Kitimat

Kitimat isn’t a town that grew organically. It was engineered. Dropped into the coastal mountains in the 1950s by the Aluminum Company of Canada (Alcan), it was a meticulously planned “Town of Tomorrow” built for one purpose: to house workers for the new smelter. With a population density of just 34 people per square kilometer, its isolation is a key feature. That single-industry identity, now shared between Rio Tinto and the massive LNG Canada project, still defines the community today. You don’t stumble into Kitimat; you move there for a high-paying industrial job.

The town’s economic DNA is aluminum and natural gas. Full stop. A median household income over $100,000 looks strong on paper, but it’s coupled with a 9.4% unemployment rate. That tells the real story: it’s a project-based economy, susceptible to the boom-and-bust cycles inherent in global commodity markets. When projects are humming, times are good. When they wind down or prices fall, the impact is felt immediately. The top two industries, manufacturing and construction, account for over a third of all jobs, so there’s no diverse local economy to cushion a downturn. The demographics reflect this reality. The median age is over 42, and two-thirds of the population are of working age. People aren’t moving here to retire; they’re here for a paycheque from one of the big employers.

From a lending perspective, this industrial concentration is the single most important factor. The housing market is almost entirely dependent on the health of its major employers. The housing stock reflects its origins, with single-detached homes making up nearly 65% of all dwellings, built for the families of the 1950s, not a transient workforce. There’s very little in the way of multi-family housing or modern apartments, which limits rental options and further narrows the potential buyer pool. And while the setting at the head of the Douglas Channel is dramatic, it’s not a market for retirees or lifestyle buyers chasing a particular vibe. The climate data confirms it’s not the kind of mild location that attracts buyers from down south. The buyer pool is, and will likely remain, people directly employed by local industry.

This is a core file for us, and we understand the market well. But our safety-first approach means we’re disciplined here. Our exit strategy has to account for a longer sale timeline and a limited buyer pool should a borrower default during a cyclical downturn. We’re looking at deals for owner-occupiers with stable employment in town, where there’s significant equity to protect against market volatility. This isn’t a market for speculative plays or high-leverage rental investments. For Kitimat, our maximum LTV is 60.0%.