PrairiesCan report offers Churchill port, rail line encouragement

Hey there, time traveller!
This article was published 24/01/2025 (300 days ago), so information in it may no longer be current.

When Ottawa invested $117 million in the creation of Arctic Gateway Group, allowing it to purchase the Hudson Bay Railway and the Port of Churchill in 2018, it was not at all clear how well the enterprise would fair.

Since then, between the federal and Manitoba governments, an additional $160 million has been invested.

What we can say is the trains are running — both passenger and freight — and the port remains open and has experienced a modest amount of activity.

So much has been said and written about why it’s important to keep that critical infrastructure going and there’s been plenty of speculation about the potential for the northern Manitoba port and rail line in the future.

As if to lay an even firmer foundation for that future, Prairies Economic Development Canada has taken the somewhat unusual action of commissioning an evaluation of its initial $117 million investment, which came at a time when then-owner Omnitrax was unprepared to invest in maintaining the infrastructure and the rail line had suffered terrible weather damage, shutting down service for more than a year.

Although it may not be the kind of high-grade analysis investment bankers might prefer, the 26-page “Evaluation of the Restoring the Rail Service to Churchill Initiative (RRCI)” is effectively a piece of documented encouragement that will allow Arctic Gateway to continue progress on its work.

Terry Duguid, the Winnipeg MP recently named minister responsible for PrairiesCan, has been active on the Churchill file since 1996 (when he worked with then-regional cabinet minister Lloyd Axworthy). At that time, Canada was prepared to decommission the port and CN was prepared to abandon the rail line.

“We saved the rail line and the port the first time and since 2018, we now have a very, very strong partnership with the provincial government who are stepping up and who we are working hard for the benefit of northerners and the rest of the province,” Duguid said.

The PrairiesCan report concludes: “The RRCI responded to a crucial need of communities and First Nations in northern Manitoba. During the period of the rail line’s washout, the economic impacts were significant. If the rail service had not been restored, the negative effects would have been likely to compound and exacerbate, entailing ongoing high costs for residents, as well as provincial and federal governments. There would have been a loss of future opportunities for economic development, such as a possible shipping ‘corridor.’”

The report does, however, flag a number of operational issues, including: the trains are not wheelchair accessible, the need for a better ticketing system, passenger experience and communication about the enterprise to the communities along the Hudson Bay line (who are now the owners of the business).

Chris Avery, who was named CEO of Arctic Gateway in July, said the report is encouraging. “I think it’s very reflective of the success of the partnership between us and PrairiesCan and the governments … in terms of governance and the organization around everything that has evolved since the days of Omnitrax.”

Avery said, as a business, Arctic Gateway has to keep its customers happy, whether it be the stakeholder community or business community.

“We are always trying to continue to improve on that,” he said.

(The passenger experience is Via Rail’s responsibility and Avery believes AGG’s relationship with Via is a good one.)

The report only deals with the initial $117 million influx and it reports infrastructure repair has gone well.

“We have the railway almost up to where we want it to be. We still have work to do, but it is in better conditions than it has ever been across all parts of the railway,” Avery said. “Now we are turning our attention to the port, which has equally been neglected over the decades.”

It may not be Avery’s job to worry about Canada exercising its sovereignty in the North, but Duguid is right to make the point regarding Ottawa’s investment in this community-owned business.

“I think in this age where we have some challenges with the incoming administration in the U.S. … This is going to become an even more cherished asset, helping us to diversify our exports,” Duguid said. “I think Churchill is going to play an increasing role in Arctic sovereignty.

“We need more infrastructure further north, of course. Defence of the Arctic is going to be very, very important and Churchill is going to provide a very important role.”

Meantime, the report states: “At this time, it is too early to determine if or to what extent the commercial viability of the (rail) line and port terminal assets has been enhanced.”

That’s something that’s very much on Avery’s mind — and what he and his team are working hard at advancing. Last year’s shipment of zinc concentrate from HudBay Mineral’s mine in Snow Lake was symbolic of that.

“We’re working hard at building up the revenue stream to match the expenses,” he said.

Ultimately, the success will be determined by AGG’s success in beating the bushes to attract cargo.

martin.cash@freepress.mb.ca