As the urban centre at the heart of Canada’s oilsands industry, Fort McMurray has seen more than its share of ups and downs.
A decade and a half ago, the northern Alberta community was this country’s most famous boom town. High oil prices helped to drive unprecedented demand for the thick, viscous bitumen that lies beneath the earth’s surface here, and workers flocked from around the world to cash in on the bonanza.
Then crude prices crashed, layoffs began, and the frenzy of oilsands-related construction dried up. The party, it seemed, was over.
Now, with the official opening of the long-awaited Trans Mountain pipeline expansion just days away, those who live and work in this region hope their fortunes are once again headed for an upswing.
‘What supports them, supports us’ — a community tied to one industry
Fort McMurray, population 68,000, is situated in northern Alberta in the heart of the Athabasca oilsands, the world’s third-largest proven crude oil reserve.
The oil industry permeates every aspect of life here. Every morning, oil workers clad in blue-and-yellow coveralls line up at the local Tim Hortons for double-doubles, and diesel trucks and big rigs churn up dust on their way out to industrial work sites. The airport gift shop sells “Canada’s Oilsands” sweatshirts and local rec centres and educational facilities are emblazoned with the names of their oil company sponsors.
With so many livelihoods dependent on oil, all eyes here are on the expected opening this week of the Trans Mountain pipeline expansion, a years-in-the-making megaproject which will soon start shipping Canadian crude to export markets.
“It’s hard to quantify the value of the … pipeline to a region like ours,” said Dennis Vroom, senior strategic advisor for the regional municipality of Wood Buffalo, which encompasses Fort McMurray and the surrounding rural area.
“We are so heavily supported by oilsands operators in the region, that when things that are important to them — like the Trans Mountain pipeline — happen, there are direct benefits to us. What supports them, supports us.”
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The Trans Mountain pipeline, which was bought six years ago by the federal government, is Canada’s only oil pipeline to the West Coast. The expansion will increase its capacity from approximately 300,000 barrels per day currently to 890,000 barrels per day, improving access to export markets for Canadian oil companies.
The path to get here hasn’t been rosy. The pipeline project, which took more than four years and at least $34 billion to construct, has been marred by environmental protests, delays and budget overruns.
The federal government, which paid $4.5 billion for the project in 2018, is likely to take a significant writedown when it tries to sell the completed project, experts say. And Trans Mountain itself remains locked in a dispute with its oil company customers about the rising fees it wants to charge them to ship their product.
Still, oilsands producers have been waiting for this pipeline for a long time. Export issues have been a thorn in the side of Canadian energy companies for years, due to a lack of pipeline capacity from Alberta’s oilsands region to coastal tanker loading facilities.
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That shortage of pipeline space, combined with refinery and transportation costs, is the reason Canadian oil producers typically take a price discount on their product compared with their U.S. competitors.
It has also inhibited oil companies’ ability to grow, so the anticipation when it comes to Trans Mountain is real.
“It’s an exciting time. It’s been a long time since we’ve had some new incremental egress for Canadian products,” said Drew Zieglgansberger, executive vice-president and chief commercial officer for Cenovus Energy Inc., a major contracted shipper on Trans Mountain.
“We had some growth and efficiency projects on the books already, but (the pipeline expansion) does enable some stability in the market in the near and medium-term that really does give us some confidence to add more growth to the company.”
The additional export capacity that Trans Mountain will provide means that 2024 is expected to be a boom year for oil output.
A recent TD Economics report suggested Canadian oil production this year could grow by between six and 10 per cent year-over-year, the equivalent of between 300,000 and 500,000 barrels per day.
Even on the low end of the forecast, this growth rate would match the average annual oil output growth rate Canada saw in the booming years between 2010 and 2015, when commodity prices were high and Alberta’s oilsands region was undergoing unprecedented levels of construction and activity.
But today, the oil price downturn of the last decade forced companies to tighten their belts. Rather than spending on major capital projects, oil companies have spent the last couple of years of strong commodity prices paying down debt and rewarding shareholders with healthy dividend payments.
Technological advancements have also meant that companies now know how to increase their oil output without massive increases in capital spending.
Cenovus, for example, plans to grow its production by 150,000 barrels a day over the next five years.
But the company — which once thought it would build an entirely new processing facility at its Narrows Lake oilsands asset, now under development — has decided instead to use new technology and engineering methods to connect that site with the central processing facility at its currently operating Christina Lake project, located about 150 km southeast of Fort McMurray.
Like Cenovus’ other oilsands projects, the Narrows Lake development will use a drilling method called steam-assisted gravity drainage to extract the thick, heavy oilsands bitumen. But because of these changes, it will cost much less and require far less construction than originally planned.
