Feds drop hint of a forthcoming takeover of Hudson Bay Railway, port

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This article was published 15/11/2017 (2353 days ago), so information in it may no longer be current.

OTTAWA — The federal government has hinted it may soon have a takeover deal for Churchill’s troubled rail line, though Ottawa refuses to clarify a series of allegations by its current owner, Omnitrax.

In a late Thursday news release, Energy Minister Jim Carr said Toronto-based Fairfax Financial Holdings Inc. “has expressed interest in partnering with” the consortium of two northern Manitoba groups that have joined forces in the hopes of taking over the Hudson Bay Railway and Port of Churchill.

It’s the first public sign of progress since the Liberals appointed Wayne Wouters, the former head of the federal bureaucracy, two months ago to negotiate transferring both assets into local hands.

Those talks started after Missinippi Rail and One North set aside competing bids between a First Nations company near Flin Flon and residents who live along the line.

Carr wrote the news “has the potential to contribute to an arrangement” where the consortium could have a “sustainable business approach that results in a safe and reliable rail line.”

In the release, Fairfax president Paul Rivett wrote he was “optimistic about the prospects of northern gateways.”

Fairfax has invested in AGT Food, which operates almost 700 kilometres of rail line across Saskatchewan. Part of that line is owned by Big Sky Railway Corp., which the Free Press reported last month has been part of the transfer talks.

Rivett added “partnering with First Nations and communities is the right model for this investment.”

Churchill Mayor Mike Spence, who co-leads the One North bid, said Thursday’s announcement sparks optimism for the northern Manitoba town of 900 on the shore of Hudson Bay.

“We are pleased that there are shippers and companies that see the value of our port,” he wrote. “We look forward to an important 2018 season that begins with the repair of our rail line.”

The news comes among mounting anxiety in Churchill over rising food and gas prices, and uncertainty in parts of the flood-damaged rail line that are still operating. Denver-based Omnitrax has cut service and removed rail equipment from Thompson and The Pas, where fuel suppliers are opting for truck delivery.

Ottawa released the news two days after Omnitrax filed a notice of intent to seek arbitration under the North American Free Trade Agreement. Federal bureaucrats continued to evade questions Thursday about the company’s allegations.

In its Tuesday filing, Omnitrax claimed Transport Canada gave an impossible deadline to fix the rail line, low-balled its financial value and bungled a 2007 project to supply light-aluminum rail cars. It also said Ottawa’s 2007 commitment to fund $8 million to upgrade the line was only partially completed.

Transport Canada said the foreign-affairs department would have to answer whether those four claims were true; Global Affairs Canada did not answer.

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Instead, spokeswoman Natasha Nystrom clarified Tuesday’s filing can’t reach arbitration for at least 90 days.

“The government of Canada is reviewing the information provided in the notice of intent,” she wrote, saying the feds “will vigorously defend this claim” if it proceeds.

Meanwhile, the University of Winnipeg declined to comment on northern Manitoba MP Niki Ashton calling on them to strip its honorary degree from Omnitrax founder Pat Broe.

“We sympathize with the residents of Churchill who want practical solutions for their community and are caught between competing interests and lawsuits. We have no further comment at this time,” university spokeswoman Diane Poulin wrote.

dylan.robertson@freepress.mb.ca