The Port of Churchill has been a symbol of uncertainty in Churchill. Katie de Meulles photo.
A Manitoba First Nations group has formed a partnership with an independent company to establish the reopening of the rail line to Churchill and potential operation of the grain port in Churchill.
Heard that before? Well, this time we might be in for the real thing.
A recent press release confirms that a consortium of Manitoba First Nations, led by Peguis First Nation Chief Glenn Hudson, will partner with iChurchill Inc., a private Canadian company, entering into an acquisition agreement with Denver-based Omnitrax, to take over control of the Port of Churchill and the Hudson Bay Railway.
“The port has got all of the grain handling equipment and simply said, the first thing we want to do is resume that commercial activity,” said Louis Dufresne, president of iChurchill Inc., in a phone interview Friday.
Northern residents of the town of Churchill along with Indigenous leaders say the railway and port are crucial to the existence of towns and all First Nations in northern Manitoba.
Last May, a year ago, the Hudson Bay rail line owned by Denver-based Omnitrax sustained flood damage from the spring melt of two late-season blizzards. The damage was estimated at nearly $60 million and Omnitrax balked at its contract to repair the damage and therefore reopen the train line to Churchill. Soon after, a native group under the name Missinippi Rail LP, a consortium of about 15 Manitoba First Nations, signed an informal agreement to purchase the port and rail line for $20 million. Further strengthening their offer and position, the group enhanced their buying power by joining with One North, a group representing First Nations and communities served by the Hudson Bay line.
Photo by Major MacLachlan (www.zambonista.com/hbr/) [Public domain], via Wikimedia Commons
With that deal seemingly dormant and not gaining any momentum, this new one is being praised by Manitoba Premier Brian Pallister.
“Hopeful always when I hear these announcements, but of course like the people of Churchill, I just really would like to see the rail line rebuilt and the port reopened with solid commitments with whoever is going to take charge of the ownership that they are committed for the longer term.”
Now, iChurchill Inc. is hoping to formalize and seal the agreement by mid-June in order to commence repairs and reopen the line in time for the fall polar bear season. These details have not been confirmed by Omnitrax as of yet,
Communities have been suffering for a year now with increased costs of transporting goods to the outlying towns in the north. The isolation has touched everyone’s lives in every community. With another end of this dilemma in sight, people have been given hope once again.
iChurchill Inc. is expected to release more information today regarding plans for repairing the rail line and potential reopening of the port at a Winnipeg press conference.
Any new agreement would need approval from the federal government. Federal Natural Resources Minister Jim Carr is expected to release a statement Friday.
In a surprising merger of two competing groups from the north, they have now joined forces to purchase the Port of Churchill and the Hudson Bay rail line. This development could be a last-ditch effort to pressure the federal government to initiate track repairs before the long, cold winter sets in.
Grand Chief Arlen Dumas, an acting representative of Missinippi Rail LP, has declared that his former group, Mathias Colomb First Nation, will no longer seek ownership of the Port facilities and rail operations. He has shifted his focus to working with other parties in a bid to acquire the port and its assets currently owned by U. S. company Omnitrax.
Sun is setting on the chance to repair the Hudson Bay Rail Line. Don Wilson photo.
Dumas offered $20 million to Omnitrax as chief last June. Omnitrax accepted and the two parties signed an agreement to transfer the port, rail and marine tank farm. The Assembly of Manitoba elected him grand chief of Chiefs in July and the prior agreement dissolved.
Another set of suitors also signed the letter to the PMO. Chief Christian Sinclair of the Opaskwayak Cree Nation and Churchill mayor Mike Spence head up the coalition called One North.
“It’s got to be a mutually combined business model that will work for everybody’s interests,” Sinclair said, adding his understanding is Ottawa is ready to go with some form of a plan, but details have to be worked out.
Chief Christian Sinclair heads a group that will purchase the Port of Churchill. CBC photo.
Concerning the port and rail purchase, Chief Christian Sinclair stated recently “if we can send a man to the moon, I’m sure we can fix a rail line.”
Federal Natural Resource Minister Jim Carr released a statement on Friday saying Ottawa has made Omnitrax aware that the company is responsible for repair costs.
The government issued a release of its own that stated they have “formally demanded” the Hudson Bay Railway Company repair the Hudson Bay Rail Line per a 2008 agreement with the federal government. According to the government the agreement “requires the company to operate, maintain and repair the entire Hudson Bay Railway Line in a timely manner with diligence until March 31, 2029.”
Omnitrax staff have defended themselves by calling the rail line “a public utility,” and state they are unable to pay for the repairs.
Since late May, when floods damaged multiple sections of the rail line, Churchill residents have been without rail service from the south. Estimates between $20 and $60 million have left groups fighting to find who is responsible for the bill. Meanwhile, food prices have skyrocketed leaving locals frustrated regarding the future of the town.
