Silence deafening as Churchill shutdown shock spreads
Port owner Omnitrax saying nothing so far
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Hey there, time traveller!
This article was published 26/07/2016 (2386 days ago), so information in it may no longer be current.
A day after the potentially devastating layoffs at the Port of Churchill, none of the key players who have a role in determining the northern community’s future did anything to keep hopes afloat.
While residents in Churchill were reacting to the shock of the sudden layoff that affects more than 70 of the town’s workforce, the port’s owner Omnitrax was nowhere to be seen or heard. Moreover, representatives from both Ottawa and the province, who have been key partners in the community’s economic history, only relied on carefully worded statements that said little.
“It was a total shock,” said Teresa Eschuk, regional vice-president of the Union of Canadian Transportation Employees, which represents the workers at the port.
Niki Ashton, the NDP MP for Churchill-Keewatinook Aski, expressed outrage over the manner in which Omnitrax Canada is handling the situation, adding the layoffs — which have effectively shut down the port — are devastating for the community.
Omnitrax announced last December that it wanted to leave the Manitoba market and sell the Hudson Bay Railway that runs from The Pas to Churchill as well as the Port of Churchill.
Omnitrax Canada president Merv Tweed has been saying for months that talks with a consortium of northern Manitoba First Nations to acquire the assets were proceeding well, but it does not appear that a transaction is pending.
“I wonder to what extent Omnitrax is truly trying to find a solution,” Ashton said. “This is not how a company conducts itself if it wants to sell.”
Some observers believe the layoffs could be an Omnitrax strategy to leverage financial support from the public sector. Tweed, a former Conservative MP from Brandon, previously said the railway should be treated and subsidized as a public utility.
“If this is a tactic — and I have heard that as well — then it is a pretty sick one,” Ashton said.
Tweed did not return requests for interviews Tuesday from the Free Press but rumours abound as to why the action was taken.
One Manitoba transportation executive who has been involved in efforts to stabilize and grow the business case of the Hudson Bay Railway and Port of Churchill said, “It’s a troubled file. There are so many agendas.”
Ashton said her communication with Omnitrax officials has been strained for some time. Omnitrax sued the former Selinger government just prior to the April 19 provincial election, accusing Selinger and his government of breaching a non-disclosure agreement in relation to the proposed deal with the First Nations consortium.
But the degree to which Brian Pallister’s government is focused on the Churchill Gateway has been questioned by Ashton and others.
“I have not seen any encouraging message from this provincial government as of yet,” Ashton said.
Cliff Cullen, minister of growth, enterprise and trade, said in a statement Tuesday, “Manitoba’s new government is committed to the economic and social development of northern Manitoba. We are disappointed to learn of Omnitrax’s decision to lay off a number of their employees and would like to assure impacted port workers that (government departments) are investigating all avenues of assistance available to them.”
He said the province has invested $29 million into the Churchill Gateway system since Omnitrax acquired the assets in 1997 and that the province is focused on attracting investment, assisting entrepreneurs and facilitating expansion of existing opportunities
‘I wonder to what extent Omnitrax is truly trying to find a solution. This is not how a company conducts itself if it wants to sell’ — Niki Ashton, NDP MP for Churchill — Keewatinook Aski
“We will continue working with our partners with the Town of Churchill and all other stakeholders to provide a stronger economic future for the region,” Cullen said.
Last year was the second lowest volume of business on record at the port, when less than 200,000 tonnes of grain were shipped. (Average annual shipments for the past several years have been about 500,000 tonnes.) Since the wind-up of the Canadian Wheat Board’s grain marketing monopoly in 2012, the federal government has provided a subsidy of $9.20 per tonne for grain shipped through the port. That subsidy is scheduled to expire after the 2017 shipping season
Keystone Agricultural Producers president Dan Mazier and others said they were surprised at the decision because Omnitrax officials had indicated to them very recently that the coming season was looking good.
Mazier said in a statement, “This is a major blow to us, especially when there appears to be an exceptionally large crop coming. We’ve had so many issues shipping our grain east and west to port, and this was an excellent option. If ever there was a case for government intervention, this is it.”
The federal government is believed to have been in close communication with Omnitrax and the First Nation group that has been in negotiations to buy the assets since the beginning of the year.
Terry Duguid, Liberal MP for Winnipeg South, headed a group that worked to find a buyer for the asset when CN wanted to abandon the so-called Bay Line in the mid-1990s.
Navdeep Bains, the federal minister of innovation, science and economic development, issued a statement late Tuesday afternoon, saying, “I am disappointed in the decision by Omnitrax to close the port and issue layoff notices to its employees. My heart goes out to all the families that are affected. The community of Churchill plays an important role in the economy of Manitoba, given that it is a strategic gateway to northern and indigenous communities. I am in ongoing discussions with my cabinet colleagues and will continue to monitor the situation closely.”
Mazier is asking the federal government to come up with a plan that will ensure the port opens for the 2017 season, and beyond.
Judy Klassen, the Liberal MLA for Keewatinook, said she was focusing on the impact of the workers.
“They are worried about how they are going to buy food and pay their rents,” she said. “Some are talking about going on welfare.”
Ashton, who has represented the region that encompasses all of Omnitrax’s operating territory since 2008, has not had any direct communication with Omnitrax officials for years.
She said the First Nations group that has been negotiating for the purchase of the railway and port told her they, too, were surprised by the news.
Arlen Dumas, chief of the Mathias Colomb First Nation at Pukatawagan who has been the leader of those efforts, was also unavailable Tuesday.
Efforts have been ongoing for many years to diversify the portfolio of goods shipped out of Churchill to no avail. Many involved in the file over the years have expressed frustration at the lack of substantial action being taken.
A high level report that came out in early 2013, called the Federal-Provincial Task Force on the Future of Churchill, concluded among other things, “While many of these challenges are not new, the end of the Canadian Wheat Board monopoly and the resulting changes to the grain industry in the West have provided the impetus to explore new directions with a greater sense of urgency.”
The Manitoba Chambers of Commerce issued a statement on Tuesday saying time is of the essence and that it’s crucial to come up with a proper solution for the future operation of the port and worries that even a temporary closure will damage prospects even further.
“The port’s viability is more than Manitoba’s issue alone and more than the movement of grain. It is the Gateway to the Central Arctic, and its future is important to all of Canada,” the chamber’s release said.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.
Updated on Tuesday, July 26, 2016 8:03 PM CDT: Update story
Updated on Tuesday, July 26, 2016 9:41 PM CDT: Minor edit