Industry could pull up stakes and move to Quebec as a result of Churchill line closure

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This article was published 24/11/2017 (2885 days ago), so information in it may no longer be current.

OTTAWA — Winnipeg shipping companies warn multiple Manitoba industries could see a chunk of their business go to Quebec, as the ruptured Churchill rail line speeds up an ongoing trend of Nunavut communities relying on Eastern Canada.

“It’s been a really difficult year,” said Jay Michno, co-owner of Arctic Expediting.

“Business, as far as we can tell, is starting to leave the province.”

Michno’s company ships construction materials, vehicles, heavy equipment and chemicals, mostly to the 10,000 residents of Nunavut’s western Kivalliq region.

He buys products near Winnipeg, and puts most of them on the rail line to the northern Manitoba town of Churchill to then ship them further north by sea.

When the rail line washed out May 23 near Gillam, it was the start of the shipping season and only some of Michno’s freight had reached Churchill.

Shipments were stranded in Thompson, costing customers huge sums to get their products back down to Winnipeg and onwards by truck to Montreal. Michno has since relied on trucking supplies to Montreal ports from Winnipeg.

“Typically, we would do 90, 95 per cent… of operations through the Port of Churchill, and this year everything had to go through Montreal,” said Michno. He adds Manitobans don’t realize how frequently an array of industries based in the province ship up to the territories.

Though his long-term contracts have helped him almost match the cost of trucking to Montreal to that of shipping through Churchill, he knows Quebec companies are eating up his client base with cheaper offers.

“Ultimately, if there’s not an option to ship right from Winnipeg straight north… that’s what we’re going to see more an more of,” he said.

Michno says it’s only sped up a trend of abandoning the Churchill line. Since about 2010, his company faced steadily rising costs from both sealift companies and Hudson Bay Railway owner Omnitrax’s fees.

“We saw customers moving to vendors in Montreal and taking their business there and shipping through that port,” he said. “We definitely lost noticeable business to companies in Quebec.”

Other companies echo his dismay.

“It’s been terrible since the track went down,” said Jim Ramsay, owner of Arctic Connection.

His company ships 1.36 million kilograms of supplies each year, from food and vehicles to classroom supplies and houses.

“Nobody’s paying attention to it, but it’s huge and it’s going to get bigger and bigger,” said Ramsay, who has been shipping to Nunavut for 25 years. “You’re going to see Manitoba business losing.”

For example, he said his company buys 50 vehicles a year from Winnipeg dealerships, but Montreal will likely have cheaper options.

He suspects hundreds of cars could be left unsold in Manitoba each year.

“The Manitoba government is not paying much attention — they say Churchill, but you’re talking millions of dollars of supplies that come out of Manitoba into the Kivalliq region.”

Ramsay has moved almost all his business onto flights out of Thompson, adding 40 to 50 cents onto each pound. The summertime barge shipments he’s using out of Quebec means orders need to be placed a month in advance.

A decade ago, Baker Lake Contracting & Supplies acquired Umingmak Supply, which ships supplies from Inkster Industrial Park, accounting for 10,000 tonnes of cargo in 2011 — no one from the company was available for an interview this week.

Similarly, Arctic Buying Company focuses on food shipments, and has reportedly seen shipping costs rise dramatically.

Not all suppliers are hard hit. Ryan St. John, president of Eskimo Point Lumber Supply, said his firm opted for sealifts due to costs and unreliability along the Hudson Bay Railway. “For us, it’s really business as usual,” he said. “We just lose another option for shipping.”

The provincial government wouldn’t say whether they’ve studied the hit to Manitoba suppliers this year, or if any of the $500,000 Premier Brian Pallister pledged in September for Churchill has been allotted for this fiscal year.

“Our government has been primarily focused on the safety and security of the community by ensuring the supply of propane and fuel for the coming winter, and minimizing pricing hardships on food and other essentials,” reads a statement from a government spokesperson, with no name attached.

Manitoba NDP labour critic Tom Lindsey said the province needs to put money behind its talk of boosting trade.

“We’ve got a port right in our backyard that we can be using throughout the province to transport stuff, not just to Nunavut, but to Russia and other points,” he said. “Instead, the provincial government is ignoring that opportunity.”

Meanwhile, the province has not decided whether to follow Ottawa in suing Omnitrax for the $20 million it spent under a 2008 funding agreement.

The province has not provided the contract, which Omnitrax consented to be released to the Free Press a month ago.

As always, the province highlighted that rail and ports are federally regulated.

“We have reserved all of our legal rights and claims against Omnitrax and will continue to actively monitor legal steps taken by the federal government,” wrote a spokesman.

dylan.robertson@freepress.mb.ca