Monday November 24, 2014


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College releases report on the Bakken and housing

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Southeast Regional College president and CEO Dion McGrath (File photo/photo submitted)

The Southeast Regional College (SRC) hopes to be involved with an affordable housing project in the community that will be able to address the college's student needs, and help businesses solve their labour shortage.

President and CEO Dion McGrath released The Bakken Formation Economic Impact Assessment Report, compiled by McNair Business Development, at the January meeting of the Estevan Chamber of Commerce. The study examines the economic impact of the Bakken oil formation, and the effect it has had on Estevan's rental housing supply.

McGrath also explained the impact that the housing shortage has had on its Estevan campus, and the possibility that the SRC could partner with businesses and others in the community to construct affordable housing units in Estevan.

“The answer is 'yes,' that if we can address some of these unfilled jobs that exist in the region today, primarily because there's a lack of housing … that we could produce more growth and have more people,” said McGrath.

McGrath spoke at the Saskatchewan Energy Training Institute – the building that opened in Estevan about two years ago and now serves as the college's Estevan campus. But thanks to the housing shortage, McGrath conceded that the building is underutilized. 

Citing the recent fall rental market report from the Canada Mortgage and Housing Corporation, McGrath noted that Estevan currently has a 1.8 per cent rental vacancy rate, which is slightly higher than the .6 per cent rate from a year earlier.

But there weren't any one-bedroom or two-bedroom apartments available for rent in Estevan, he said.

Estevan's status as a community with high rents and low vacancies for most of the past decade has been well documented, but McGrath showed how Estevan compares with other Prairie centres.

Estevan's rental rates for one-bedroom and two-bedroom apartments approached those seen in Calgary, and they exceeded those of Edmonton. The rate for a three-bedroom apartment was higher than in Calgary, and nearly equal to that of Edmonton.

People have been forced to pitch a tent outdoors, or move a trailer onto a parking lot, to have a place to live, McGrath said. Some of the college's students have had to commute a significant distance to attend classes.

The number of full-time students in the college's institutional credit courses exceeded 150 in the early 2000s, he said. But that number has eroded to around 60 today. The drop in students has coincided with the growth of the Bakken oil play.

“I found it interesting that our full-time student population is almost a mirror of our vacancy rate in Estevan,” said McGrath.

The total number of students taking courses at the college is much higher than 60, he said, thanks to part-time enrolments. But the number fluctuates based on the types of programs being offered, and the time of year.

McGrath said the housing shortage hasn't had the same impact on their part-time student base, since most part-time students already reside in the Estevan area.

"Full-time programming is very costly," said McGrath. "If we're not running those courses at maximum utilization of students, so that we have every seat filled, then we're operating them very ineffectively."

Solving the student housing crunch is critical to what the SRC needs to do to be successful, McGrath said. And if the college can solve its housing shortage, and boost its full-time enrolment numbers, he believes that employers will benefit because they will have a greater talent pool to draw from.

"If we can provide a place for learners, and some assurances for learners, that they can enroll in courses, and they can have a reasonably priced, relatively good quality accommodation to call home for their studies, the better off we will be at renewing and updating our programming," said McGrath.

And so the college wants to partner with the community and the private sector to come together and work towards affordable housing units in Estevan.

If the affordable housing shortage can be addressed, the college will be able to: develop and implement new programming options; provide affordable accommodations for learners; deliver trained learners for jobs that exist; and maximize and optimize the Saskatchewan Energy Training Institute.

Businesses will be able to fill their job vacancies; attract skilled labour from outside the region; tackle succession planning; and increase productivity and growth.

McGrath said there are more than 1,000 job openings in the Estevan area.

There is a lot of interest in a partnership between the college and the private sector for a housing project, too, he said, but at this time, nothing concrete has been finalized.

"This isn't a problem that is isolated to our college," said McGrath. "This a broader problem that's shared with many businesses and industry partners, and the community itself."

Since he joined the college, McGrath said he has been aware of the housing shortage in Estevan. The research in the McNair Business Development report, and from CMHC, has provided the evidence.

The college will now try to establish whether there is the need for affordable rental housing, and if there is an unmet student housing need for the types of programming that the college wants to purse.

McGrath said he doesn't want to approach the federal and provincial governments for funding for a project until the college can prove that there is significant community support for creating an affordable housing project with significant private sector backing.

If a 100-unit project to be constructed, the college would want 50 units for its student needs, and the other 50 would be for the private sector.

"I want it to be bigger, I want it to be broad," said McGrath. "I have this (housing) issue, but I think many of us have it as well."

The findings on the Bakken play, meanwhile, offer a glimpse on the impact that the oil formation has had on Saskatchewan's economy. In 2012, the Bakken accounted for $4.6 billion in gross domestic product, which is 6.5 per cent of Saskatchewan's overall amount, and the $770 million in revenues, which were seven per cent of the province's number.

It also created over 8,000 jobs, and $525 million in paycheques.

“Since 2008 … there is more than $4 billion in provincial revenues that have been generated out of the Bakken,” said McGrath. “It's astronomical.”

Activity in the Bakken really started to pick up in 2005 and 2006, and hit its climax in 2008.

McGrath said he didn't anticipate that the revenues from the Bakken would be so high, nor would they have such an impact on the economy.

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