October 1, 2020

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Line to Churchill needs more funding: owners

Federal government asks province to put up more money for railway

The Arctic Gateway Group says it requires more money to keep operating the train line to Churchill. (John Woods / The Canadian Press files)

The Arctic Gateway Group says it requires more money to keep operating the train line to Churchill. (John Woods / The Canadian Press files)

OTTAWA — The railway to Churchill needs even more government funding to keep running on thawing permafrost, its owners say, arguing $74 million in federal funding to maintain the line isn’t enough.

The Trudeau Liberals are asking the Pallister government to pick up the tab.

"There’s a level of urgency with COVID, and funding ending, because of the revenue pressure," Murad Al-Katib, head of Arctic Gateway Group, told the Free Press.

He would not specify how much funding the group is seeking from both levels of government.

The Hudson Bay Railway washed out between Gillam and Churchill in spring 2017, leading to a lengthy dispute with Denver-based Omnitrax, which ultimately sold the rail line to Ottawa.

The Liberals transferred Churchill’s railway and port to a new, local consortium called Arctic Gateway in September 2018, spending $74 million to acquire the line, transfer it and fund repairs up until the end of this year.

The rail line resumed service in late 2018. The federal government has also allocated $43 million over the coming decade to subsidize operations.

That’s not enough money, according the consortium.

Earlier this month, War Lake Chief Betsy Kennedy, a consortium board member, wrote in the National Post that the line could stop running before the end of the year if governments don’t cough up more cash.

"The cost of fixing the tracks running through muskeg has been much higher than expected. Without an additional investment from the federal and Manitoba governments, the train could fall silent once again before the year ends," reads Kennedy’s July 4 letter.

Yet Al-Katib insisted Monday that the timeline isn’t quite so dire.

"We’ve got funding in place to sustain ourselves to the end of the year, so that’s not the issue," he said. "It’s really looking at the forward program, in 2021 to 2025."

The firm wants to better anchor the track on muskeg, and do dredging around the port to repair its wharf.

"The (federal) government is talking about stimulus dollars coming out; and we want to be ready for this," said Churchill Mayor Mike Spence.

The COVID-19 pandemic has cut anticipated tourism while a global decline in mining operations means fewer freight clients for the railway, Al-Katib said, though the grain harvest will ramp up fall shipments.

He said larger shipping containers will help increase summertime shipments in the coming years, making the supply chain more economically viable.

Al-Katib was critical of the Pallister government, saying Ottawa has invested the lion’s share of funding.

"The province, with the exception of some very modest training dollars… has been absent in the support of this infrastructure, and that’s been quite a difficult position for us," he said.

Northern Affairs Minister Dan Vandal was not available Monday for an interview, but suggested in an email that Pallister should put up more funding.

"This is an opportunity for all orders of government to work together and support this great economic project. That’s why, earlier this month, I requested a meeting with Premier Pallister to discuss next steps with all partners," Vandal wrote.

Pallister’s spokeswoman responded that he will consider the group’s request.

"The province is reviewing information received from Arctic Gateway Group and planning to engage in discussions with the group and the federal government."

Meanwhile, Arctic Gateway is still fighting a Federal Court appeal against a 2018 regulator ruling that compelled Omnitrax to fix the railway or potentially face fines or a takeover.

Al-Katib said his group inherited both the court case and documents suggesting Omnitrax couldn’t actually have repaired the line within the timeline the Canadian Transportation Agency provided.

"The railway could not have been fixed, at the time the level-of-service breach was adjudicated," Al-Katib said.

dylan.robertson@freepress.mb.ca

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