Ot­tawa puts up $117M to re­store rail line

Lethbridge Herald - - HEADLINE NEWS - Steve Lam­bert THE CANA­DIAN PRESS — WIN­NIPEG

The agree­ment to re­store rail ser­vice to the town of Churchill in north­ern Man­i­toba will in­clude at least $117 mil­lion from the fed­eral gov­ern­ment.

The fed­eral fund­ing con­sists of $74 mil­lion to help re­pair the dam­aged rail line and buy it, along with the town’s port, from Den­ver-based Om­ni­trax. Ot­tawa is also com­mit­ting an­other $43 mil­lion over 10 years to sub­si­dize op­er­a­tions of the rail line.

“Re­pair work on the rail line has al­ready be­gun ... and ev­ery ef­fort is be­ing made to com­plete the work and re­store rail ser­vice be­fore win­ter sets in,” In­ter­na­tional Trade Di­ver­si­fi­ca­tion Min­is­ter Jim Carr said at a news con­fer­ence Fri­day that of­fered few de­tails on what oth­ers in­volved in the deal are putting up.

The rail line is the only land link to the sub­arc­tic com­mu­nity of 900 people, known for its po­lar bear tourist sea­son and port on the west­ern shore of Hud­son Bay.

The line was washed out by flood­ing in the spring of 2017. Since then, goods and people have had to be flown in and prices for gro­ceries and fuel have sky­rock­eted.

The tourist econ­omy was hit hard, and some res­i­dents left town.

Two weeks ago, after months of ne­go­ti­a­tions, a con­sor­tium called Arc­tic Gate­way Group ham­mered out a deal to buy the line and port from Om­ni­trax, which had said it was los­ing money on the ser­vice and could not af­ford tens of mil­lions of dol­lars in nec­es­sary re­pairs.

The con­sor­tium in­cludes sev­eral north­ern com­mu­ni­ties, Toronto-based Fair­fax Fi­nan­cial Hold­ings and AGT Food and Ingredients, a Regina-based sup­plier of pulses and food ingredients.

Carr and con­sor­tium of­fi­cials would not re­veal Fri­day how much money the con­sor­tium part­ners are putting in — they re­ferred to an un­spec­i­fied pool of money — or how much money Om­ni­trax is be­ing paid.

Carr would also not say whether the fed­eral gov­ern­ment would put up more money if its an­nual sub­si­dies are not enough to pre­vent losses.

“You don’t talk about hy­po­thet­i­cals in this busi­ness.”

The rail line was once gov­ern­ment-owned, but a for­mer Lib­eral gov­ern­ment sold it to Om­ni­trax in 1997. The rail line suf­fered from high main­te­nance costs due to the vast boggy ter­rain it cov­ers, and lost a key cus­tomer when the Con­ser­va­tive gov­ern­ment in 2012 moved to end the Cana­dian Wheat Board monopoly on west­ern wheat.

Carr said the new own­er­ship group, which in­cludes a built-in cus­tomer base with AGT, will make the rail line vi­able.

Fair­fax’s pres­i­dent was equally con­fi­dent the re­stored line and port has un­tapped op­por­tu­ni­ties to ship goods to and from other coun­tries through the Arc­tic.

“The Rus­sians — we have roughly 50,000 people north of the Arc­tic cir­cle, they have a mil­lion and a half people and I said, 20 per cent of their GDP (goes) through there,” Paul Rivett said.

Churchill Mayor Mike Spence said the months that have passed with­out rail ser­vice have been hard on the town. But people from other parts of Canada reached out.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.