Rail com­pany files NAFTA com­plaint

Medicine Hat News - - BUSINESS -

OT­TAWA The own­ers of a bro­ken rail line in north­ern Man­i­toba that has cut off the sub­arc­tic town of Churchill served no­tice Tues­day that they plan to file a com­plaint against the fed­eral gov­ern­ment un­der the North Amer­i­can Free Trade Agree­ment.

The for­mal no­tice from Den­ver-based Om­ni­trax is the lat­est vol­ley in an on­go­ing bat­tle over who is re­spon­si­ble for the rail line left in­op­er­a­ble by spring flood­ing, leav­ing Churchill’s 900 res­i­dents fac­ing higher food and fuel prices and lower tourism num­bers.

Om­ni­trax said Ot­tawa’s de­ci­sion to end the Cana­dian Wheat Board’s mo­nop­oly on western wheat and bar­ley in 2012 dras­ti­cally cut grain ship­ments along the Hud­son Bay Rail­way and through the Port of Churchill be­cause the open mar­ket al­lowed pro­duc­ers to use south­ern rail lines and ports, which are Cana­di­anowned.

Om­ni­trax’s Cana­dian cur­rent pres­i­dent, Merv Tweed, was a back­bencher in the Con­ser­va­tive gov­ern­ment that made the de­ci­sion.

“Ar­ti­cle 1102 of the NAFTA re­quires that Canada pro­vide to in­vestors or in­vest­ments of the other NAFTA Par­ties treat­ment that is ‘no less favourable’ than it pro­vides to its own,” the 22page no­tice doc­u­ment states.

“Through the steps it has taken to un­der­cut the (the rail line) and its mar­ket po­si­tion rel­a­tive to Cana­dian-owned rail­ways, the Gov­ern­ment of Canada has de facto dis­crim­i­nated against Om­ni­trax to the ben­e­fit of its Cana­dian com­peti­tors, so as to pro­vide Om­ni­trax with treat­ment less favourable than that ac­corded to Cana­dian-owned en­ter­prises in like cir­cum­stances.”

Om­ni­trax said it hoped to re­solve the stand­off am­i­ca­bly, but also said it might file a law­suit for $150 mil­lion if no agree­ment is reached.

The fed­eral gov­ern­ment, which has threat­ened to sue Om­ni­trax for fail­ing to main­tain the rail line, re­sponded Tues­day by say­ing the com­pany re­ceived $18.8 mil­lion in fed­eral sub­si­dies a decade ago on the con­di­tion it keep the rail line op­er­a­tional.

“As the pri­vate owner of the line, Om­ni­trax had the obli­ga­tion to re­pair the rail line when it was dam­aged and it is ir­re­spon­si­ble that they have not com­menced re­pairs,” said a writ­ten state­ment from the of­fice of Trans­port Min­is­ter Marc Garneau.

Om­ni­trax has said it can­not af­ford the es­ti­mated $43 mil­lion to fix the rail line.

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