“Immediate” Repairs to begin as Hudson Bay Line Sold

 

train in Churchill

Trains with supplies will finally be coming back to Churchill. Rhonda Reid photo.

The new owners of the Hudson Bay Rail line are set to initiate immediate track repairs according to the Canadian government on Friday. The announcement came following a deal in place for purchase of port and railway by a consortium of buyers. The agreement will open up travel and shipping to the remote northern outpost of Churchill, Manitoba, isolated from the rest of the province since May 2017.

Churchill residents have dwindled in numbers from roughly 1,000 people  to 700 – 800 since the washout and subsequent nearly $60 million in damage to the rail line linking Churchill to the south. The trail closure has escalated costs for crucial supplies such as food and fuel, which currently is being shipped in on barges or through air transport.

Arctic Gateway Group Limited Partnership, a private-public partnership that includes Missinippi Rail Limited Partnership, Fairfax Financial Holdings and AGT Limited Partnership have purchased the Port and the Hudson Bay rail line from previous owner Omnitrax Inc from Denver, Colorado.

“We’ll have control in the future, and we’ll work toward prosperity,” said Churchill mayor Mike Spence. “This is historic, I don’t think there’s another model out there in Canada that would fit into this equation.

“This is what we hoped and wished for — we are finally there.”

Jim Carr International Trade Diversification Minister thanked area residents for their patience.

“I want Canadians living in northern Manitoba and Nunavut to know that the Government of Canada understands the importance of the line to their daily lives,” he said in a release on Friday.

The deal was delayed numerous times while Omnitrax claimed it wasn’t able to afford to fix the tracks. After hiring an assessment firm, Omnitrax estimated between $40 million and $60 million in repairs to restore light passenger-rail service and take about two months.

“We are racing against time,” said Fairfax Financial president Paul Rivett in a release. The goal for the new owners is to have the rail line operating prior to winter setting in.

“Phase 1 of the project will be to repair the rail line, undertake safety and rehabilitation upgrades to the port and the railway assets. We will commence the repairs and do all we can to restore service expeditiously and safely.”

Manitoba Premier Brian Pallister commended the deal and stated that plans are in place just in case the line cannot be fixed prior to the severe winter sets in.

“We are hopeful the repair of the rail line can occur as soon as possible so that service can be resumed before freeze-up,” he said.

“However, we want to reassure the people of Churchill and the surrounding northern communities that we have already made the financial commitments and logistical arrangements necessary to ensure propane resupply for the winter.”

Port of Churchill Sale Agreement in Place

port of Churchill

The Port of Churchill still vacant while the sale of the business is in limbo. Katie de Meulles photo.

There are no groundhogs in Churchill! So, there really cannot be a “groundhog” day. However, with the recent announcement of the Port of Churchill and the Hudson Bay Line being sold again there seems to be some confusion.

There apparently is another informal agreement that will reestablish ownership of the Hudson Bay Rail line and the Port of Churchill within the northern Manitoba community and keep the facilities under Canadian control.

One North and Missinippi Rail LP have joined forces with Fairfax Financial Holdings and come to an informal agreement to acquire the dormant assets from current owner Denver, Colorado-based Omnitrax.

Fairfax, a Toronto-based investment company, agreed to partner with One North and Missinippi Rail this past November, to purchase Omnitrax’s northern Manitoba assets.

The arrangement includes the participation of 41 First Nations and non-First Nation communities in northern Manitoba as well as seven Kivalliq communities in western Nunavut, along with Fairfax and AGT, the government said.

Omnitrax owner Pat Broe and Fairfax president Paul Rivett negotiated the acquisition, but there are multiple legal issues to finalize before prior to a finalized deal can be completed.

Churchill mayor and One North co-chair Mike Spence has been waiting a long time for this deal to materialize. Spence has been tirelessly lobbying for a deal since Omnitrax began reducing the frequency of rail service to Churchill nearly two years ago.
However, as we all have seen, this deal will not be official until papers have been signed and money exchanges hands. We have seen far too many deals or rumors of deals taken away with the tide of the Hudson Bay.

“Priority No. 1 will be rail line repairs in the very near future and to finalize the acquisition,” Spence wrote in a statement.

“This is a historic partnership involving Indigenous and northern communities with industry leaders that now positions the Port of Churchill as an Arctic gateway for future prosperity.”

The Hudson Bay rail line to Churchill was washed out by a flood runoff from two late spring blizzards in May 2017. Since then, Omnitrax has refused to repair the tracks and has been in an ongoing battle with the Canadian Government over responsibilities regarding the repairs. Initially, the costs of repairs were between $40 and $60 million. Omnitrax claimed it was unable to cover those high costs.

 

Canada Prime Minister Justin Trudeau stated last year that Omnitrax is responsible for getting the train line up and running again. While this is being settled, at this point most likely through new ownership, the federal government has been providing ongoing subsidies to northern residents to help defray escalating costs of goods shipped north.

First Nations Group Ends Churchill Port Bid

Via rail train engine at the port of Churchill.

Train engine being hoisted onto the cargo ship at the Churchill Port. Katie de Meulles photo.

The Port of Churchill is minus one prospective suitor for possible acquisition. The group, iChurchill and a First Nations consortium led by Glenn Hudson, Peguis First Nations Chief has withdrawn from bidding on the Port and the Hudson Bay Line.

