With little time to waste a new player has surfaced in the crucial sale of the Port of Churchill to two independent First Nations groups in the north. Investment firm Fairfax Financial Holdings from Toronto hopes to partner with One North and Missinippi Rail LP to wrest ownership from Denver, Colorado-based Omnitrax and set forth in motion the extensive repairs to the Hudson Bay Line damaged by severe flooding last May.
The Port of Churchill may be under new ownership soon. CBC News photo.
The new prospective partner will also bring a financially sound backing and a strong business base to the deal that Churchill officials and residents hope will secure access to the south and free them from isolation.
According to reliable sources, a negotiator for the federal government, former clerk of the Privy Council Wayne Wouters, has brokered a deal with the two potential owners.
“This development has the potential to contribute to an arrangement supported by First Nations and communities in northern Manitoba,” Natural Resources Minister Jim Carr said in a statement released Thursday.
“This would enable a sustainable business approach that results in a safe and reliable rail line.”
Paul Rivett, president of Fairfax Financial Holdings, said “we are optimistic about the prospects of northern gateways.” stated in a press release.
“The Churchill rail corridor and the Port of Churchill are important pieces of infrastructure for northern communities and to the economy of Canada. Partnering with First Nations and communities is the right model for this investment,” Rivett said.
He said Fairfax will rely on a company it has invested in, AGT Foods, to develop a plan that is “viable and profitable in the long term as a business.”
Earlier this week, Ottawa responded with an $18-million lawsuit against Omnitrax after it filed filed a claim for damages against the federal government under the rules of the North American Free Trade Agreement.
The head of the Fairfax, V. Prem Watsa, has been characterized as the “Warren Buffet of Canada” often investing in troubled companies and turning them into a positive entity. Watsa invested in BlackBerry and Fairfax has significant holdings in several other companies.
Fairfax Financial CEO and chair V. Prem Watsa.CBC News photo.
Omnitrax signed a memorandum of understanding with First Nations Consortium Missinippi Rail in June and then joined forces with One North to strengthen interests in purchasing Omnitrax’s Manitoba assets.
Churchill Mayor Mike Spence, in a written statement to CBC News, said transferring the port and rail line to a stable, strong northern regional ownership group is the highest priority. He is behind the efforts to find a partner to purchase the assets one hundred per cent.
“I am pleased that there are outstanding companies that also share this vision. We now need the negotiations expedited and [to] ensure our preparations for repairs to the rail line and port are ready for the 2018 season,” wrote Spence.
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.
The Hudson Bay Line has been in the news since nearly 20 sections of track were washed away or damaged by melting floodwater from two late spring blizzards. Churchill waits for news from the government on plans to reach agreements with first nations groups and owner Omnitrax on the sale of the railroad and subsequent repairs. Time is running out for getting anything done before the winter freeze sets in.
This video provides 13 facts about the development and construction of the now very infamous Hudson Bay Line to Churchill! Kind of cool to dig up this vintage video. Enjoy!
The Hudson Bay Line is still in limbo with the Port of Churchill still up for sale by Omnitrax. This video was earlier in the discovery process of just what the next steps should be to repair and reinstate train service to Churchill. Churchill residents and town officials are getting fed up with the same old rhetoric they are being fed from Omnitrax and the Canadian Government! We’re hoping for a speedy resolution to the crisis.
Omnitrax, owner of the Port of Churchill and the damaged Hudson Bay Rail – Line, has apparently obtained an assessment of the severely damaged railroad tracks between Gillam and Churchill. After meeting with Transport Canada officials this past Monday, Omnitrax seems to have a clearer notion of what it will take to repair the tracks.
The company has not yet released the findings and any strategic, updated plan to commence work in the near future. After 13 weeks of inoperability, the Hudson Bay line still sits damaged by spring floods resulting from two historic March blizzards. An August 4th updated engineering report detailing estimated costs for repairs was obtained by Omnitrax though they vowed to divulge the findings only after meeting with Transport Canada.
In early July, repair estimates by Omnitrax ranged between $20 and $60 million which they emphatically stated were “not economically viable”. However, the Canadian government continually insists that the company is responsible via federal transportation laws to keep the lifeline to the north running. Transport Canada, the enforcing agency for the law will not initiate an investigation until it received specific complaints from citizens and other agencies.
Correspondence so far from complainants has not been addressed directly to movement of goods and rail line abandonment prompting responses from some Churchill residents that Ottawa and Omnitrax are dragging their feet in the process. Telling Churchillians they have basically not “complained properly” is not sitting right with many of the distraught residents.
Damaged Hudson Bay rail line. CBC photo.
Churchill Mayor Mike Spence, mayor of Churchill, instead of encouraging residents to file complaints with the regulator has instilled trust in Prime Minister Justin Trudeau. Trudeau pledged he would find a solution on July 28. Trudeau, however, hasn’t said how he plans to proceed.
Home Hardware owner Rhoda deMeulles exemplifies the business owners woes in town by expressing her frustration on lack of supplies due to no cargo arriving via rail. “It’s hard to realize what you need all at once,” said deMeulles, whose store is close to running out of construction supplies and cash.
“We feel like we’re in jail,” said deMeulles, who still loves the town she adopted 38 years ago. “We need help; we need our rail line back.”
Something has to give as the government continues to subsidize groceries for the town. Everyone is expecting a decision by Omnitrax soon, possibly as early as next week.