Churchill relieved by Ottawa takeover of port and railway
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Hey there, time traveller!
This article was published 30/05/2018 (2304 days ago), so information in it may no longer be current.
OTTAWA — Some Churchill residents were too excited to sleep Wednesday night after Ottawa announced an interim takeover deal for the town’s port and railway, alongside a pledge to restore rail service by the winter.
The agreement-in-principle lays the groundwork for Omnitrax to transfer its railway and port into local hands, with the help of a Saskatchewan grain company and a Toronto financial firm. The federal Liberals also committed “to re-establishing rail service before winter 2018.”
Ottawa said Thursday that a full deal is imminent, but it’s unknown how much Denver-based Omnitrax will hand over, and how much governments will pay.
At a Thursday meeting in the town complex, Churchill Mayor Mike Spence fielded questions from local citizens about the deal. A video recording of the meeting shows people cracking jokes, while some said they had trouble sleeping.
What Omnitrax owns in northern Manitoba
Hudson Bay Railway: 627 miles (1009 kilometres) of track that span The Pas to Churchill, as well as signage, some platforms and guesthouses for workers. An engineering report deemed 120 locations “defective” along with 25 washouts. The railway has been operational since 1929; in 1997, CN Rail (which was then a public corporation) divested the railway to Omnitrax.
Hudson Bay Railway: 627 miles (1009 kilometres) of track that span The Pas to Churchill, as well as signage, some platforms and guesthouses for workers. An engineering report deemed 120 locations “defective” along with 25 washouts. The railway has been operational since 1929; in 1997, CN Rail (which was then a public corporation) divested the railway to Omnitrax.
Port of Churchill: a nine-acre site that has four berths for shipping grain and supplies from July to October. The port has operated since 1931 and includes cranes and a massive grain elevator. Almost all operations ceased in 2016 due to the closure of the Wheat Board monopoly. The federal government sold it to Omnitrax in 1997.
Churchill Marine Tank Farm: a 50-million-litre capacity storage facility used to house gasoline, diesel, heating oil and jet fuel. Located on the site of the port, it comprises four large cylinders and five smaller tubs. Issues with storage last fall led to First Air offering part of its jet-fuel storage tanks.
Offices: The Hudson Bay Railway Company still has an office in The Pas. In Thompson, the company closed Omnitrax Canada Freight Services last July. Local people in both towns claimed they saw locomotives and equipment owned by the company moved down the line last fall.
Employees: It is unknown how many employees Omnitrax holds in Manitoba. After the May 2017 railway washout, the company offered jobs to employees at its other sites, though it’s believed few took up that offer. Staff had been based in Churchill, Gillam, Thompson and The Pas.
“It’s on to the next chapter,” said Spence, who co-chairs the consortium. “Everybody on the Bay Line wants it up and running so they can go back to their lives before this, and then there’s others who see an opportunity for prosperity here.”
Spence said his town was relieved after months of uncertainty, including the last-minute revelation of two other bids entering talks with Omnitrax.
He said some residents were curious about whether former Omnitrax employees will have a job under the new ownership, and how their seniority will fit into a new ownership model, which is bankrolled by Toronto-based Fairfax Financial Holdings, with the help of AGT Foods.
In a phone interview from Edmonton, Natural Resources Minister Jim Carr was audibly giddy.
“It feels very satisfying for a variety for reasons, most importantly because the port has been transferred to a progressive company who understands how to move product to market [and] knows how to run a railroad,” said the MP for Winnipeg South Centre.
Carr said a full deal to hand over the assets is coming soon. “I would say that that is in days, not weeks,” he said.
The news is “a huge step forward” for Ottawa’s nascent Arctic strategy, Carr said, “and a tribute of the patience and tenacity of the people in northern Manitoba who now have a continuing stake in their own future.”
Pallister eye’s deal’s economic potential
Premier Brian Pallister says it’s up to Ottawa to pay for the repair of the railway to Churchill, and costs associated with transferring the line and port — but he is willing to put up money for economic development.
Premier Brian Pallister says it’s up to Ottawa to pay for the repair of the railway to Churchill, and costs associated with transferring the line and port — but he is willing to put up money for economic development.
“We’ve got a lot of stuff we’ve initiated that we’d like the feds to partner with us on in terms of economic development,” Pallister said Thursday.
“We’ve got some real potential to improve and enhance some of the tourism aspects that we’re already investing in. We’ve got opportunities in terms of some programs that I shouldn’t say too much about yet…”
Natural Resources Minister Jim Carr said Pallister had spoken with the consortium working to get ownership of the assets from Omnitrax, as well as Carr himself.
“I know that the government of Manitoba is very happy about this development [and] prepared to work with us as we get through the details of implementing the [Arctic] strategy for northern Canada,” Carr said, adding that it would include economic-development opportunities.
But he wouldn’t say whether he expects that to include financial help for the repairs or transfer costs. “Each level of government has its own role to play, and I know the province of Manitoba wants to be part of this exciting story,” Carr said.
Pallister said rehabilitating the rail line is “their job,” referring to Ottawa. But Manitoba is interested in partnering with Ottawa on economic development.
“We’ve got some real excitement about a couple of projects that would improve sustainable services for people that would protect them in that community.”
Asked if grain should flow through Churchill once again to export markets, Pallister said: “We look forward to every opportunity to use the line for what it’s designed to do – to get goods to the port. Let’s get an international presence again and something that can get not only Manitoba but western Canadian goods to market.”
— Dylan Robertson and Larry Kusch
Neither Carr not Spence could speak to the specifics of the deal, and whether it includes all of Omnitrax’s holdings in Manitoba. Wednesday’s press release only mentions the port and railway, but the company also owns a tank farm, railway equipment and offices.
NDP MP Niki Ashton, who represents northern Manitoba, said this week’s announcement “was only the beginning,” and she hopes to see both the railway and port operating soon.
“We’ll believe it when we see it,” she said, adding that Ottawa needs “to pony up” enough money to support months of work by First Nations people along the railway.
Ashton says Omnitrax ought to hand over all of its assets, because of what she calls a lacklustre effort in making them profitable.
“I hope they move on entirely,” she said. “The railway and port were almost given to them, and we’ve seen a number of years where the proper upkeep and maintenance was not done. I’d be very wary of any attempt to over-price what’s in their hands.”
On Thursday, Fairfax announced it was adding $648 million to its ongoing investment in Seaspan Corp., a Hong Kong shipping company. AGT Foods, which has handled media requests on behalf of Fairfax, wouldn’t say whether that was related to the Churchill deal. “There would be no comment on that at this time,” wrote CEO Murad Al-Katib.
Omnitrax refused to comment Thursday.
dylan.robertson@freepress.mb.ca
