OmniTRAX Responds to Latest Government of Canada Actions re: the Hudson Bay Railway

WINNIPEG, Oct. 13, 2017  – OmniTRAX Canada today provided the following response to recent actions taken by Transport Canada with respect to the ongoing negotiations regarding the repair and future ownership of the Hudson Bay Railway (HBR):

Merv Tweed, President of OmniTRAX Canada, said, “Culminating in the threat of legal action from Transport Canada today, it has become clear to us that the federal government has no intention of constructively solving this problem for Churchill. It appears from their collective indecisiveness, dysfunction and lack of leadership on this critical issue that both Canada and the Province of Manitobaare content to leave Churchill as a remote, fly-in community for the first time in over 100 years.”

“While this conflicts with Canada’s stated position on reconciliation with First Nations and with Arctic sovereignty – Churchill is Canada’s only deep-water Arctic port –  and its commitment to its more isolated northern communities, our experience since the 200-year flood event on May 25 does not suggest there is an appropriate sense of urgency by any governments to rebuild the railroad or transfer the ownership to the First Nations who seek to own it.”

“In mid-May of this year, seeing the snow pack and threatened storm, HBR contacted everyone along the railway and advised that we were concerned about a catastrophic flood that could compromise the railroad.  When the flood came, we immediately informed our regulator of the damage and requested that they come view this damage first hand.  Transport Canada declined to personally inspect the damage.  We hired a world leading engineering firm, AECOM, to begin the difficult work of assessing the damage and putting together a repair plan.  We informed our stakeholders, the government and the public that we would not be in a position financially to repair or continue to operate the line, and began the process of transitioning the HBR to a First Nations consortium.”

“The transfer of the HBR, as well as the repair, requires government resources.  The federal government said it would help and it has not helped.  In fact, it has stood in the way of both the transfer and the repair.  We are distraught over today’s statement, not because of our commercial interests – our commercial interests were washed away with the flood – but because of what it means to our employees, our stakeholders and our communities along the HBR.”

“This neglectful approach to Churchill has a long history: Since OmniTRAX purchased the HBR and the Port of Churchill in 1997, we have seen a steady and systematic removal of government funding to support those assets. At that time, in addition to supporting the transport of passengers, goods and supplies to Churchill and other northern communities, the HBR was used to transport grain from western producers out to global markets through the Port of Churchill. The value and commercial viability of the HBR have been undermined by a continuum of federal government actions over recent years, including the termination of the Canadian Wheat Board’s Single Desk in 2012, the abandonment of the Churchill Gateway Development Corporation (CGDC) in 2013, the subsequent privatization of the Wheat Board and the termination of grain shipping support programs.”

“The result of these measures has been the collapse of commercial activity along the line to the point of non-viability, as producers and shippers shifted the movement of grain westward. The Port has been closed to grain shipments since 2016. This is complicated by the fact that we have invested over $100M in this enterprise without any return since our purchase in 1997.”

“It is our view that, as a result of the federal government’s actions (or inactions) recently and over the past ten years, the HBR is not commercially viable and should be regarded as a public utility. We recognize this position has frustrated many, but it has become the inconvenient truth for Churchill.”

“We do, however, believe a solution is achievable, as do many of the local stakeholders. In early August, we entered into an agreement with Grand Chief Dumas and a new coalition of First Nations buyers. This coalition has the capability to operate the line and ensure it can offer a sustainable link to Churchill and points north. This agreement now hinges on the federal government and its willingness to provide the requisite approvals and financial support.”

“While we remain of the view that the best outcome for all concerned is a negotiated sale to the First Nations coalition, based on Transport Canada’s actions today, we are now contemplating steps to bring this protracted matter to a close,” concluded Mr. Tweed.

For further information: Media contact: Betsy Hilton, Edelman Canada, (416) 617-4079, Betsy.hilton@edelman.ca

NT5