The Hudson Bay Port Company is suing the government of Manitoba for more than $1.7 million, alleging it reneged on a promise by former premier Greg Selinger to cover the losses of the Hudson's Bay Railway and Port of Churchill for the 2015 season.

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This article was published 8/12/2016 (1656 days ago), so information in it may no longer be current.

The Hudson Bay Port Company is suing the government of Manitoba for more than $1.7 million, alleging it reneged on a promise by former premier Greg Selinger to cover the losses of the Hudson's Bay Railway and Port of Churchill for the 2015 season.

The company says it is owed $1,732,655 in operating losses, plus damages, interest and costs.

A statement of claim filed Dec.1 at the Court of the Queen's Bench states Selinger promised to cover the losses for the year as part of a deal to ensure it would continue to operate the railway and deep-sea Arctic port in northern Manitoba.

A formal agreement on the matter was signed in July, 2015.

One year later, Omnitrax, which owns The Hudson Bay Port Company, announced it was shuttering the Port of Churchill and in direct response, Premier Brian Pallister produced a copy of the agreement, condemning the NDP for the "subsidy" it had offered to keep the port operational. He warned the company he would not follow suit.

"We are not, as a government, interested in the business of subsidizing large corporations by using money taken from small businesses and individuals," he said at a news conference in July.

The statement of claim states an audited financial statement was given to the NDP government in March of this year, prior to the provincial election. It showed the company had lost over $1.7 million during the 2015 operating season. Based on the terms and conditions of the agreement, the government had until April 29 to make a full payment.

On April 19, the NDP was voted out of office and the Progressive Conservatives took over.

The company is now alleging the current government has refused to follow through with the provision in the agreement to cover its 2015 losses.

By the middle of October, the government allegedly told the company there "were no outstanding issues with respect to the operating losses of 2015," but no payment was made to the company.

Pallister's communications director, Olivia Baldwin-Valainis, said in a prepared statement that the government is "unable to comment on a matter that is subject to legal proceedings," but then added, "the previous NDP Government did make a number of deals in the year leading up to the election which are subject to fresh eyes under the new administration."

The statement of claim concludes by charging the government with partaking in a "reckless disregard of its legal obligation."

"Manitoba is subject to and ought to be considered to be acting in a malicious and/or high-handed manner, such that an aggravated or punitive damages should be awarded to punish the reckless disregard by Manitoba of it legal obligations," it states.

In a prepared statement, Omnitrax Canada president Merv Tweed said the company had no choice but to file a lawsuit after it was given no explanation for why the government was not paying the company.

"We have been provided with no explanation despite repeated demands for payment as to why the government has failed to pay the losses for 2015, thereby necessitating the filing of the statement of claim," Tweed said.

Selinger and the NDP refused to comment on a matter that is before the courts.

kristin.annable@freepress.mb.ca

Twitter: @kristinannable