Opportunity 2013: Servicing New Boomtowns

It's not just oilpatch-central Fort McMurray—several communities are experiencing sudden bursts in activity and population. And, boy, do they need entrepreneurs.

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When industry suddenly transforms a sleepy community into a hub of activity, support services inevitably lag. Boomtowns tend to be remote, with poor infrastructure and pricey housing, sure—but talk about opportunities to make a buck! While Fort McMurray, Alta.—Canada’s quintessential boomtown—has been bursting its seams for more than a decade, there’s still just one dry-cleaning business for its 80,000 residents. Here are three other emerging boom- towns, offering a tempting mix of growing needs and underserviced growth:

Labrador West, Nfld.: Encompassing Labrador City and nearby Wabush, this community near the Quebec border is rippling with iron mines. In Wabush alone, the expansion of one mine and the addition of another in 2015 will bring some 900 jobs to the town of 2,100 people.

With rents skyrocketing, that makes get- ting new housing the area’s prime directive. Labrador City mayor Karen Olford anticipates the need for 2,000 new homes in the town of 7,000 over the next two years. It currently takes a year just to get a deck built. All this means big opportunity for builders and related service companies, from plumbing and electrical contractors to building and hardware suppliers.

Other needs abound. “Businesses tell us they need IT support,” says Olford. “No one is supplying computers, networking and programming.”

Wabush mayor Ron Barron adds grocery outlets, hotels and motels, restaurants and other retail to the community’s wish list. Even with a new Canadian Tire that opened in November, there’s plenty of room for hardware and safety- supply outlets to serve the expanding workforce.

Wabush recently purchased 70 acres of land for commercial development, “and every acre is spoken for,” says town man- ager Ken Anthony. And the area sure could use a few car-repair shops, laments Anthony. His staff recently tried to change the tires on his town truck. The local dealer offered to do the job… in 20 days.

Prince Rupert, B.C.: The pending launch of liquid natural gas production and export is firing up lots of boom talk. In the mean- time, Prince Rupert’s growing port facilities are driving the economy. As nothern B.C.’s coastal transportation hub, the city of 13,000 is expanding its coal, potash, wood pallet and grain terminals. Four years ago, 80 longshoremen worked the docks; today, there are more than 350. The $90-million Ridley Island rail and utility corridor should be finished in 2014, attracting more investment. “We’ve had 13 businesses open in the past 20 months,” says mayor Jack Mussallem, listing a new Wal-Mart, coal and grain analysis lab, meat supplier and restaurant. He expects the town to maintain its rapid growth until at least 2020, and sees particular opportunity in retail, such as men’s and children’s clothing, sporting goods and auto dealerships. There’s also need for marine services, including a marina to welcome and repair boats as they cruise by, heading for Alaska.

One plus for newcomers: unlike in many boomtowns, homes are plentiful. “We went through 10 years of dormancy” that produced a housing glut, says Mussallem.

Rocanville and Esterhazy, Sask.: It’s potash driving the economies in the neighbouring towns of Rocanville and Esterhazy. Potash Corp. of Saskatchewan is nearing completion on a big mill and mine expansion near Rocanville. Just outside that hamlet of 900 is a 1,000-person work camp. The result: “Housing or rental properties would be awesome,” says deputy mayor Stan Langley, but there are few local builders. “If a person wanted to build an apartment block, I’m sure they would fill it within a month.” Langley also points out that the one local bar—which recently sold for twice the price it fetched just a couple of years ago—”is packed every night.”

Meanwhile, Judy Parker, economic development officer for Esterhazy, cites new StatsCan numbers showing a 4.4% increase in the family-age population and a 2.5%-plus jump in infants and toddlers, which means “anything to do with the needs of families with young children—child-care services, clothing and accessories, equipment”— could prove profitable. Esterhazy also suffers from a lack of franchises in fast food, coffee and quick-change oil services. An upscale restaurant would be nice, too, she notes.

Read more from PROFIT’s 2013 Opportunity Guide

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