to rebuild intelligently, government and business leaders as well as public stakeholders need to have a more fundamental conversation, about how and where to rebuild Fort McMurray. Does it make sense to pump billions of dollars into a resource town that is faced with a declining resource economy? By January of this year, the Canadian Association of Petroleum Producers was reporting some 35,000 oil patch jobs lost due over the year thanks to the slump in oil prices, and the Canadian Real Estate Association announced that housing sales in Fort Mac were down 44 percent from the year prior, with more than $100,000 trimmed from the average selling price of a single, detached home. A rebuilding plan for Fort McMurray should surely include conversations about the city’s long-term economic prospects, its sharply reduced growth projections of the city’s population ten or 20 years hence, and more radical ideas such as redrawing the city’s borders to account for reverse economic migrations, away from Fort Mac to account for them.

And yet, for now, the city is allowing little more than insurance rules to dictate the vision. Home insurance policies are designed such that, if homeowners rebuild on their old lots, insurers will replace their homes at full value. Most homeowners are also offered a discounted cash buyout—say, $300,000 for a home that might cost $400,000 to rebuild. But, for those with a mortgaged property and, say, $400,000 still owing to the bank, a buyout is not a pragmatic option. So they are rebuilding.

Construction has even rolled ahead in those parts of Waterways, Sarah Davies’s neighbourhood, that are sitting on a flood plain, even though this is barred by pending provincial law (part of provincial flood zone restrictions tabled in response to the 2013 floods, the worst Canada has ever seen). Wood Buffalo left that critical decision up to Waterways residents themselves, by surveying them. When a majority—surprising no one—chose to rebuild exactly where they were before, the municipality passed a bylaw allowing it. James Pomeroy, one of Canada’s top hydrologists, blamed the decision on a lack of “political will.”

An insurance industry insider who has spent considerable time in the region since the fire says the industry has even got together and informally agreed to waive “same-site requirements” for Waterways residents. That is, insurers, not government, were prepared to foot the bill to rebuild flood-prone homes at full value on higher ground. He says the municipality was well aware of the offer, yet still chose not to take it. It is hard to imagine anything but politics driving such a decision. Many residents had made it clear they wanted to stay, and so, even with the prospect of having the costs covered of rebuilding elsewhere, council appeared to take the less politically messy option. (It may have been particularly bad timing for it to pursue an unpopular idea, given council’s summer decision to double the pay of councillors to compensate for the increased post-fire workload. The move made Wood Buffalo’s councillors among the country’s highest paid, and was met locally by howling ­outrage.)

Nor is Waterways the only neighbourhood facing such tough decisions. Debates over rebuilding versus relocating should have been held more thoroughly across Fort Mac. Canadians are, after all, willing to put such questions to indigenous communities in the wake of crisis. Relocation has become non-indigenous Canada’s go-to solution to every on-reserve emergency, from the school shootings at Lac La Loche in northern Saskatchewan to the suicide epidemic at Attawapiskat in northwest Ontario, to the unemployment crisis at Kashechewan on James Bay. The absence of a sustaining economic basis for a community, specifically, is often cited as a reason to relocate reserve populations. Those are communities that are old and established with deep and cohesive cultural roots and ties to the land. Fort Mac, on the other hand, is composed largely of an itinerant, migrant community that is a decade or so old—and some of its residents were already considering moving on. Given the number of transplanted Newfoundlanders around the oil patch, many McMurrayites would also be familiar with the approach. Five fading Newfoundland fishing villages have requested relocation. According to provincial legislation, residents would be paid $270,000 apiece to resettle to larger centres, saving taxpayers millions by allowing St. John’s to pull the plug on disused ferries, diesel shipments and other services.

There is another argument for a more rational approach. When it comes to rebuilding neighbourhoods flattened by fire, the hefty costs associated with re-establishing services—repairing damaged roads, sidewalks and infrastructure—should be a serious concern. At this critical juncture, it seems fair to ask whether this is what Fort Mac wants, or needs—and whether the town might not be better off buying out residents of burnt-out neighbourhoods or offering land swaps, either inside town or elsewhere in the province. In many cases they might pain those still reeling from the disaster. The prospect of uprooting might be unimaginable for some. But the question remains of whether we are in another boom-and-bust cycle for oil prices or whether this is the last gasp of the fossil fuel age, and a harsher economic reality may well force the question if thoughtful and responsible decision makers do not.

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Earlier this fall, Melissa Blake, the popular, four-term mayor of Wood Buffalo, announced she would not run in next October’s election. There have been reports and rumours of internecine squabbling as her part-time council, made up of vice-principals, realtors, construction workers and radio reporters—who were once used to green-lighting new roads and community centres—faced the Herculean task of remaking a city. That effort has hanging over it not the glow of opportunity, but its ghosts.

Two years of plummeting oil prices have sent the Alberta economy into freefall. In the months leading up to the fire, a lot of McMurrayites were kept awake at night by fears of losing their jobs and their homes, and of being forced to flee the tanking economy. Eight days before the fire, officially known as MWF-009, began on the Horse River trails south of Abasand, Alister Cowan, the CFO of Suncor, Canada’s largest energy producer, admitted Fort McMurray will never again see the megaprojects that had turbo-charged the national economy. “The years of large, multibillion-dollar projects are probably gone,” Cowan told an audience of oil insiders. On that day, some 700 Fort Mac homes were on the market. That is, four percent of the city had already made the decision to pack up and go.

In a world glutted by oil, Alberta’s marginal output no longer makes economic sense. This summer, Saudi oil set an output record, pumping eleven million barrels a day through July, and Iran is ramping up toward pre-sanction production levels. And while OPEC members are discussing a plan to reduce output, in the last decade the United States has doubled its oil output, part of the so-called shale revolution.

In the time since the rout began, the oil industry has cancelled projects totalling tens of billions of dollars. Within four years, construction jobs could be cut by 84 percent, according to one report. With a $47 barrel, we appear to be coming up on the first year in two decades without a construction start in the patch.

Six months on, residents of Fort Mac say the camaraderie, toughness and optimism that united them after the fires rolled out have been replaced by an undercurrent of anger. Those who lost homes are frustrated, impatient. The timid civic planning and the reluctance of municipal and provincial leaders to wade into less politically expedient solutions has not left them with a clear and easy path. They are fighting with insurance companies, fighting with Wood Buffalo over the cost of demolition permits, building permits, new fees for soil disposal and the mishmash of regulations that can change on a dime. McMurrayites do not know whether to stay or walk away and repay their debts in a place with a less shaky future. They are anxious, some of them still suffering post-traumatic stress disorder. One woman I know has been crippled by it. Another has not come home yet from Morinville, north of Edmonton; she says she starts shaking and crying whenever she points her car north on Highway 63.

Amid all this, the question here no one seems yet ready to face, not lawmakers, not planners, not residents, is what life in Fort Mac will look like after this last hurrah, when the rebuilding projects wind down and the boomtown begins a slow fade. The opportunity to address it still exists, but it will not for long.