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Oil sands benefits spill over to other provinces, industries

Passengers wait for their bags at the overcrowded Fort McMurray airport on February 15, 2013.

Aaron Vincent Elkaim/The Globe and Mail

Just a decade ago, the airport in Fort McMurray, Alta., was a sleepy place with mostly domestic fliers. But times have changed with the ramped up oil sands development in northern Alberta.

Passenger traffic has risen 37 per cent in three years, says Scott Clements, president and chief executive officer of the Fort McMurray Airport Authority.

"What you have now is an airport literally bursting at the seams," Mr. Clements said. "We're putting nearly a million passengers through an airport that was designed to only handle a quarter of that volume."

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The economic implications of the oil sands boom go beyond the companies doing the exploration and drilling. The industry needs suppliers of all types, from professional engineers and geologists to companies that provide legal services and transportation.

Over the next 25 years, employment in the oil sands is expected to grow to 905,000 jobs, from 75,000 jobs in 2010 – with 126,000 of those in provinces outside Alberta, according to a 2012 Conference Board of Canada report.

Back at Fort McMurray's airport, a new larger terminal is under construction. The facility has also doubled its staff and begun its first non-stop service to Puerto Vallarta, Mexico. More international flights will come this summer.

According to the Conference Board report, oil sands-related ripple effects will be felt across the country.

"The Fort Mac-to-Newfoundland service carrying workers back to their home has been very successful for us," Air Canada spokesman Peter Fitzpatrick said. Newfoundland and Labrador, British Columbia and Saskatchewan are the largest source of oil sands workers, according to the report. "You go where the resources are, where the need is."

Nearly one-third of the supply-chain employment effect will occur outside Alberta, with Ontario being the largest beneficiary. The province's manufacturing sector can expect increased demand for steel pipes, metal valves and instruments for navigation, measuring and control. The flow of people from Asia to the oil sands also means B.C.'s transportation and travel-related industries will see a spike upward in business.

Another beneficiary of oil sands development is Keltek Safety Apparel, a garment manufacturer in Winnipeg that makes fire-resistant clothing for the oil and gas industry.

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"The oil and gas sector is an important and growing portion of Keltek's business," the Conference Board states, "and it has become a major focus of its marketing efforts."

Its close proximity to the oil sands, partnerships with local launderers in Fort McMurray and the hiring of a sales representative for the region are all cited as reasons for its success. "Overseas-based competitors cannot deliver as quickly due to longer shipping distances," the report said.

Driving Force, an Edmonton-based car rental company, has been serving oil sands workers since the 1980s, but the pace has picked up recently, said John Blimke, the company's chief operating officer. He attributes about 35 per cent of the company's growth in the past five years to the energy sector.

"We've expanded to new locations in Terrace, Whitehorse, Inuvik and Grande Prairie," Mr. Blimke said. "Our fleet has doubled in five years from almost 5,000 to 10,000 vehicles, mostly trucks, and our staff has doubled, too.

"The oil sands … rode us through the recession," Mr. Blimke said.

Economic punch

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How the economic impact of the oil sands is felt across business sectors in Canada:

19.2 per cent – Professional services

18.8 per cent – Oil field services

16.5 per cent – Manufacturing

13.9 per cent – Wholesale trade

6.1 per cent – Financial services

5.6 per cent – Transportation

20 per cent – Other

Source: Conference Board of Canada

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