Railway labour dispute puts potential new spotlight on northern Manitoba

Hey there, time traveller!
This article was published 21/08/2024 (456 days ago), so information in it may no longer be current.

Industry groups across the country had their lobbying efforts cranked up to 11 on Wednesday, urging the federal government to impose binding arbitration as they stared down a 12:01 a.m. EDT deadline on a lockout/strike of 9,600 rail workers.

If such a work stoppage happens, it will be the first time both Canadian National Railway and Canadian Pacific Kansas City will be shut down concurrently.

The resulting economic disruption is estimated to exceed $1 billion per day of cargo moved by both railways. The Canadian Manufacturers & Exporters group says it will cost every one of its members an average of $275,000 for every day rail service is halted.

Western Grain Elevator Association, which represents the handlers who effectively buy and ship most of the Prairies grain production, estimate a service disruption will mean $50 million per day in lost sales during and after harvest (which won’t be made up because there’s other grain scheduled to move on every ensuing day).

There is talk of potential job losses and grocery shelves thinning out — although some experts, such as University of Manitoba supply chain management Prof. Barry Prentice, doubt that will be the case — and all manner of disruption to the normal economic dynamics of the country.

One part of the country that may be relatively immune to any such economic disruption is northern Manitoba.

The irony is not lost on Chris Avery, CEO of Arctic Gateway Group, the company that owns the Hudson Bay Railway and Port of Churchill.

In 2017, the eyes of the country were on Churchill because its railway link had been rendered unusable after weather damage and years of declining maintenance by its former owners. The remote northern town was cut off from its only land-based supply chain for all its essential goods.

The irony is enhanced because while the rest of the country teeters on being unable to ship any product by rail, the long-dormant northern seaport successfully showed off its capacity to ship a bulk commodity it had never handled before.

Earlier this week, a vessel left the Port of Churchill with the first shipment of mineral product — zinc concentrate from HudBay Minerals’ Snow Lake mine — bound for export to Europe.

“It highlights the importance of Canadian infrastructure and our need to invest in it,” said Avery. “As a country, we need to invest in optionality when it comes to infrastructure.”

As of Wednesday evening, it was unknown if there would be an 11th-hour settlement of the rail labour dispute. Regardless, HBR’s regular run to Churchill from The Pas will carry on as scheduled.

Avery said Arctic Gateway — owned by Indigenous and northern communities along HBR — had already planned to ship extra fuel to Churchill in the event the national railways shut down. (Fuel is the one bulk product HBR regularly receives from CN from the interchange the two railways share in The Pas. Just about everything else is trucked up to Thompson and then loaded onto HBR railcars.)

“We have kept abreast of the situation and the marine tank farm in Churchill has a large inventory of fuel to sustain the community in case of a potential rail service stoppage,” Avery said. “It won’t last forever, but there’s more inventory than normal in anticipation of a stoppage.”

Avery is under no illusions the HBR and port can pick up the slack from CN and CPKC, but the long-held vision of leveraging Manitoba’s status as a maritime province has been given some new context.

The CEO is quick to state his gratitude for the government of Canada and the province of Manitoba, whose recent $60-million commitment to capital improvement on the rail line is essential to its operation. And he knows there’s plenty of work to do to entice others to ship mineral concentrate or grain or any other commodity.

Even though board members of national agricultural producer groups were saying Wednesday no other country in the world has so far to ship its grain to port, Churchill has a long way to go even to get back to the modest volumes it was handling during the final years of the Canadian Wheat Board.

“We’ve had some cursory conversations with agricultural organizations and we hope to have more in the future,” Avery said.

Churchill is not going to compete with the ports in Vancouver or Montreal or Halifax — at least not in the next couple of decades — but who knows how climate change will alter transportation logistics? In this case, it is a labour dispute, but just a couple of years ago, natural disasters blocked the railroads’ access to Vancouver through the mountains.

Avery said the HBR and Port of Churchill are not yet at the level of reliability and efficiency standards of the Class 1 railways. But it has an ambitious business plan, reaching $1 billion in annual GDP contribution in the next few years.

Who knows what the frustration over the current rail controversy might lead to when it comes to investment in infrastructure “optionality?”

martin.cash@freepress.mb.ca