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Inuvik's big boom

The ups and downs, pros and cons of the latest wave of oil and gas activity to hit the Delta

Lynn Lau
Northern News Services

Yellowknife (Feb 25/02) - When the first of the oil and gas camps started up about a year and a half ago, Derrick Weitzel and his business partner Rose Ann Snow got into action.

They were both already involved in successful businesses in town, but in the fall of 2000, they formed Apun Contracting, a company that ferries workers and freight to and from the oil and gas camps.

They started out with one driver and one 15-passenger van. They've since grown to three full-time drivers and two vans, with another on its way.

Oil and gas activity has been heating up in the Mackenzie Delta since the winter of 2000-2001. And while Inuvik has seen its share of booms and busts in the past, this time is different.

This time, Inuvik, like Apun Contracting, is determined to soak up every last drop of value from the current wave of economic activity.

"There's a lot more small businessmen able to get fully involved, where the work is not going to some larger southern contractors," says Jim Guthrie, president of Arctic Oil and Gas Services and a veteran of Inuvik's resource sector. "A lot of the work is staying here -- the purchasing, the services. A lot of work has been done trying to develop the people who are here."

Inuvik experienced a similar rush on exploration in the mid-1970s, followed by a smaller boom during off-shore exploration in the 1980s.

This time, the Inuvialuit have their land claim settled, and in the terms of that agreement, provisions to make sure Inuvialuit benefit as much as they can from the development taking place on their lands.

Ripple effects

As money from the oil and gas sector trickles through the local economy, just about every sector of the economy is feeling an effect.

Canadian North and First Air have started offering more connections from Inuvik to hubs like Edmonton and Calgary. The Inuvik Chamber of Commerce opened again after four years of dormancy. NorthwesTel added a new phone exchange in anticipation of the growing demand for more and more phone, fax and cell numbers.

The town of Inuvik is seeing its tax base increase, and for the first time last fall, it put new housing lots on the market.

Meanwhile, construction is on the rise. In 2001, the town office issued 167 development permits for everything from renovations, new buildings, and landscaping projects. The total value: $27 million. In contrast, only 74 permits were issued in 2000, worth just $2.8 million.

Tye Barnes, the town's newly-hired development officer, says 2002 appears to be headed in the same direction.

Although there are no official statistics, those in human resources estimate that the unemployment rate is close to zero -- or at least at its lowest level in memory.

"The feeling we have right now is there's a lot of pressure, even on the jobs in town," says Gregg Hill, regional manager of the territorial income support program. "There seem to be very few people looking for jobs."

Hill says his caseloads for income support have been down about 30 per cent from last year at the same time. In 2001, caseloads were already lower than in 2000. He says there are currently about 150 people on income support, while a few years ago that number was closer to 400.

Worker's market

At last count, there were 20 camps in operation throughout the Mackenzie Delta, supporting seven oil companies which together employ an estimated 2,000 people, directly or indirectly. With so many camps using Inuvik as a hub for goods and services, businesses both aboriginal and non-aboriginal are benefiting.

"It's excellent right now," says Ken McDonald of McDonald Bros. Electrical. "We've had a 50 per cent increase in business from last year."

A shortage of skilled labour means he has had to hire eight new electricians from outside the region -- his employee roster now includes 15 electricians. The company flies them in, puts them up in the work camp behind the shop, and flies them out every six weeks for their breaks.

As Guthrie of Arctic Oil and Gas explains, "Companies have an obligation to hire as many Inuvialuit, aboriginal and other Northerners as possible, but as employment gets higher and higher, some companies have to go further afield because they're running out of the people available here."

For workers with the right skills, it's a seller's market. As news of the boom filters through the media and by word-of-mouth, the region is attracting potential workers from across the nation.

Side-effects of the rush

At Inuvik's Human Resources Development Canada office, manager Diana Martin says she fields about three calls a day from Southerners interested in coming to Inuvik. Although she agrees there are plenty of jobs around, she advises caution to those thinking about coming to Inuvik.

"Personally, I don't believe the jobs are as plentiful as Canadians have been led to believe," Martin says. "There's priority hiring for Northerners, and Southerners often aren't aware of that." She says the rumours of companies desperate for workers can lead people to come up without a job, on a one-way tickets, with no place to stay. She says often, job seekers are not be prepared for the weeks it might take to secure employment.

"We tell people, don't come up unless you've already got a job. The cost of living is high, there's no hostel, and the fact is, there's a limited number of jobs, especially for unskilled labour."

Some of those who were unprepared for a longer job search end up at the newly opened Turning Point homeless shelter.

Blair, a 50-year-old heavy equipment operator who didn't want to use his last name, was living in his truck for two weeks before the dropping temperatures forced him to move into the shelter.

He arrived in December from the Yukon expecting to be able to pick up a camp job in no time. Instead, he spent more than a month doing general labour in Inuvik for $12 an hour, before he got hired at one of the camps. The job was supposed to last three months, but after eight days, he was laid off. A few weeks later Blair landed a job at a different camp, only to be fired when he ran into trouble with a new foreman.

"Coming to Inuvik to get work -- I'd say don't bother," Blair says. "Some people may be lucky, but my own experience is it is about as bad luck as you can have. Even making $10 an hour in Edmonton, you're further ahead than making $20 an hour here in Inuvik. When I was making $12 an hour, all I could do was put gas in my truck and buy my food. I'd have been better off going down south."

He says the experience has left him disappointed and strapped for cash. "I'm leaving as soon as I get paid from the last job," he says. "I'm looking forward to getting out of here."

The 10-bed shelter where Blair is staying was opened as a pilot project in January by the Inuvik Alcohol Committee, to respond to what they say is a growing problem.

Derek Lindsay, the chair of the committee, says there are also other side-effects of the boom, even for people who do find jobs. He says alcohol and drug abuse increases with all the new money floating around. "It's disposable money and they don't know what to do about it," Lindsay says. At a time when Turning Point is in need of dedicated workers, Lindsay says the boom has made it difficult to hire staff. "Trying to find someone to work for $10 to $12 an hour, they just laugh at you," he says. Lindsay has a unique vantage point on the activity because he is also president of the Inuvik Chamber of Commerce, which has accumulated 56 members since opening in February 2001.

"Everything is relative," Lindsay says. "The cost of living has gone up, the wage costs are high and now for the average businessman trying to compete with the oil and gas business, you're totally out of luck. You have to dig in your pocket and pay comparable wages if you want to hire someone to work for you, and the price of the service goes up to cover the cost of the wages."

Looking ahead

How long the boom will last this time around is anyone's guess. Guthrie at Arctic Oil and Gas expects to see an increase in the years ahead if the proposed Mackenzie Valley pipeline goes ahead. "If some decisions are made to go forward with development, then activity will increase," he forecasts. "But if it's strictly still exploration next year, then I think we might start to see a decrease in the amount of seismic and a decrease in drilling."

Meanwhile, McDonald Bros. Electrical's Ken McDonald is just keeping his head down and making money. When asked how long he thinks the boom will last, he says, "we're not going to worry about that. We'll take her while she's there."