The clock is ticking on Churchill

In the up-and-down history of the Port of Churchill, we appear to be experiencing an upswing.

Grain and barley are flowing to the port on the Hudson Bay Railway. With the end of the Canadian Wheat Board's monopoly, there is some surprising optimism that an unregulated market may somehow inexplicably make Churchill self-sustaining. Inexplicably because many had predicted the end of the CWB was the end of Churchill.

Last month, Richardson International, as iconic a Manitoba company as there ever was, announced it was pushing grain through the port this season. "Recent changes to Western Canadian grain marketing have opened up new opportunities... and made the Port of Churchill more accessible to us," said Terry James, Richardson's vice-president of export marketing.

Nobody was quite sure how an unregulated grain market would shake down. Producers are now free to sell their grain and barley to whomever they want and there is always a chance, with good marketing, Churchill could muscle in on that business.

However, the majority of the grain-handling and transportation infrastructure does not favour Churchill. Grain and barley move east and west to market, starving Churchill of the tonnage needed to pay its own way. Richardson certainly suggested there could be a new way of looking at Churchill.

Unfortunately, the current grain and barley moving through the port is primarily pushed by a generous $9-per-tonne federal subsidy. The province whined loud and long about the federal Conservative government's decision to terminate the CWB's monopoly because of its philosophical support for the single-desk approach to grain marketing. But also because the CWB is headquartered in Winnipeg. Adding to the concern was the fact the CWB alone accounted each year for more than 80 per cent of all shipments through the port. The feds were indignant about Premier Greg Selinger's "save-the-CWB" campaign, but they eventually came to the table with a five-year, $25-million subsidy program.

Sources in the grain industry say the subsidy is popular enough that it will keep the port alive for the next half decade. Beyond that, however, it's unclear the same volumes will flow without that subsidy, should the will to renew it evaporate in 2017.

The loss of Churchill is really too much for Manitoba to contemplate. The port supports the community of Churchill, of course, but it is also essential for the continued operation of the Hudson Bay Railway. The railway is a vital transportation and re-supply link for communities across the northern regions of the province. The combination of the two has made Churchill a priority for successive provincial governments and most of the federal regional ministers from Manitoba.

Lord knows the federal and provincial governments have tried to sustain Churchill. In the mid 1990s, the two levels of government conspired to help Denver-based Omnitrax take over the railway as a private entity from Canadian National, which along with Via Rail had all but decided to abandon the route. Money was provided to dredge the port and improve grain-handling facilities. Omnitrax was provided with assistance to improve track maintenance. The wheat board promised to continue shipping through the port.

It was an expensive initiative in more ways than one. At the time, Manitoba was facing losses on two major federal-provincial files: Churchill and the Atomic Energy of Canada research facility at Pinawa. Both represented millions of dollars of investment. While the port and railway were of keen strategic importance, the loss of AECL's Whiteshell research laboratory represented not only economic loss, but also the loss of high-paying, high-technology, knowledge-based jobs and expertise.

Ottawa and the province tried to save both, but in the final analysis, both levels of government galvanized their support around Churchill.

Pinawa was slowly starved of support and ultimately sent technology and grey matter off to ply their professions in other cities and countries.

This background makes it important that any discussion about the future of Churchill be conducted with sober analysis. Manitoba has used a lot of its political capital with Ottawa over the years to save the railway and port. Within Manitoba, Churchill is a critically important piece of the strategic transportation infrastructure. And despite the fact Churchill has always had a certain geographic logic behind its drive to be a player in the grain industry, the titans of that industry have invested in a system that simply does not need a deep-sea northern port.

Once again, the clock is ticking on Churchill. In five years, we'll know if there is a business case to be made, or whether Churchill is destined once again to be the welfare case of Manitoba's transportation system.

dan.lett@freepress.mb.ca

Republished from the Winnipeg Free Press print edition October 1, 2012 A4