The Alberta government wants to incentivize oilsands companies to hire more locals. Here's why

The Fort McMurray oilsands have long hosted a large number of transient workers. Now, there's a fresh push for companies operating at the epicentre of Canada's oil and gas extraction to make their workforce more local. 

"Work camps are just not good for people and not good for communities," said Alberta's Minister of Energy and Minerals Brian Jean. "They don't help our community and they don't help the communities that people are from." 

Jean says the fly-in-fly-out model is "hollowing out" resource towns.

"We are making it an advantage for people to fly from other provinces and other countries to come here and take our resources, to take our jobs, and actually take that money back to their hometown, he said. 

"That's not reasonable. That's not right. And quite frankly, I find it disgusting."

Jean, who is also the MLA for Fort McMurray-Lac La Biche, has found an ally with the municipality, he said. 

According to the municipal census, in 2021 the total population of the Regional Municipality of Wood Buffalo was just over 106,000. Over a quarter  — about 27,000 — lived in work camps. 

Sandy Bowman, the mayor of Wood Buffalo, said in a statement that increasing the region's population is his priority, including those who are there temporarily. 

"As someone that loves this region and knows it's a great place to live, work and raise a family, we want as many people living here as possible, including workers that are living in oilsands project accommodations," he said. 

"I have always believed that if the requirement is for people that work here to live here, that workers will choose us over the alternative if given the opportunity and a real chance to get to know the community." 

Incentives versus penalties

Alberta Premier Danielle Smith said her government would prefer to encourage rather than penalize industries to hire locally. 

"There's two ways to approach it: give incentives or give penalties," she said in an interview with CBC News. "And I like to be on the incentive side."

Smith said incentives could include creating more short-haul flights, so workers are able to travel more easily between the remote sites in the Fort McMurray region, and rebates for companies that hire locally. 

"Those are the things that are under active discussion because I think it's important," Smith said. 

"I think it could potentially save the companies money, but also it builds community and that's really important for us to be able to do."

A northern living allowance for people wanting to settle in the region is also under consideration, she said. 

Camps a legacy of boom times

Heather Exner-Pirot, a senior fellow and director of natural resources, energy and environment at the Macdonald-Laurier Institute, says incentives make the most sense.  

"Rather than punish companies, incentivize workers, incentivize people to want to live in Fort McMurray," she said. 

Exner-Pirot said the fly-in-fly-out model and camps evolved from the older model of housing workers. 

Starting in the 1950s, the country saw the development of industry towns created by resource companies, she said. 

But company towns were expensive, so fly-in-fly-out became more prominent, Exner-Pirot said. 

"We saw that in Fort McMurray in the last boom when we were really boosting up the oilsands. And that is the model that the oilsands now have developed. And that works for them," she said. 

During the oil boom in the early 2000s and 2010s, oilsands companies were criticized for putting excessive pressure on Fort McMurray and straining social services, health care and education, Exner-Pirot said.

"But there was pressure, actually, for oilsands companies to take care of their workers, to not put the burden on the community. And now we are seeing kind of the opposite narrative," Exner-Pirot said. 

Exner-Pirot said she understands why Fort McMurray and the Wood Buffalo region want to raise their population, including by making oilsands companies hire more locals. 

"I appreciate the struggles they are having economically," she said. 

"And what people don't appreciate is that they have been left behind on the housing boom and all those things, and that many people are still underwater, paid high prices for their homes a decade ago, and still are not at a point where they could sell it and retire it," she said. 

Oil companies aren't opposed to hiring local

Oil companies are approaching the prospect of making their Fort McMurray workforce local — at least in part — cautiously. 

Kendall Dilling, president of Pathways Alliance, a consortium of Canada's largest oilsands companies, said in an email the industry is committed to hiring locally, "while also employing workers from outside the region to effectively staff operations." 

Imperial Oil and Suncor, two of the biggest companies in the oilsands, say they are exploring options to increase the local Fort McMurray workforce.

Suncor said nearly half of its workforce — about 8,000 people — work and live in the Fort McMurray region with plans in place to localize more of its workforce. 

A full transition to a local workforce may not ever be totally feasible however, said Dianna De Sousa, executive director of the Fort McMurray Chamber of Commerce.

"Someone working a 12-hour shift and depending on transit times on both sides, there's safety challenges," De Sousa said. 

"It would be wonderful to have all local. But if we're realistic, based on some of those distances, it would not be a practical element."