The Port of Churchill is getting millions of federal dollars to help it adjust to an open market starting Aug. 1, 2012.
Eighty-five per cent of the total traffic, and almost all of the grain exported through Prairie Canada s only seaport, comes from the Canadian Wheat Board. Last year it exported 659,000 tonnes of grain through Churchill the biggest program since the 1970s. But when the board loses its monopoly those exports are expected to dry up.
The government also acknowledges that changes to the Canadian Wheat Board, while giving western Canadian farmers marketing freedom, will also lead to a period of adjustment to Churchill and the surrounding region, Agriculture Minister Gerry Ritz told reporters Oct. 18.
Ottawa will spend up to $5 million a year for up to five years to subsidize grain exports through Churchill, Ritz said.
The biggest change is the subsidy that was in place was only on board grains, Ritz said in an interview. This particular subsidy… includes other commodities as well the special crops and canolas.
But the board does not subsidize Churchill grain shipments, said spokeswoman Maureen Fitzhenry. The board uses Churchill because it saves farmers money in lower transportation costs compared to exporting via the Great Lakes-St. Lawrence Seaway system. The net gains are enough to cover paying farmers to store grain to be shipped through Churchill, she said.
The Western Canadian Wheat Growers Association opposes assistance for Churchill.
While we can support infrastructure spending at the ports and along the seaway, we do not support operating subsidies that distort the marketplace, association chair Gerrid Gust said in a release.
The board says grain companies don t use Churchill because they want to maximize use of their own terminals at other ports.
The federal government says it will provide up to $4.1 million over three years to maintain the port over the transition period, work with the Churchill Gateway Development Corporation on port infrastructure improvements and extend the project completion date an additional two years to 2015 and explore options for Churchill s future.