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Whither the Port of Churchill?

Amid calls for a new owner or nationalization, some say no matter who owns the facility, 
companies won’t export grain through Canada’s only deepwater, arctic seaport

Time is running out for the Port of Churchill say its supporters, but according to others it can’t be saved.

They say its fate was sealed Aug. 1, 2012, when the Canadian Wheat Board’s (CWB) monopoly died.

“It is urgent,” Churchill-Keewatinook Aski MP Niki Ashton said Dec. 15 in an interview after calling for the federal government to nationalize the port currently owned by Denver-based OmniTrax, which closed the port in July, citing a lack of business.

“The 2017 shipping season is at risk and many people have said if we lose the 2017 season, the chances of the port reopening beyond that are slim to none.”

In 2016 Churchill’s terminal, which opened in 1931, didn’t export any grain — likely the first time since World War II, Eldon Boon, a Virden farmer and president of the Hudson Bay Route Association (HBRA), a pro-Churchill lobby group, said Dec. 14 in an interview.

In 2015 Churchill exported 184,000 tonnes, down considerably from the five-year average of around 500,000 tonnes.

While the HBRA hopes new owners can be found instead of nationalization, it might have to come to that, Boon said.

“We have put forward a resolution saying this still needs to be done by January 2017 or we are at risk of losing another shipping season,” he said. “And I think if we lose two shipping seasons we have a big problem as far as keeping the grain side of things.”

Ashton and Boon said Churchill is still a viable grain port and blamed OmniTrax for not working hard enough.

But Rossendale, Man., farmer and long-time Churchill supporter Fred Tait says Churchill is done as a grain port.

“It doesn’t matter the ownership of the port, grain is not going to go there,” he said in a Dec. 16 interview. “The multinationals have no incentive to put grain through a facility they don’t own.”

Tait and others predicted that in 2012.

“On someting like this I hate to be proven right,” he added.

The Wheat Board saved around $20 a tonne for farmers by using Churchill to serve certain markets, instead of going through the St. Lawrence Seaway. Not only is Churchill closer by rail for some farmers, and closer to some overseas markets, but the port eliminated the double handle of grain loaded first on lakers at Thunder Bay and then unloaded at terminals in the St. Lawrence to later be loaded onto ocean vessels.

Richardson International, one of Canada’s biggest grain companies, wants to use its own facilities to export grain, spokesperson Tracey Shelton said in an interview July 28.

“We want to use our facilities that we are investing money into and we are continuously upgrading,” she said. “And certainly Churchill does have some disadvantages.”

The list is long:

  • The port has short, three- month season, due to ice. However, with global warming the port could operate longer.
  • The terminal is old, but has had some upgrades.
  • The rail line to Churchill, built on shifting permafrost, is in poor shape.

The Keystone Agricultural Producers doesn’t have a position on nationalizing the port, said president Dan Mazier in an interview in early December. However, he added Churchill has been an important port for farmers in northwest Manitoba and northeast Saskatchewan.

Boon said smaller grain companies without export terminals are interested in Churchill, but they need assurances the port is going to operate.

Churchill is needed because western Canadian grain production is rising, while Vancouver, Canada’s biggest grain port, is getting more congested, he added.

“OmniTrax is holding Churchill to ransom,” Ashton said.

Tait agreed and said ultimately taxpayers who will pay.

“OmniTrax is in the driver’s seat,” he said.

According to Tait the North American Free Trade Agreement prevents Canada from nationalizing Churchill. That leaves two options, he said. One is to pay OmniTrax a huge amount of money to sell the port and railway, or pay OmniTrax a lot of money to run the railway.

While governments might allow the port to die, it’s unlikely they’ll allow the railway to close since it’s the only land link to Churchill, Tait said.

But Canada can’t turn its back on the port either, Ashton said. Not only does it serve communities north of Churchill, but It’s a symbol of Canadian sovereignty and of strategic value.

OmniTrax purchased the port in 1997 from the Canadian government for for a token $10, according to the Thompson Citizen, after buying the rail line from CN Rail for $50 million.

The company saw higher rail maintenance costs than expected, OmniTrax president Merv Tweed told the HBRA’s annual meeting March 23 in Yorkton, Sask.

“It’s not a money-losing proposition for our ownership or the new ownership,” he said. “The reality is there’s not enough return on investment to do the things that need to be done to improve it to a point where it can be even better.”

Tweed said back then a sale was imminent.

OmniTrax officials didn’t return calls for comment by press time.

Last December OmniTrax announced the sale of the port and railway, suggesting the railway should be run like a utility. Tweed said he expected a sale in early in 2016.

In April OmniTrax launched a lawsuit against then-Manitoba Premier Greg Selinger and then-Infrastructure Minister Steve Ashton, alleging they breached a non-disclosure agreement by giving information about OmniTrax to the Mathias Colomb Cree Nation.

In July Premier Brain Pallister said he refused to give OmniTrax another bailout, hinting that might have prompted the company to shut the port down.

OmniTrax is also suing the Manitoba government for $1.7 million, claiming Selinger guaranteed the province would cover the company 2015 losses.

Governments have invested almost $80 million to support the line and port. A year ago Tweed said the company had invested $100 million.

OmniTrax said its goal was to export one million tonnes of grain through its 140,000-tonne Churchill terminal. The most it ever did was 710,000 tonnes in 2002 — just short of the record of 735,000 set in 1977.

(With files from Manitoba Co-operator archives.)


About the author

Reporter

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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