The Energetic City - Fort St. John, BC

In the 206 years since development first began in the community now known as Fort St. John, British Columbia, phenomenal changes have taken place, many of them in the last 20 years. Founded as a trading post in 1794, Fort St. John grew with the gold rush and with the construction of the Alaska Highway, and continued that growth with the help of discovery of the natural resources of oil and natural gas, development of a forest industry and the continued growth of agriculture in the North Peace region.

“Looking back over the last 15 years that I’ve been involved in local government, there have been some phenomenal changes and improvements,” said Fort St. John Mayor Steve Thorlakson. In 1986, when Thorlakson was first elected to council, the city was bankrupt. “We had more liabilities than assets, taxes were increasing, and vacancies were running at 30-40 per cent.”

“Since that time we have made some huge progress in getting our own house in order — all of the property the city took back in tax sales has been sold, almost all of it has either been developed or is in the process of being developed,” said Thorlakson. For the last three years the city has had over $25 million in building permits a year, which he says is “quite astounding”, when you think of the amount of construction that has taken place in the past couple of years. Fort St. John’s construction increase has put the city on a par with Prince George, a city which is close to five times the size of Fort St. John.

ENERGY —
The nature and character of the oil patch has changed dramatically, said Thorlakson. “It used to be that about 65-70 per cent of our oil patch activity was exploration-driven. At this point in time, it’s more like 40 per cent exploration, and 60 per cent production-driven. Production is considerably steadier, more stable and more consistent — the type of economy we have today is totally different from that of 15 years ago. The booms and busts of the past, I think, are unlikely to repeat themselves.”

The petroleum industry in the North Peace is a driving force in both the local and provincial economy, with revenues from this area supplying the provincial government with much-needed funds in times when the economy of the rest of British Columbia is not faring as well as in the North. As the hub of the industry in British Columbia, and the gateway to the vast resources of northern British Columbia and beyond, Fort St. John is also home to a large service sector. Companies located in Fort St. John provide everything from road building and equipment hauling services, to well-testing, pipeline construction and drilling to a wide variety of companies from across Canada and the United States which come to the North Peace to seek out new reserves and to produce proven wells.

Construction of the Alliance Pipeline continued throughout the winter, and will deliver 37.5 million cubic metres of natural gas per day through 24-inch and 42-inch pipelines to consumers in Chicago, upon completion. Currently, the winter construction of this project is finished for the 1999-2000 season, with work expected to resume in May, when the pipeline will be completed from Mile 73 of the Alaska Highway, through to Taylor, BC. In January 2000, the reconstruction and expansion of the Solex Gas Liquids Extraction Plant in Taylor was completed and the plant is once again fully operational.

The provincial government created the Oil and Gas Commission in September 1998, and since that time it has succeeded in streamlining the applications process for oil and gas companies, as well as providing opportunities for First Nations to be involved in the industry, through consultation and employment, and acting as a source of information for all stakeholders in the industry.

As a result of this streamlined process and higher natural gas prices, in January and February 2000, a new record was set in the petroleum industry when, according to figures supplied by the Oil and Gas Commission, there were 130 rigs operating in British Columbia. The previous record was 98 rigs operating in 1980.

FORESTRY —
The forest industry too, has seen many changes in the past few years. There has been a significant amount of development in the industry over the last 15 years, said Thorlakson, but what may be more apparent is the promise of the future of the industry.

“We have a value-added manufacturer right in town, we are anxiously awaiting the announcement of Louisiana-Pacific and Slocan proposals. The potential there is absolutely staggering — LP alone was talking in the neighborhood of $280 million, creating 475 direct jobs, and 1200 indirect jobs which could trigger a population increase of an additional 3,000 - 4,000 people, over and above our normal rate of growth, which is about 2.5 - 3 per cent,” he said.

Because of the potential population growth, the LP and Slocan proposals could trigger housing starts like the city has never seen, said Thorlakson. For years the city had 20 housing starts per year, and in the last few years, the city has seen 130 – 140 housing starts a year — a figure which places Fort St. John well ahead of Prince George. When construction of the Slocan and Louisiana-Pacific plants begins, this will put the city’s construction value into the “mega-millions”, said Thorlakson.

Of the forestry companies currently operating in the North Peace, Canfor has two lumber mills, located near the airport and in Taylor. The Fort St. John mills produces approximately 168 million board feet of lumber each year, while the Taylor mill produces 73 million board feet of lumber.

The Fibreco Pulp mill in Taylor, which is owned by Slocan Forest Products, produces approximately 240,000 tonnes annually of bleached chemi-thermo mechanical pulp ranging from high brightness tissue and towelling grades to low brightness newsprint grades of paper, made from northern softwood woodchips.

AGRICULTURE —
Agriculture too, has seen many changes in the past 20 years, Thorlakson said. “Twenty years ago we were mainly a grain and seed economy in the North Peace, livestock was a major industry, but not nearly as significant as it is now. The cattle ranchers have been having some tremendously good years. At this point in time, there is more cattle in the Peace Country than there is in the Cariboo, which used to be regarded as the cattle country of BC.”