“We are disappointed to have put so much time, effort and money into what would have been a timely solution for the people of Churchill and the economy of Western Canada, but we have apparently run up against politics,” said Louis Dufresne , CEO of iChurchill,

“We finally met last week with the government of Canada’s negotiator on the file, Mr. Wayne Wouters, and he made it clear that the government is willing to deal only with one specific company, a Toronto-based financial firm. We can’t understand why this is, given that our partnership meets all of the government’s stated criteria to support the restoration of rail service to Churchill.”

Churchill’s mayor Mike Spence and town council said iChurchill had previously announced that they were still negotiating with Omnitrax and the Canadian government to try and reach an agreement on the sale.

Now, iChurchill states that the federal government is catering to one exclusive buyer and will only offer financial assistance for track repairs to the Hudson Bay Railway for that group exclusively. Trains have not run to Churchill since last May and it appears that the hopes of starting the repairs this summer are fading again.

“Our team believes that these assets can be operated profitably,” said Dufresne. “My head cares about the commercial interests. But my heart is with the people of Churchill and the First Nations of Northern Manitoba. It’s been a year since a flood washed out their only land link to the rest of the country. I hope they can get their railway back online this year, but without a change in position on the part of the federal government, I’m not optimistic.”

We will have to wait and see what other potential buyers and investors arise in the near future.

Gypsy’s Bakery Destroyed in Fire

Gypsy's bakery burned Sunday

Churchill’s Gypsy Bakery burned to the ground in the early morning Sunday. Leroy Whitmore photo.

The iconic Churchill deli and restaurant that was the most popular gathering place in Churchill was destroyed in an early morning fire early this morning..

The building, described as a total loss by Churchill mayor Mike Spence, caught fire just after midnight. Fire crews were still putting out smoldering areas at 8 am this morning, according to Churchill Fire Chief Leroy Whitmore.

“There was heavy smoke and visible flames, coming through the rear of the roof,” said Whitmore.

Crews worked tirelessly from within the building to get a handle on the blaze but were driven back each attempt. Eventually Chief Whitmore made the decision to knock the structure down in order to protect adjacent staff housing and surrounding neighborhood homes.

 No information concerning the cause of the fire has been offered. With the total loss and destruction of the building there’s a good chance we will never know.

“Due to the extent of the damage and the fire suppression efforts, the cause of the blaze is pretty much impossible to determine, now,” said Whitmore.

Luckily the blaze happened at a time when no patrons or employees were inside. Eleven volunteers fought the fire through the night, said Whitmore. No injuries from the fire crew were sustained either.

“There was heavy smoke and visible flames, coming through the rear of the roof,” said Whitmore.

Crews tried about half a dozen times to put out the flames inside, but eventually were forced into a defensive position and the decision was made to knock the building down in order to protect staff housing nearby, he said.

“A dozen volunteers battled the relentless fire the during the night”, said Whitmore.

Gypsy’s Bakery has been the social center of Churchill for 25 years and the DaSilva family has been like family to all who knew them. it will be hard to replace the atmosphere they spent years creating. Social media has been filled with outpouring of grief and sadness from residents of the town all morning.

Churchill Gas Prices Subsidized

Churchill fuel prices

The deMeulles Auto Gas Bar in Churchill reflects the price of gas prior to the rail line washout. Dale deMeulles photo.

Churchill’s gas prices have been reduced by fifty cents a litre thanks to the federal government accessing the economic stimulus fund once again. With petrol prices nearing the $10/gallon mark, this latest reprieve will keep the cost at about $8/gallon. And we complain about gas prices when they reach $3/gallon or more? Kind of puts things in perspective a little, eh?

With federal findings of a probe of Omnitrax, owner of the Port of Churchill facility and the defunct Hudson Bay Line, due to be released soon, residents are enduring rising prices and increased isolation leading to economic strife.

Last week, Natural Resources Minister Jim Carr confirmed that the Ottawa government would allocate $132,870 for Exchange Petroleum to lower gasoline prices to prior levels before the Hudson Bay Rail Line was devastated by flooding last May. Shipping on the railway was the only way to keep costs for supplies and fuel low. Now, ten months later, the pressure is causing long-time residents to move south in search of a more affordable lifestyle.

In September 2016, Ottawa approved the Churchill and Region Economic Development Fund, intended for the diversification of northern Manitoba’s economy following Omnitrax laying off most of the port’s workforce that summer. Businesses have benefitted from the money by offsetting rising shipping costs of materials shipped by barge or airplane.

Last December Carr visited Churchill and announced the government would add $2.7 million to the existing $4.6 million relief fund. After seemingly turning a blind eye to the issue the federal government now is coming to the rescue.

The new windfall of cash will be transferred to Exchange Petroleum, owner of the Calm Air fuel-storage tanks located at the Churchill airport. These tanks are being used due to issues with the port’s storage tanks related to the viability of winter storage of the fuel.

Churchill Port tank farm.

Churchill Port tank farm is unable to store fuel for the town through the winter. Churchill Tank Farm photo.

“This project is a great example of how collaboration and partnerships can help lessen Churchill’s acute economic hardships, restore a quality of life, and keep its entrepreneurs in business,” Exchange CEO Gary Bell wrote in a statement.

Churchill Mayor Mike Spence expressed thanks to Ottawa for its leadership and funding while conveying optimistic thoughts that rail line repairs would commence in the spring.

“This announcement means real savings for residents and businesses of Churchill during these difficult economic times,” Spence wrote. “It’s important to also give a great deal of credit to Exchange Petroleum who stepped in last fall.”

 

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