It may seem at times the Bow Valley is insulated from the rest of Alberta, but with the dramatic decline in oil prices a chill has gone out across the development industry.
Over the past few months, the price of a barrel of oil has sunk to below $60 U.S., sending a province heavily reliant on the black gold into panic mode. Oilsands projects are to be scaled back significantly, layoffs are happening in the industry and provincial coffers are depleted due to the Province making budget decisions each year based on the price of oil.
In Canmore, council expressed its concern on Tuesday (Dec. 16) during its final budget meeting, even making a motion to reduce expectations of how much money is expected to be brought in by new development.
Mayor John Borrowman made the motion to remove $20,000 in revenues from planning and development linked to new development in the community in 2015.
“The development climate now is a little bit less certain and we may be better to not be quite as optimistic as we were six weeks ago,” Borrowman said. “At the end of the day, if it comes in, that is great. I guess it is sort of a precautionary thing not to overstate projected revenues.”
Manager of planning Alaric Fish said administration discussed the issue with the Bow Valley Builders and Developers Association last week and expects some slowdown in the industry of one sort or another.
“A lot of companies are already cutting dividends and scaling back projects and hiring,” he said. “There are a number of projects that have already started, so it makes good sense to finish those and not leave them half completed.”
BOWDA executive director Ron Remple also said, unlike in 2008 when a number of projects went under and saw delays before completion, work underway in Canmore at present will move forward.
“Existing projects already started are solid and they will continue, but into the future … people are being laid off in the oil industry and that has a trickle down effect on communities and Canmore is definitely susceptible to that,” he said.
Remple said the local industry would be more cautious with starting new projects and likely wait for more sales volumes before breaking ground.
There is also a question around how sinking oil prices and revenues by the province from natural resources might affect the provincial budget this spring. While both Canmore and Banff have expressed concerns over grant funding, which has been decreasing already, some in Canmore worry about funding for flood mitigation.
Banff-Cochrane MLA Ron Casey said recently that flood mitigation is a priority for Premier Jim Prentice.
“I have not heard any suggestion that flood mitigation is on the chopping block,” he said. “We are not broke, we are going into a time when we will be squeezed a little bit more than normal and I haven’t heard anything to suggest mitigation won’t be moving ahead.”
Canmore is looking at a $40 million debris flood retention structure in Cougar Creek to be constructed in 2016. So far, the municipality has acquired $19 million from the province’s flood recovery erosion control grant and $2 million from the disaster recovery program.
There is, however, no word yet on $4 million from Alberta Transportation and $11 million from the Alberta community resiliency program grant for the project. Administration indicated it expects word in the new year on whether those funds will be approved by the government.