Churchill Mayor Mike Spence says Omnitrax and Ottawa have to work out a deal. Sean Kavanagh CBC photo.
At this point the “repair train has left the station” so to speak. Sinclair had previously said time is critical and he could be in Winnipeg “within hours” to sign what is necessary to move ahead. However, as we near the end of September, it would take a mammoth effort to complete repairs before the winter is upon us.
One of the Hudson Bay Line’s washouts between Gillam and Churchill. Omnitrax photo.
Omnitrax does not have the resources to repair the Hudson Bay Railway and is urging the Canadian Government to get involved to help get the trains running again according to Merv Tweed, President of the company’s Canada management team.
“We’ve said publicly that we believe the province and the federal government have to be involved in this. It is a natural disaster,” Omnitrax Canada president Mervin Tweed said Friday.
Omnitrax is claiming there are at least 24 track sections between Gillam and Churchill, Manitoba that were severely damaged during the spring thaw and floods. Given the complexity of accessing the tracks and the permafrost base they lay on, the company is forecasting spring 2018 as the earliest time the repairs will be completed.
Flooding has caused some of the Hudson Bay Rail line to be underwater. Omnitrax photo.
Omnitrax has conducted aerial photo surveillance revealing long stretches of water submerged tracks, culverts displaced and suspended tracks above the ground with water running under them. This type of damage will be difficult to repair with expediency and forethought for future flood damage.
The Canadian government has not committed to any help before knowing what the costs will be.
“I mean, they’re being cautious. It’s hard to do something until you know — like us — what it’s going to cost,” said Tweed.
Omnitrax-Canada President Merv Tweed says government needs to be involved in repairing the rail line. CBC photo.
The Hudson Bay Railway is a lifeline between Churchill and the south. Trains typically bring up everything from fresh groceries to propane gas for heating homes. as well as building materials and anything else needed by residents and businesses. Without this service the economy and lifestyle in Churchill will be drastically affected.
The assessment, including 300 kilometers of tracks, 28 bridges and 600 culverts is beginning this week will take four weeks to analyze the tracks and two more to provide a comprehensive report detailing the process of repairing the line.
Tweed estimates the cost will be far larger than what Omnitrax can afford for the project.
“We don’t believe we have the resources to rebuild what needs to be done,” said Tweed. “Every time we go out we find something else.”
A difficult job ahead for engineers includes walking along the tracks and checking the stability of the line as well as taking soil samples in order to determine ground conditions under the tracks.
“Just getting to that site is going to be a real challenge,” Tweed said.
The tundra north of Gillam is saturated and many areas are covered with water slow to be absorbed by the permafrost – covered ground.
In the meantime, while the track is unusable north of Gillam, a plan to utilize both the Port of Churchill and the town’s airport is being assessed and put in place to cover the shipping deficiency.
Tweed stated that some port, owned by Omnitrax, employees have returned to work in preparation for aiding with additional shipments.
“We were optimistic about a pretty good rail season until the water hit,” Tweed said.
Owner and operator Omnitrax has shut down the Hudson Bay Rail line for the forseeable future due to flooding causing destruction of the tracks. Estimates for reopening are now being projected as far out as next spring.
The “unprecedented and catastrophic” damage will take months to repair, said Peter Touesnard, chief commercial officer at OmniTrax, the Denver-based owner of the rail line that brings supplies into Churchill. “Until we are able to get people physically on the ground and do a proper inspection, it’s difficult for us to truly know [how long repairs will take],” Touesnard.stated.
The closure is also straining the local economy and workforce preparing for the summer beluga whale season. Businesses are being forced to consolidate their work staff as the number of tourists traveling to Churchill this summer will be drastically reduced. News of at least five layoffs so far has spread and more are expected soon with the official announcement of the rail line suspension.
Tundra Inn owner Belinda Fitzpatrick in front of her restaurant. Hannah Manczuk photo.
Belinda Fitzpatrick, owner of the Tundra Inn had to deliver the bad news to five workers last Saturday. “Quite heartbreaking,” said Fitzpatrick. “It was really upsetting.”
Plans for a seasonal restaurant at the Tundra Inn slated to open next week had to be put on the back burner. Other businesses are facing the same challenges as the the closure becomes a reality.
Fitzpatrick has been calling guests and seeing if they are able to fly to Churchill instead. However, cancellations have been coming in and she estimates she will lose a majority of travelers planning to stay at the inn and hostel.
OmniTrax is reporting unprecedented and catastrophic damage to the rail line caused by heavy flooding resulting from heavy snow pack left over from two massive March blizzards. The company says the track gravel bed has been washed out in 19 locations along the line. At least five bridges have visible damage and assessments of 600 culverts and around 30 more bridges will need to be examined for structural integrity.
Flooding in the Churchill area and south along the rail line have forced its closure. Ricci O’connor photo.
“While the Hudson Bay Railway requires significant seasonal maintenance, the extent of the damage created by flooding this year is by far the worst we have ever seen,” Touesnard said.
