August 18, 2019

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Opinion

Omnitrax breaks silence on shutdown of grain terminal and rail service in Churchill

BORIS MINKEVICH / WINNIPEG FREE PRESS FILES</p><p>From left: Kevin Shuba, CEO of Omnitrax Canada, with the company’s president, Merv Tweed, president of Omnitrax, with CEO, left, and Omnitrax USA COO Darcy Brede in 2013.</p>

BORIS MINKEVICH / WINNIPEG FREE PRESS FILES

From left: Kevin Shuba, CEO of Omnitrax Canada, with the company’s president, Merv Tweed, president of Omnitrax, with CEO, left, and Omnitrax USA COO Darcy Brede in 2013.

Hey there, time traveller!
This article was published 12/8/2016 (1101 days ago), so information in it may no longer be current.

In has been nearly three weeks since Omnitrax Canada decided to close its Churchill grain terminal and cut rail freight service. And during that time, the Denver-based company refused to offer any explanation about why it took these actions.

However, after taking its lumps for the better part of a month, including a sound thrashing at the hands of Premier Brian Pallister, Omnitrax has finally decided to speak.

In an exclusive interview with the Free Press at the company’s office in downtown Winnipeg, Omnitrax CEO Kevin Shuba said he believes the federal and provincial governments are in essence trying to drive the company out of Manitoba without having to pay anything for the port and railway.

Shuba said the province is reneging on an agreement to provide financial assistance to the port, and the federal Liberal government is stalling a proposal to sell the port and railway to a consortium of first nations. All efforts by the company to talk to the two levels of government about these issues have been met with a deafening silence.

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Hey there, time traveller!
This article was published 12/8/2016 (1101 days ago), so information in it may no longer be current.

In has been nearly three weeks since Omnitrax Canada decided to close its Churchill grain terminal and cut rail freight service. And during that time, the Denver-based company refused to offer any explanation about why it took these actions.

However, after taking its lumps for the better part of a month, including a sound thrashing at the hands of Premier Brian Pallister, Omnitrax has finally decided to speak.

In an exclusive interview with the Free Press at the company’s office in downtown Winnipeg, Omnitrax CEO Kevin Shuba said he believes the federal and provincial governments are in essence trying to drive the company out of Manitoba without having to pay anything for the port and railway.

Shuba said the province is reneging on an agreement to provide financial assistance to the port, and the federal Liberal government is stalling a proposal to sell the port and railway to a consortium of first nations. All efforts by the company to talk to the two levels of government about these issues have been met with a deafening silence.

"For two years we have been talking (to the federal and provincial governments) ... with no response," Shuba said. "I’ll tell you why they don’t want to talk to us. Once they reach out and talk to us, they have to become accountable, and they have to be part of the solution.

"They also have to acknowledge the truth and the facts. And last, once they reach out and engage us, guess what, they have to make some decisions."

Shuba said he was particularly concerned about comments by Pallister, who accused Omnitrax of holding northern Manitoba hostage to wring more taxpayer subsidies out of the province. "It’s very easy to stand up in a press conference and say that we’re holding somebody hostage without having all of the facts," Shuba said of the premier’s attack. "Without engaging with me."

Although it was informative to have Omnitrax finally give its side of the story, there are still many points that don’t quite make sense.

For example, Shuba was unable to provide a salient explanation for the decision to remain silent for three weeks after shutting down grain operations, or to do so without any warning to government. He suggested that as a private company, Omnitrax had no obligation to tell anyone - including government - about its plans.

Winnipeg Free Press files</p><p>Port of Churchill</p>

Winnipeg Free Press files

Port of Churchill

At the same time, however, Shuba complained long and loud about the people who criticized Omnitrax, seemingly unaware that the most effective antidote for that problem would have been a rapid response from the company. Surprising government, and then running and hiding from the media, made Omnitrax look very much like the ruthless, unaccountable company described by Pallister in his news conference.

Shuba could also not offer a reasonable explanation for why it has done very little to advance the cause of the Mathias Colomb consortium that is seeking to buy the railway and port.

Shuba said a full proposal for federal funding to help the consortium buy Omnitrax assets has been stalled in Ottawa. However, Shuba said he had not actually seen a copy of the final proposal, and had made no effort to help move things along. Those comments do not make Omnitrax look like a company that is motivated to sell its assets.

Of even greater concern is the fact that Mathias Colomb Chief Arlen Dumas does not entirely support the claims made by Omnitrax. Dumas said in an interview that while information has been provided to Indigenous and Northern Affairs Minister Carolyn Bennett, the consortium is still in the early stages of putting together its final proposal.

"There are still things to shore up," Dumas said. "But we have let the feds know our intentions and have provided them with information. Now it’s just a matter of them developing what the next steps will be."

In fact, there is only one area where sympathy is even remotely appropriate when it comes to Omnitrax, and that is the way it’s being treated by the provincial government.

In 2015, Omnitrax signed an agreement with the former NDP government for funding to make repairs to the port, subsidize elevation fees and cover off operating losses for the summer shipping season. In total, this would have paid Omnitrax about $2.5 million. Shuba said the NDP, before it was defeated in the April election, pledged to extend the same agreement for this season.

However, Shuba said the Pallister government has refused to pay all the money owing from the 2015 agreement. Right now, Omnitrax has received about $800,000 for capital repairs and elevation subsidies. However, Shuba said the government has been non-committal about whether it would pay the remaining $1.7 million for operating losses.

In an email statement provided Thursday, Growth Enterprise and Trade Minister Cliff Cullen said the province has "a number of questions" about Omnitrax’s claims from the 2015 season and will make no further payment until a more thorough audit is completed. As for extending the agreement for this or future seasons, Cullen said Manitoba is "not interested in continuing to subsidize the operations of Omnitrax with money taken from Manitoba taxpayers."

Pallister is certainly under the gun to constrain expenditures, and it’s not hard to sympathize with his frustration at Omnitrax’s blitzkrieg strategy on the layoffs. However, the comments from Cullen reveal that the Tory government does not have any solution to the crisis in northern Manitoba. The railway in particular is more of a public amenity than a private business, and the province is going to have to provide some sort of leadership if it remains operational.

After hearing directly from Omnitrax, one thing is abundantly clear: all parties involved - the company and both levels of government - have been incredibly immature about addressing a very real problem in northern Manitoba.

Omnitrax may not have made many friends in Manitoba, but it did not bring the economic problems that afflict the railway and port on itself. Various federal policies, including most notably a decision to eliminate the Canadian Wheat Board, moved the goal posts on Omnitrax. Government owes Omnitrax a fair hearing to find a more lasting solution.

However, Omnitrax decision to lay off port workers and curtail rail service - all done without advance warning to government - was a rash and needlessly provocative strategy. Omnitrax clearly wants to sell the assets to first nations, and then remain in Manitoba as a contractor to manage those assets for the long term. However, its hardball tactics have only served to anger government to the point where it appears the province and Ottawa may let Omnitrax die a slow death just to be rid of the company.

The railway and port are essential infrastructure for the people of the north. And right now, those people deserve better than they’re getting from government and the company.

dan.lett@freepress.mb.ca

Dan Lett

Dan Lett
Columnist

Born and raised in and around Toronto, Dan Lett came to Winnipeg in 1986, less than a year out of journalism school with a lifelong dream to be a newspaper reporter.

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History

Updated on Friday, August 12, 2016 at 8:51 AM CDT: Typo fixed.

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