Loss of corporate rail, port partners presented as win for Churchill

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This article was published 11/03/2021 (1704 days ago), so information in it may no longer be current.

OTTAWA — Churchill’s railway and port owners have lost both their corporate backers, but insist that having northern Manitobans in full control will be better for the region’s future.

Toronto financier Fairfax and Saskatchewan grain giant AGT Foods announced Thursday they’d given up their combined 50 per cent share in Arctic Gateway Group.

“They have decided to move along; they’ve given us the ownership to take this on, and we’re pretty excited about it,” said Churchill Mayor Mike Spence, who co-chairs Arctic Gateway.

“This is a Manitoba company now that really has an opportunity for success.”

In fall 2018, The Trudeau government helped transfer the Hudson Bay Railway and Port of Churchill from Denver-based Omnitrax to a consortium of northern Manitoba groups.

Arctic Gateway was launched by First Nations bands and town councils served by the railway, which had washed out in 2017, requiring costly repairs.

Proponents hail Churchill as a strategic asset in a world increasingly focused on Arctic shipping routes with Canada’s only northern deep-sea port, and Fairfax and AGT Foods cited this long-term potential in joining Arctic Gateway.

Yet repairs and maintenance to the railway have cost more than anticipated, and members of the consortium have asked Ottawa for a bailout given the economic disruption caused by the COVID-19 pandemic.

In the two shipping seasons since its takeover and repair, the port and railway had completed seven grain shipments for market abroad, as well as six cargo top-ups for shipments to Nunavut.

On Thursday, everyone involved in the project insisted they remain optimistic.

“We all decided it was the best outcome; for us it’s a happy, celebratory day,” said Murad al-Katib, the head of AGT Foods.

Asked why his group was pulling out if they feel the project is viable, al-Katib insisted one of the possibilities from the start was empowering local interests to take over the project.

He said AGT helped shape corporate policies, such as financial protocols and labour agreements with staff.

“A really strong goal of that partnership was capacity-building, within the communities and the company. This was actually a contemplated outcome,” he said. “It was time.”

Yet town residents said on Facebook they were under the impression that Fairfax and AGT were going to be part of the project for at least a decade, which was also Lloyd Axworthy’s understanding.

“I’m certainly surprised,” said Axworthy, the former Liberal federal cabinet minister who has advocated for Churchill for decades.

“It does seem like an awkward move,” he said. “It’s terrific for reconciliation, but I didn’t see AGT and Fairfax withdrawing.”

Axworthy wondered if both corporate partners were curtailing projects due to COVID-19, and hoped the local investors can maintain connections with financial institutions that the companies arranged.

The Trudeau cabinet declined an interview Thursday, instead issuing a statement on behalf of both Manitoba ministers Jim Carr and Dan Vandal.

“We want to thank the consortium for their hard work over the last four years and for their investment and commitment to repair the rail line. The long-term viability of this important national project is stronger today because of their contributions,” reads the statement.

The ministers wrote that the local owners have “a very strong transition plan in place, and we are excited and confident in the future of the project.”

Area MP Niki Ashton welcomed the news, saying local interests had tried for decades to get full control of the assets.

“It is historic to see full ownership of the port and rail line, that are core to who we are in northern Manitoba, being owned by Manitobans, First Nations and northern communities,” the New Democrat said.

“There’s been a real sense of hope these last few years, and even more so in this announcement.”

She said the Liberals should boost their decade-long funding package, which is a $43-million operating subsidy on top of $117 million to acquire and repair the railway.

Ashton, Carr and Vandal all repeated calls for the province to boost its financial support. The Pallister government has repeatedly said it supports Churchill’s town infrastructure but that railways and ports fall under federal jurisdiction.

Axworthy suggested Ottawa work with the Biden administration to anchor Churchill as a strategic location for trade and security.

“Canada has so few hubs in the North that you can build on,” he said. “They’re going to have to do something.”

dylan.robertson@freepress.mb.ca