The North Peace, said Thorlakson, has among the lowest debt per farm and the lowest number of farm failures in the entire country. “There are lots of prospects as well, and many specialty things going on — everything from ostriches to lily bulbs, llamas and bison are being raised very successfully here. Agriculture continues to be a growth industry.”

The majority of the province’s grains are grown in the BC Peace, including canola, barley, oats and wheat, and at the same time, a world-class grass seed industry is emerging, competing on a level-playing field with grass seed growers in the United States.

Cattle ranching has grown by leaps and bounds over the past two decades, with some very large operations having between 15,000 and 20,000 head of cattle. Each year approximately 60,000 calves from the BC Peace find their way to cattle auctions.

Sheep farming too, is a fast growing facet of BC Peace agriculture, with the number of sheep sold at the annual sheep auction in Dawson Creek growing each year, and setting records five years in a row. In 1999, the auction introduced video, whereby producers can show and sell their sheep without having to make the long trek to Dawson Creek to sell their produce. They then deliver the sheep directly to the purchaser.

DEVELOPMENT —
All sectors of the economy in the North Peace are growing at a solid, steady pace, said Thorlakson. While energy continues to be the facet of the economy which has gained the most attention, it is not the only area which is growing.

With that growth comes new development, and the city has received proposals and expressions of interest from a variety of businesses and companies which are interested in making investments in Fort St. John. In addition to the potential forest industry expansions proposed by Slocan Forest Products and Louisiana-Pacific, the Murray GM group has purchased a piece of land on 100 Ave. near the Alaska Highway to build a new car dealership, with an estimated value of $16 million. A Pizza Hut and Taco Bell facility will soon be completed, and a multiplex movie theatre is planned for the former Safeway location in the Totem Mall. Recently, Safeway completed construction of British Columbia’s largest supermarket in Fort St. John, something Thorlakson says they would not likely do on idle speculation. They must have faith in the long term stability of the community to construct such a project, he said.

“All development in the city has to be landscaped,” said Thorlakson. “The residents of this community are entitled to have a high quality of life, and we must have high standards to provide that quality of life.”

Although the city is insisting on high standards for projects which are constructed in Fort St. John, this doesn’t mean the community is not business-friendly. “People from all over are looking at Fort St. John as a place to do business, and we will work with them.”

City manager Colin Griffith says the city’s arms are wide open to accommodate any business that wants to invest in the community. “We will do anything we can to facilitate their needs and get them involved in the community,” said Griffith. “The increase in oil and gas activity means we will have to continue to upgrade the city infrastructure, to handle the existing population and the expected growth.”

FUTURE —
Over the past few years, the city has worked to re-position itself to make Fort St. John much more attractive and competitive than in the past. Thorlakson says that by creating a strategic plan in cooperation with the Chamber of Commerce to change the city’s self-image, they have dramatically improved the sense of pride and confidence in the community, through the use of a new slogan — The Energetic City — city beautification campaigns and the hosting of Oil and Gas Week.

Under the guidance of City Manager Colin Griffith, the city has moved away from “micro-management”, said Thorlakson, and into broader policy making, goal setting and looking toward the future. “The outcome of that was a whole range of policies to put the city on a very sound financial footing, to substantially ease the burden on our taxpayers, and to enhance the quality of life in the community.”

As proof of their commitment, the city has not increased taxes for seven consecutive years. This has yielded approximately $12 million in savings, particularly to the business community. The city has a policy to not take on any long-term debt in its general fund account — apart from the recently completed water system and the sewer improvement project currently under way, Thorlakson says the city will be debt free in five years.

The next phase, Thorlakson says, is to make sure the city is as competitive as possible with Grande Prairie for the energy service industry. Much of this industry is still run out of Grande Prairie, yet more and more of the industry is moving into the region north of Fort St. John to Fort Nelson and the Fort Liard area. “It makes an awful lot of sense for that to based out of Fort St. John, not Grande Prairie.”

“We’re competitive now — and that’s taking everything into consideration, including PST (according to a government competitiveness study). With that, we think we’re going to see a lot more development, and we’ve got to be positioned so we can handle it,” said Thorlakson. “We need to remain focussed on making sure we’re trying to correct some long-standing problems, and that the city we hand over to our children is one that will be on a proper footing, be fairly financed, and provide the best quality of life to everyone possible.”

“I don’t think it’s exaggerating to say that we could very well be the size and have the cosmopolitan nature of Grande Prairie within 15 years,” said Thorlakson. “Our economy is one of the most diverse in the province,” Thorlakson said, based on figures gathered by the provincial government. “If we have a serious downturn in one sector, it will cause serious problems to individuals and businesses. We’re in a situation where, because we have that diversification, we are much better positioned for the future.”

This article (written by me) was originally published in the May/June 2000 issue of NorthWest Business Magazine.