WINNIPEG, Manitoba — The governments of Canada and the province of Manitoba will invest C$147.8 million to upgrade the Hudson Bay Railway, the only year-round ground transportation link to the isolated community of Churchill, Man., which is also Canada’s lone arctic port.
The Canadian Press reports the new funds are in addition to the C$157 million in support from the Canadian government since 2018 to help a consortium led by First Nation groups, the Arctic Gateway Group, purchase the railway and the Port of Churchill from short line company OmniTrax and return it to service. OmniTrax had shut the line down in 2017 because of flood damage, leaving Churchill reliant on air transportation for basic goods.
That also halted the VIA Rail Canada service to Churchill that uses the railway.
Funds will be used to improve the rail infrastructure, increasing track speed and the reliability of service.
The Winnipeg Free Press reports Manitoba Premier Heather Stefanson said the government funding — half from the federal government, and half from the province — is a sound investment. “We know that this creates significant economic opportunities for Manitoba,” she said, noting the potential for more shipping from the Port of Churchill.
The big problem with Churchill is that it is only open three months a year due to ice in the shipping route there.
An advantage of global warming?
Yes, there has been some talk that Churchill will become more strategic due to the shrinking of the ice season.
Money well spent, vital transportation link. A lot of grain export out of Churchill in years gone by.
Don’t be surprised if we see petroleum product export out of Churchill some day soon due to lack of pipeline capacity or will to build.
The CBC article on the deal suggested containers and hydrogen as well. Hydrogen would be an easier sell than petroleum; if there’s a leak it just evaporates.
It’s economically necessary for the mostly First Nations people who live in the remote interior of Manitoba. Whether it turns a profit really isn’t the point.
Maybe OMBITrax was only going to do a 1 year band-aid?
Omnitrax was only in Canada to milk the subsidies. No interest in improving the line or attracting business.
I will counter that. The line was not producing adequate return. OMNITrax had no control over what happened at the Port of Churchill. They were simply given state mandates on what had to be provided. Like rural passenger service.
A large storm washed out an important, but remote section of the ROW. Even though OMNITrax was not getting anything close to a return on the line, they were scheduling a crew to reach the impacted area before the next freeze set in. The repairs were temporary until the following season when they could get a real construction crew in place to make it right.
Churchill and Manitoba howled at the delays in getting the service restored. So the Canadian Govt. asked OMNITrax how much it would take to fix the issues at the washout. They said $7m. How much would it take to fix everything? $14 million. The Canadians howled and said there was no way they were giving OMNITrax that much money to fix anything.
OMNITrax withdrew from the contract shortly after. The line made no money and the govts were not up for it. (or so we thought)
Immediately after they withdrew the Canadian Govt. announced that a consortium of Canadian companies were going to get an exclusive concession to not only run the railroad, but also get the entire Port of Churchill as well. The Parliament opened their wallets and provided $157m in subsidies to the consortium to get everything working again.
It’s 4 years later and its still not working very well. So more dough from the coffers to prop up the consortium.
Was OMNITrax looking for a handout? Only as it related to certain mandates from the government. Did they have interest in getting business to the line? Of course they did, they wanted to make money but they didn’t control all the components of business development. The government did. When the line washed out, they simply decided they wanted OMNITrax out too.
Not sure about that John, from one source,
“Denver-based Omnitrax refused to repair the tracks, saying it couldn’t afford the cost and had been trying to sell the northern port and rail line.
The company estimated the cost of repairs at between $40 million and $60 million”
From another source, the company said it would cost $43 milllion.
IMHO, Omnitrax seen a deal and a way to make a quick buck without fully understanding what they were getting themselves into, the line to Churchill runs through some pretty inhospitable terrain with absolutely no road access so very costly to maintain or repair.
And on top of that, the northern part of the line has been in a declined state of repair for many years requiring very light wheel loading.
They tried using articulated grain hoppers years ago to spread the load out but as with a lot of specialized rolling stock their use does not fit into the grand scheme of things.
OMNITrax refused to repair the tracks to their full working condition without government assistance. They were going to put in a temporary fix due to the upcoming freeze season.
As for the state of repair of the northern reach, yes it was in bad shape and one of the reasons the consortium needs more money.
As for bad decisioning within OMNITrax, I concur, they didn’t know what they were getting into.
“We know that this creates significant economic opportunities for Manitoba,” she said, noting the potential for more shipping from the Port of Churchill.”
Interesting in that OMNITrax only asked for $14 million.
Canada and Manitoba are up to $300 million plus.
Yep, First Nations has a little more political pull in Canada then OMNITrax. Wonder how much of the $300 million becomes pass through and what remains for the contractors who will perform the work.
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That being said, it does make some strategic sense for the state being Canada & Manitoba to keep this vital infrastructure to Hudson Bay only deepwater port, I believe, intact even though it will probably decades before it becomes economically viable.