SERIES 2/3: "BC Border towns -- living and thriving in Alberta shadow"

Traditionally depressed areas near Alberta are experiencing unprecedented growth.

ALBERTA EFFECT
A three-part series into how the powerful Alberta economy is affecting British Columbia.
1/3: Fuelling a resort-building boom on Vancouver Island.
2/3: Border towns -- living and thriving in Alberta's shadow.
3/3: Our Prairie cousins excel in a "maverick culture."

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Alberta casts a long shadow into B.C. Jobs lure young people away from border towns; lower sales tax lures cash-laden shoppers away from B.C. retailers.

Small towns like Dawson Creek and Fernie, literally a stone's throw from Alberta, have suffered mightily from that proximity. But times have changed and both towns are coming into full economic bloom.

Mayor Calvin Kruk bought his first house in Dawson Creek for about $40,000 about 15 years ago. Today, a new home in the service hub of the Peace River Country costs about $350,000.

The gas industry -- led by Alberta-based giants like Encana and Husky -- that used to draw workers out of town and into Alberta has come to play in the relatively untapped gas fields of B.C.

Gas is booming. Processing plants and piplines are being built. Royalties paid to government coffers by gas and oil companies have eclipsed the contribution of the forest industry. And in Dawson Creek you can see the difference.

The town is bristling with optimism, says Kruk. And why not? The unemployment rate dropped to 1.7 per cent in September -- the lowest in B.C.

"It's been an incredible increase in activity," he said.

Things were not always so rosy in the Peace.

As recently as 2005 the provincial government was seriously considering the creation of a lowered-sales-tax zone along the border to staunch the flow of retail dollars in to Alberta, which has no provincial sales tax at all. When money is tight the tax saved on a fridge or stove is worth a longer drive to the store. And that's exactly what people did.

Lower income taxes and oil-patch jobs had been luring workers across the provincial boundary for decades. Kids just grew up and left.

The situation was so bad that in 1998, the Peace River regional district took a vote on separating from B.C. and to become part of Alberta. In 1974, a Dawson Creek city councillor asked the government of Alberta for help to secede from B.C.

Today, the numbers tell a different story. The total value of construction permits in Dawson Creek just three years ago was less than $15 million. Permits issued in 2007 to September have already passed $51 million. The value of residential property has gone up 42 per cent in one year.

Jobs are so abundant that the local A&W hamburger stand is offering new employees $14 a hour.

The boom has left the city scrambling to deal with a zero vacancy rate for rental and low-income housing. A good housing mix is important to maintaining a sense of community, Kruk says. Challenges that come from an excess of prosperity are good problems to have.

Walk down the street in Dawson Creek and you can see the enthusiasm and optimism, said Kruk. "That's a change from the past."

"The hotels are full to capacity with oil and gas workers," said Karl Kopan, editor of Dawson Creek's Peace River Block News. At least two new hotels have opened this year with another due to open in the next few weeks.

During the winter drilling season the energy companies advance-book blocks of rooms for months at a time, Kopan explained.

"There are help wanted signs up everywhere," he said.

CALGARY CONNECTION

Life in the East Kootenay town of Fernie has always been more firmly yoked to Calgary than Vancouver. They set their watches to Mountain Time and are more often treated at Alberta's hospitals than health centres in distant Okanagan and Lower Mainland locations, both hundreds of kilometres and several high mountain passes away.

But they still pay their taxes to Victoria; some of them anyway.

"The biggest problem since I was a child growing up in Fernie is that people go to Lethbridge and Calgary for their big purchases to avoid paying the provincial sales tax," said former Fernie mayor Evelyn Cutts, now president of the local chamber of commerce. "For 50 years it has been an issue."

"People don't understand that they have an obligation to declare their purchases and pay the PST," she said, admitting that stopping people from saving money is not politically popular even when the law is on your side.

"It's just a part of the culture," she explained. "When you need to buy, you make the trip, go to a mall, eat in a restaurant, even if it ends up costing more."

Because many mine workers' shifts are four days on, four days off, they have lots of time for buying excursions.

Even holiday-makers from Alberta bring what they need with them to avoid having to buy things in B.C. stores. Hate for taxes runs deep with that lot.

But those same Albertans are bringing their wallets and for the first time in 100 years, Fernie is really hopping. Construction is everywhere.

In 1897, William Fernie brought 20 coal miners from Cape Breton to start the area's first mine at Coal Creek, east of today's town of Fernie, just ahead of the railroad.

Several coal mines have operated and closed or consolidated over the ensuing century around Fernie and Sparwood, shedding jobs in each incarnation. But the most shattering blow to the mining economy in the Kootenays came six years ago.

The Sullivan zinc and lead mine at Kimberley closed for good Dec. 21, 2001, after 92 years. Most families throughout the region owed some part of their livelihood to the mine.

"It was a really difficult time," said Cutts. "A lot of dads left, many for Alberta to find work, and left mom and the kids in the house back in Fernie."

"People were handing their homes over to the bank, which considering the price of real estate here now, is crazy," she said.

For 100 years leading up to the turn of the century, Fernie was a quaint if utilitarian town, serving the needs of miners' families.

"Depressed," is the word Cutts uses to describe those times.

But in the 1990s, with the end of the mining economy visible on the horizon, a transformation began with the sale of the ski hills in Fernie and Kimberley and an aggressive program of improvements to the skiing infrastructure. Nature already provides more snow than in any other place in North America.

The timing was fortunate, said Cutts, who runs Sheep Mountain outfitters and a campsite with her husband, Bob. The Invermere Valley, long a favoured destination for oil-rich Albertans seeking resort property, was filling up. Fernie emerged as a world-class ski resort, surrounded by virgin land.

Not so much today. A cursory look at the real estate listings, reveals dozens of condos starting from $400,000. Dozens of luxury homes are priced from $1 million to $3 or $4 million.

Hundreds more condos are under construction.

Fernie's retail strip has undergone a renaissance since the tourist trade picked up.

"It used be a mining town and the stores just had the necessities," said Cutts. "Nobody put much money into facades."

(prepared by Randy Shore/Vancouver Sun)