“The oilsands of 15 years ago, we just didn’t have some of the technologies or the operating experience and practices that we have today,” Cenovus’ Zieglgansberger said.
“It’s allowed us, from an overall development cost, to really lower the cost of producing oil.”
‘So Many Things Have Changed’
Many people’s mental image of Fort McMurray is synonymous with the period when the community was a bustling boom town defined by heavy traffic, high housing costs and money that seemed to grow on trees.
Sarah Thapa, the owner of Avenue Eatery & Café which opened in 2021, remembers those days. She moved to Fort McMurray in 2012, during the height of the oilsands boom.
“I got a job as a server at one of the local restaurants, and they made seven to 10 grand just by selling breakfasts,” she said.
“It was packed every day, it didn’t matter if it was Monday, Tuesday, 6 a.m. in the morning — every table was taken,” Thapa said. “Every restaurant, every small business in town, was doing so well.”
Owner Sarah Thapa works at Avenue Eatery and Café in Fort McMurray, Alta., on Thursday, April 25, 2024. Many businesses have felt the strain of the pandemic, natural disasters and the oil crash.
“COVID happened, the flood happened, the fire happened — and we’ve not seen the town the same way,” Thapa said. “So many small businesses have already closed and left town … so many things have changed since I moved here.”
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While Thapa said she welcomes the Trans Mountain pipeline expansion, she knows this year’s record oilsands output is not going to turn Fort McMurray back into the boom town of yesteryear. The companies are leaner, they’re producing more oil but spending less, and the days of the construction-heavy oilsands expansion projects are over.
The climate change problem
Another factor that makes today’s oilsands different is ever-growing environmental scrutiny. Since the last industry boom, Canada has signed the Paris Agreement, an international treaty on climate change that commits signatories to greenhouse gas emissions reduction targets. The world has faced a growing number of climate-related extreme weather disasters, and calls to reduce society’s reliance on fossil fuels are intensifying.
The process of extracting oilsands bitumen is a comparatively emissions-heavy way of producing oil. And while companies have been able to reduce the greenhouse gas intensity per barrel, the industry’s overall emissions footprint is increasing due to increased production. In 2021, the oil and gas sector was responsible for 28 per cent of Canada’s overall emissions.
The industry believes it can continue to grow while reducing its environmental impact. Six of the largest oilsands companies have banded together to form what they call the Pathways Alliance, through which they are proposing to build what would be one of the largest carbon capture and storage projects in the world.
That project would involve building a 400-kilometre pipeline to transport carbon dioxide emissions from 20 different oilsands production facilities in northern Alberta and embed them safely in an underground storage hub. If it goes ahead, it could mean a new era of construction in the oilsands.
“That’s a $16 billion project right there that’s looking to start construction,” said Lisa Sweet, director of business and investment attraction for Fort McMurray-Wood Buffalo Economic Development.
“There are investment opportunities that are coming, and we’re out there to promote that.”
But the Pathways Alliance companies haven’t yet made a final investment decision and there are a number of uncertainties hanging over their project. One of these is the federal government’s proposed emissions cap, which is supposed to be finalized sometime this year.
The government has said the cap is meant to cap pollution, not production, but the industry has warned the cap will have “unintended consequences” — scaring away investment and potentially causing companies to curtail their output and spending.
It seems likely that the environmental impact of the oilsands will continue to be scrutinized for years to come, and that too has an impact on the local community.
“Our community is so closely tied to the oilsands that sometimes the negative image of the oilsands that gets painted unfairly translates to our community as well,” Vroom said.
A new era
The Trans Mountain project has taken so long to build, and the oilsands industry has had so much time to prepare, that it is expected to be filled soon after coming online. Many in the industry believe Canadian oil output will exceed pipeline capacity again within a few years, perhaps as early as 2026.
But for the time being, the Trans Mountain pipeline expansion represents a new era — for both the industry and the community most closely linked to it. The next few years may not be a repeat of the heyday of Fort McMurray, but they do represent a revival of opportunity.
“People come here for economic opportunity, and that hasn’t changed and that won’t change,” Sweet said.
“The Trans Mountain pipeline just reiterates that message.”
Back at Avenue Eatery & Café. Thapa echoed that sentiment. “I’m optimistic about the town picking up again,” she said.
“We may not see the businesses doing as well as they were 10 to 15 years ago, but overall I think we’re going to come back. I think we’re going to see some positive changes, I really do.”
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
After a long day at a work event in July, Kathryn Kozody was relieved when she spotted a car with a lit-up taxi sign.
She thought it was odd when the driver told her she’d have to pay her fare with a debit card. Still, a tired Kozody hopped in the car.
“I was like, ‘Fine, it’s kind of weird, but let’s go home,'” said Kozody, who lives in Calgary.
