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No bailout for Omnitrax: Pallister

Premier accuses firm of shutting down Churchill port after he refused its request for money

Hey there, time traveller!
This article was published 28/7/2016 (940 days ago), so information in it may no longer be current.

Premier Brian Pallister suggested Thursday the decision by Omnitrax to close the Port of Churchill is because the province refused its latest request for a bailout.

Pallister spoke strongly against the “subsidy” that was given to the Denver-based company in 2015 by the former NDP government, proclaiming his government won’t 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.

“Leveraging in order to obtain a better business deal is not the way that we are going to be engaged with corporations, now or in the future.”

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Hey there, time traveller!
This article was published 28/7/2016 (940 days ago), so information in it may no longer be current.

Premier Brian Pallister suggested Thursday the decision by Omnitrax to close the Port of Churchill is because the province refused its latest request for a bailout.

Pallister spoke strongly against the "subsidy" that was given to the Denver-based company in 2015 by the former NDP government, proclaiming his government won’t 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.

"Leveraging in order to obtain a better business deal is not the way that we are going to be engaged with corporations, now or in the future."

Pallister spoke publicly for the first time since Omnitrax issued layoff notices Monday for the entire unionized workforce at the port, effectively shutting down the country’s only deep sea Arctic port.

The sudden layoff affects more than 70 people of the northern town’s workforce, almost 10 per cent of the town of 800.

At his news conference, Pallister produced an agreement between the former NDP government and Omnitrax-owned Hudson Bay Port Company in 2015, which expired last March.

He called it a "subsidy bailout as a consequence of a threat" and hinted it was his refusal to follow suit that led to Omnitrax’s decision to shutter the port.

"And now that threat is being repeated this year," Pallister said. "I don’t respond ever to threats."

Pallister would not confirm whether Omnitrax asked for a similar deal from his newly elected government, citing a non-disclosure clause in the 2015 agreement.

He did confirm the existence of a letter that "expressed the desire to see an agreement in place."

When asked if Omnitrax was told the "gravy train is over" and then the layoffs occurred, Pallister replied, "Yes, you got that right."

The agreement with the Selinger government included a provision for the province to pay for capital improvements to the port and pay $3 per metric tonne of grain exported from the port during the 2015 season.

MIKE DEAL / WINNIPEG FREE PRESS</p><p>Premier Brian Pallister has a brief discussion with press secretary Olivia Baldwin-Valainis while answering questions regarding the Port of Churchill.</p>

MIKE DEAL / WINNIPEG FREE PRESS

Premier Brian Pallister has a brief discussion with press secretary Olivia Baldwin-Valainis while answering questions regarding the Port of Churchill.

The province would also be on the hook for operating losses incurred by the Hudson Bay Port Company in 2015.

Flin Flon NDP MLA Tom Lindsey defended his party’s move in 2015, arguing the NDP did what needed to be done to keep the port operating.

"As much as I might not like giving public money to private enterprise, there are times when that is what has to happen to secure workers’ jobs and to ensure something as important as keeping this port open and available for shipping to the North," Lindsey said.

Lindsey said nationalizing the port might be the best way to keep it in business. The commercial viability dropped after it lost its biggest customer when the Canadian Wheat Board was dismantled.

"Sometimes things provide a service to people that can’t possibly make money, but people need it to survive," Lindsey said.

Pallister said he’s legally prevented from getting into the 2015 agreement’s financial details.

His communications director, Olivia Baldwin-Valainis, confirmed more than $800,000 flowed from the Selinger government to Omnitrax. Other aspects of the subsidies claimed under the agreement remain pending, she said in a statement.

Omnitrax officials have said nothing since the layoffs were announced.

For the past year, Omnitrax has said it wants to sell the port and its 1,300-kilometre rail line. A consortium of 10 northern First Nations led by Arlen Dumas, chief of Mathias Colomb Cree Nation in Pukatawagan, has been negotiating to buy it, but no deal has been made so far.

On Wednesday, Omnitrax said it would cut its rail freight service in half — to once per week — which threatens to drive up the cost of food and other goods in Churchill and the north.

Pallister refused to throw his support behind any option for the port or rail line and would not commit to subsidizing the consortium’s proposal.

He hinted the federal government would take the lead on any deal, noting he is choosing not to "jump in front of the federal government’s process."

"There is a willingness on the part of the federal government, I believe, to take a look at the options that have been presented," he said.

A request for comment from Navdeep Singh Bains, the federal minister of innovation, science and economic development, was not returned.

kristin.annable@freepress.mb.ca

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History

Updated on Thursday, July 28, 2016 at 2:24 PM CDT: Adds sidebar

2:25 PM: Adds video

2:36 PM: Changes photo

6:01 PM: Updates story

7:29 PM: Changes thumbnail photo

July 29, 2016 at 5:55 AM: Videos added.

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