Manitoba, Ottawa tab $147.6M for Hudson Bay Railway upgrades

OTTAWA — The Stefanson government is stepping up for Churchill, with the province joining Ottawa for the first time since 2017 washouts to keep the Hudson Bay Railway running, the Free Press has learned.

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OTTAWA — The Stefanson government is stepping up for Churchill, with the province joining Ottawa for the first time since 2017 washouts to keep the Hudson Bay Railway running, the Free Press has learned.

According to sources familiar with the announcement, Premier Heather Stefanson will join Northern Affairs Minister Dan Vandal at The Forks to reveal Wednesday a joint $147.6 million for maintenance and upgrades of the rail line which connects Churchill to The Pas.

The province is contributing $73.8 million, while Ottawa is adding $60 million to previously announced cash, for an announcement totalling $147.6 million.

The railway, Port of Churchill and its fuel-tank farm are all owned by Arctic Gateway Group LP, a consortium of Indigenous communities and rural municipalities along the rail line, which it took over in 2018.

The Trudeau government has spent more than $160 million to acquire, repair and maintain the railway, which has needed multiple upgrades in the past four years to cope with thawing permafrost.

In 2017, heavy flooding washed out multiple sections of the northernmost section, between Gillam and Churchill. The owner at the time, Denver-based Omnitrax Inc., had refused to repair the line and argued it was no longer economically viable. The northern community had to rely on costly flights for goods and months-long barge shipments.

Churchill's train station, completed in 1930, sits empty, as tracks lead to the Port of Churchill along the Hudson Bay Railway. (Dylan Robertson / Winnipeg Free Press files)

In August 2018, the Liberals bought the railway and transferred it to the nascent Arctic Gateway Group, and service finally resumed in November of that year.

The consortium was originally half-owned by Toronto financier Fairfax Financial Holdings Ltd. and Saskatchewan grain giant AGT Food and Ingredients Inc., both of whom gave up their share in March 2021. Both companies and the railway owners argued the change would help ensure local control for the rail line.

After the 2017 washouts, the Manitoba government led by premier Brian Pallister had funded some economic development initiatives in the North, but insisted numerous times the railway and port fell under federal jurisdiction.

Wednesday’s announcement suggests Stefanson wants to advance the PC government’s “Look North” strategy.

Since the 1930s, the railway has connected with CN Rail lines to transport Prairie grain to Canada’s only Arctic deep-water port. The route allows for shipments to arrive faster to some countries than through Atlantic ports.

KRISTIN ANNABLE / WINNIPEG FREE PRESS FILES

The operational headquarters of the Hudson Bay Railway in The Pas. The railway brings heavy goods from Winnipeg companies to the town on Hudson Bay, to be shipped onward to Nunavut communities.

Omnitrax had stopped grain shipments in 2015, due to high prices after Ottawa ended its monopoly on marketing grain, though the consortium has gradually brought back more of these shipments since 2019.

The railway brings heavy goods from Winnipeg companies to the town on Hudson Bay, to be shipped onward to Nunavut communities, and Via Rail service connects communities who have limited or no roads, while bringing tourists to Churchill.

Climate change has lengthened the port’s summer shipping seasons, while also shifting some of the ground upon which the railway sits.

Conservative Party federal leadership front-runner Pierre Poilievre has pledged to fast-track any regulatory proposal to ship oil from the Port of Churchill, a longstanding idea that has been controversial in northern Manitoba.

dylan.robertson@freepress.mb.ca

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