Churchill layoffs in effect, uncertainties remain

(CNS Canada file photo by Jade Markus)

CNS Canada — Layoffs from Manitoba’s Port of Churchill are now in effect, but questions remain for those formerly employed by the port, the future of the town and the dynamics of Canadian grain handling.

Answers to those questions aren’t coming from OmniTrax, the Denver-based railway that operates the port, as company officials have remained mostly silent since issuing layoff notices July 25.

“It’s unfortunate that this is happening up there for sure, but we want them (residents of Churchill) to know there are a lot of people working hard to try and find a solution for them,” said Elden Boon, president of the Hudson Bay Route Association (HBRA) at Virden, Man.

Churchill, on the shore of Hudson Bay in northern Manitoba, is home to about 800 people. The port was North America’s only deep water Arctic seaport, and was the largest employer in the town, hiring about 10 per cent of the population during seasonal operations, the Union of Canadian Transportation Employees said.

“It’s about these communities in the North having a great economy, and their communities. It’s about people having jobs and a brighter future,” Boon said.

The federal government has listened to the HBRA’s concerns about the port’s closure, he said, but added there is no concrete solution in the works at the moment.

The port had been receiving federal funding through the Churchill Port Utilization Program. That program was set to run until the end of the 2016 shipping season.

The closure comes at an especially inopportune time, as harvest nears and old-crop grain sits loaded and destined for the port, said Dan Mazier, president of Manitoba farm group Keystone Agricultural Producers.

“Those contracts were established, they were signed, sealed, and just not delivered on. We closed the port, so what does this do to our reputation as far as exporting?”

Farmers have been directly impacted by the closure of the port, and long-term it will have an effect on the value chain, he said.

The port had been touted for eliminating time-consuming navigation for the Prairie farmer, reducing handling costs of the St. Lawrence Seaway, and avoiding congestion at other Canadian ports.

The port moves a relatively small amount of grain, but has supported movement during backups. The Port of Churchill had a long-term average of moving about 500,000 tonnes of grain per season.

However, the port only moved about 184,000 tonnes of grain in 2015.

“No matter what kind of jam there was, it was an outlet. If anything it’s going to add more pressure to the Eastern and Western ports,” Mazier said.

Farmers are expected to start harvesting near the end of August and into September. The Western Grain Elevators Association says grain harvest could reach 74 million tonnes this year, which is near 2014’s record-level 76.8 million tonnes.

“We obviously will have a pretty good crop coming off very soon, and here we are closing off our export port now. I don’t think that bodes well for the grain industry,” Boon said.

OmniTrax officials did not respond to a request for comment.

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow her at @jade_markus on Twitter.

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