Nothing else seemed off — until the next day when she discovered that almost $2,000 was missing from her bank account. On top of that, her debit card had someone else’s name on it.
Kozody concluded that the taxi driver was a fraudster who, during the debit card transaction, recorded her PIN, stole her card and handed her back a fake.
“I started freaking out,” she said. “It’s terrifying when they have your debit card.”
It took Kozody about two weeks to get her money back from her bank, and she’s still rattled by the experience.
The day after taking what she thought was a ride in a taxi, Kathryn Kozody of Calgary found out someone had withdrawn almost $2,000 from her bank account. (James Young/CBC News)
“It really felt like an invasion of privacy and a violation to be a victim of this scam,” she said. “I really don’t want it to happen to anybody else.”
The taxi scam isn’t new; Toronto and Montreal have been seeing it for years. But the crime is becoming more widespread.
This summer, police in Calgary,Edmonton and at least five cities in southern Ontario, including Kingston and Ottawa, posted warnings online that they had received multiple reports of the scam.
Police and the Canadian Taxi Association say the fraudsters have a helping hand: with the click of a button, they can purchase a generic — but official looking — taxi roof sign on e-commerce sites like Amazon.
Edmonton Police posted this alert on Facebook in July, warning people about an ongoing taxi scam. The city’s police department says that it received about 10 reports of the scam that month. (Edmonton Police/Facebook )
“They do have a moral responsibility to at least sell the signs to individuals that are properly licensed,” said association president Marc André Way.
However, the U.S.-based company continues to sell the product to all customers.
“These lights are legal to sell in Canada,” Amazon told CBC News in an email.
‘Eye-popping’ numbers
The taxi scam has several variations but typically ends the same way: the victim pays with a debit card, then the scammer secretly steals it and hands the victim a similar but fake card. Shortly thereafter, money disappears from the victim’s account.
Ron Hansen, deputy chief of police in Sarnia, Ont., said his department received 12 reports of the scam in July, with one victim losing $9,900.
Toronto police report that since June 2023 the department has received 919 reports of the taxi scam, totalling $1.7 million in losses.
Jessica Chin King of Toronto said after a recent cab ride, she got a suspicious activity alert from her bank. She learned $600 had been withdrawn from her account. (Craig Chivers/CBC)
The numbers are “eye-popping,” said Toronto police detective David Coffey.
“When they do get a victim, they are quick to go right into the bank accounts. They’re quick to empty them out.”
Jessica Chin King of Toronto said just 15 minutes after a recent cab ride, she got a suspicious activity alert from her bank. Turns out, $600 had been withdrawn from her account.
“I was like, ‘Wow, I can’t believe that just happened.’ I was in shock,” said Chin King, whose bank later reimbursed the cash.
She said she too was fooled by the taxi sign atop the car.
“I was in the car with somebody who wasn’t a taxi driver. Anything could have happened,” she said. “I was thankful that it was only my bank [account] that was compromised.”
Taxi light for $35 on Amazon
CBC News bought a taxi sign from Amazon for $35. It has a magnetic strip on the bottom, so it easily sticks to the top of a car.
To power the light, an attached wire can be run through the driver’s window and plugged into the car’s auxiliary power outlet, also known as the cigarette lighter outlet.
The taxi association says licensed taxi drivers typically get their roof signs from speciality suppliers, and they are hardwired to the car — not powered via the cigarette lighter.
“When you see that … it’s obvious that it’s not a legitimate taxi,” said Way, the association president.
“This is not a safe, practical way to distribute the trusted ‘Taxi’ signs,” he wrote.
CBC News ordered this $35 taxi sign on Amazon. The attached wire can be run through the driver’s window and plugged into the car’s auxiliary power outlet, while the lights for licensed drivers are hardwired into the vehicle. (Sophia Harris/CBC News)
But Amazon told Way — and CBC News — the signs will remain on its site, because the company isn’t breaking any rules.
“It’s going to be quite difficult, I think, for anyone to stop Amazon from selling a product that is perfectly legal to sell,” said Toronto criminal lawyer, Daniel Goldbloom. “It’s true that these taxi signs can be used to commit scams, but kitchen knives can be used to commit murder — and we don’t stop retailers from selling those.”
But Way isn’t giving up hope.
He says the taxi association also plans to ask other online retailers, such as Temu and eBay, to stop selling the taxi signs and will lobby provincial governments for legislation that regulates the sale of the product.
However, Coffey said he believes the best way to fight the taxi scam is to educate people about it.
“Never, never give another person control of your debit card,” the detective said.
Victims Chin King and Kozody also want to spread the word.
“The more people know, the less likely it is to happen again to somebody else,” Kozody said.
