Feds to Omnitrax: Fix line to Churchill or face suit

WINNIPEG — The federal government has issued an ultimatum to the owners of a broken rail line that has cut off the town of Churchill in northern Manitoba: Fix it within 30 days or face an $18.8-million lawsuit.

The government contends that Denverbased Omnitrax, which bought the rail line from the government in 1997, has a legal obligation to repair and maintain the line, the only land connection to the subarctic community on the coast of Hudson Bay.

Transport Canada points to a 2008 agreement with Omnitrax that included $18.8 million in federal support for repairs and upgrades.

“Notwithstanding that your Sept. 6 letter indicated you would be effecting the necessary repairs to the [rail line], you have since failed to do so, and time is running out with winter’s approach,” reads a letter sent to Omnitrax by Transport Canada on Friday. “As a result of the above, it has become clear to Transport Canada that [the company] is in default of its obligations under … the agreement.”

Omnitrax responded by saying the rail line is no longer economically viable, due largely to such federal actions as the previous Conservative government’s decision to end the Canadian Wheat Board’s monopoly on western wheat and barley. The wheat board used to ship grain along the rail line to the Port of Churchill.