Pallister won’t respond to Omnitrax until Ottawa makes a decision on port

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This article was published 19/07/2017 (3014 days ago), so information in it may no longer be current.

OTTAWA — Manitoba Premier Brian Pallister says he’s waiting for Ottawa to decide on the future of the Port of Churchill, before choosing whether to pay for repairs to the rail line that has cut off the northern community for eight weeks.

Both the rail line and port are owned by Omnitrax, a Denver-based company that refused Tuesday to pay $20 million to $60 million to repair the rail line.

Speaking with reporters Wednesday in Edmonton, Manitoba Premier Brian Pallister said he wouldn’t respond to Omnitrax, which has received millions in federal and provincial funds.

“Omnitrax’s enthusiasm for running the rail line, to put it mildly, has worn thin,” said Pallister. “That being said we’re acting in good faith to work with them, to make sure that we give them every opportunity to fulfill the requirements of the contracts they’ve signed.”

Rail service was shut down on May 24, cutting off ground transportation in and out of Churchill, a town of 900 people now relying on costly air shipments of food and other supplies.

Omnitrax has said the severely damaged track on the Hudson Bay Railway is not economically viable, raising suspicions the company is seeking a bailout. The company also closed the Port of Churchill last August after grain exporters grew wary of the rail line’s multiple issues.

Pallister said Wednesday he won’t commit to anything regarding the rail line, until the federal government decides on the future of the town’s port. “To have a discussion around one without talking about the other is not going to be productive,” he said.

The premier said he’d written twice to Prime Minister Justin Trudeau seeking clarity on how Ottawa plans to proceed.

A spokeswoman for federal Transport Minister Marc Garneau said Wednesday that Omnitrax is still under legal obligations to operate the rail line and Port of Churchill, because it accepted federal funds.

A July 2008 agreement saw Ottawa give $20 million to refurbish the rail line, and another $4.1 million in 2012 for the Port of Churchill, which Omnitrax closed last August.

“Under the 2008 agreement, Omnitrax cannot significantly reduce, discontinue, abandon the [rail] line,” wrote Delphine Denis. “The company is bound by the terms and conditions set out under both agreements.”

Pallister said Wednesday he isn’t yet considering putting Omnitrax in default of the millions the province has provided in recent years.

Although there is no commercial business plan to back it up, a consensus is growing in the North that any solution going forward that does not include Omnitrax is the most preferred one.

Omnitrax chief commercial officer Peter Touesnard said efforts to sell the rail line have been put on hold since flooding damage halted service between Gillam and Churchill in late May.

Although talks have been going on for more than a year to sell the railroad and the Port of Churchill to Missinippi Rail Consortium, led by Mathias Colomb First Nation chief Arlen Dumas, no real progress has been made.

(Dumas was elected grand chief of the Assembly of Manitoba Chiefs on Wednesday. It is not clear how that will impact efforts by Missinippi to acquire the assets from Omnitrax.)

Another consortium of Northern First Nations and communities interested in making a pitch led by Mike Spence, the mayor of Churchill and Christian Sinclair, the chief of Opaskwayak Cree Nation, called One North, is still in the process of putting its business plan together.

After Omnitrax provided a lengthy technical briefing on Tuesday, Ted Bland, chief of York Factory First Nation and Spence both expressed their desire to see the railroad carry on with new ownership and management.

Spence said that the company’s exhaustive technical analysis of the flood damage on Tuesday was probably done as means to leverage a government buy out, which Spence has been advocating for for some time.

Bland said, “I think they (Omnitrax) want to force the government to do the work or provide the funding. I don’t think there is any commitment on Omnitrax’s behalf to put any new dollars in. They basically stated that. I think it’s time for them to hand it over. They should step aside and give the opportunity to another company and let them operate it. There is no real interest from them to do it.”

The company sent a vague statement Wednesday: “We will provide updates on our discussions with government and other stakeholders as events warrant,” wrote Hilary Sloan, from the Toronto public-relations firm Edelman.

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The area’s NDP member of Parliament, Niki Ashton, said it was “offensive” for Omnitrax to say the line was not viable, and repeated previous calls to nationalize the rail line.

“This is an American company that has benefitted from public funds time and time again. They have been all too happy to make their profits while letting the rail line and Port fall into disrepair,” Ashton wrote. “This fiasco underscores the need for the federal government to step in and show leadership on behalf of our North and Canada. The repairs must be prioritized.”

Churchill’s Liberal MLA, Judy Klassen has requested an emergency meeting with Pallister. “It’s unacceptable and downright unfair to subject residents to soaring food prices, fuel shortages and job losses,” she wrote in a statement.

dylan.robertson@freepress.mb.ca

nick.martin@freepress.mb.ca