Fuel for the town is an especially critical commodity, and while the port could be used, at least during the ice-free season, winter will pose another extreme hurdle and potential emergency for all of Churchill.
Home Hardware in Churchill under stress from the rail line closure. Facebook photo.
Dale de Meulles and his wife Rhoda have run Churchill’s hardware and lumber store for the past 14 years and with the train out they will be unable to stock lumber and other building and home supplies sufficiently. Although competition in town is not there, they will have a tough time meeting expenses and payroll for 10 staff people without money coming in.
“We don’t know how we’re going to survive, to be honest,” said Rhoda de Meulles.
Dale de Meulles gives two months as a deadline for the layoffs. Last year’s Port of Churchill layoffs have already put pressure on the workforce in the town and the rail closure will continue that strife. Seasonal workers will also be hit hard without the tourism dollars coming in.
“We’re trying our best to keep them,” he said. “They gotta feed their families just like everybody else.”
“We’re just trying to survive.”
“As a Churchillian, we will never give up,” de Meulles said. “We’ve had so many hurdles in front of us and we keep jumping over them, but we need help this time.”
The Port of Churchill and Hudson Bay Railway are still up for sale by Omnitrax. Claude Daudet photo.
With negotiations between Omnitrax Canada and the Missinippi Rail Consortium, now down to just the Mathias First Nation, moving at the speed of a train on the last 100 miles to Churchill, another strong alliance has stepped up and expressed interest in acquiring the port and Hudson Bay Railway. Omnitrax does have a memorandum of understanding to negotiate the sale of its assets with MRC though the negotiations have recently stalled.
The new alliance called One North has apparently gathered widespread representation from various First Nations of northern Manitoba and incorporated municipalities residing up and down the rail line. The Kivaliq region in Nunavut has also reportedly joined forces with the group as well.
“This is an unprecedented coalition of communities — indigenous and non-indigenous. There is a historical significance here. Never in the history of northern Manitoba have all these communities come together like this in a shared vision.” stated Christian Sinclair, chief of Opaskwayak Cree Nation, and one of the key organizers of One North.
So far around 20 communities have joined forces with One North, including The Pas and the City of Thompson, two key, large communities on the rail line as well as all the First Nation communities served by the Hudson Bay Railway including Fox Lake, War Lake and York Factory. Many of these groups have rescinded their support letters from a year ago backing the Missinippi Rail Consortium run by Chief Arlen Dumas of Mathias Colomb First Nation and redirected them to One North Coalition.
The group has come together to not only purchase the assets of Omnitrax Canada and run the rail line and Port of Churchill but also facilitate a long term broader plan for the north and its people.
Churchill mayor Mike Spence has co-led the effort with Sinclair..
“We have a real issue here. We need to rectify it. We are putting together a model that will sustain these communities for a long, long time.” Spence said.
Omnitrax Canada place the port, rail line and assets up for sale in December 2015. Omnitrax president Merv Tweed at that time announced the company wanted to sell its Manitoba assets and was confident the company would have a deal in place before the end of 2015. That didn’t happen.
Dumas and Omnitrax entered into negotiations in January 2016 and although initial meetings seemed to imply a done deal, nothing has seemed to progress further.
When July came around, Omnitrax shocked the community of Churchill by laying off nearly 100 port workers and abruptly closed the doors to the port and cancelled the entire shipping season. No deal with with Dumas and his group was finalized.
Dumas and Omnitrax officials claim that talks are progressing well and that a deal is imminent though no recent news has surfaced on the deal. Omnitrax officials have not been available for comment on negotiations. When reached, Dumas had no awareness of One North’s interests. He did give away a little of his hand by stating; “Well, ask them to give me a call if they want to buy the assets and the interest off us.”
Sinclair admits One North is still trying to get an audience with Omnitrax. They currently have no official standing with the company and have only assembled a team with some technical expertise including Paul Power, an international railway specialist who was a founding director of the Keewatin Railway Company, and Marv Tiller, the original CEO of the North West Company who has had a long career assisting First Nations in successful economic development projects.
“We think Omnitrax does not want to talk to us because they want to get a management contract from the buyer, Missinippi Rail Consortium, so they can make $10 to $15 million advising and managing and have someone else take on the risk as well as cash out on all the government money that has been sunk into the line.” stated Power.
One North has made it clear to the government the direction they are wanting to go in and have met with Cliff Cullen, Manitoba’s minister of growth, enterprise and trade as well as Natural Resources Minister Jim Carr and the Manitoba caucus in Ottawa. Modest funding has been received from the $4.6-million Churchill and Region Economic Development Fund, established in September by the federal government though the group has been primarily self-funded to date.
“The federal government is fully aware of where we want to go,” Mayor Spence said. “They have indicated to us that they like the model, they like where we are going. It plays into what the government wants to do to develop a new strategic plan.”