$9 per tonne | Subsidies offered on a first-come, first-serve basis to shippers
TISDALE, Sask. — The federal government has released details of a five-year, $25 million program aimed at boosting the amount of grain shipped through the Port of Churchill in northern Manitoba.
Beginning this year, the Churchill Port Utilization Program (CPUP) will offer a shipping subsidy of $9 per tonne to grain companies that ship grain, oilseeds, pulses and special crops through the port.
The subsidies will be offered on a first-come, first-served basis with $5 million available each year for the next five years.
Eligible grains include wheat, barley, durum, beans, buckwheat, canola, chickpeas, corn, flax, lentils, mustard, oats, peas, rye, safflower, sunflower and triticale.
Soybeans and fababeans do not qualify. The program expires March 31, 2017.
Federal agriculture minister Gerry Ritz shared details of the program last week during the Hudson Bay Route Association’s annual general meeting in Tisdale, Sask.
He said changes to the CWB and Western Canada’s grain marketing environment will affect the port’s grain-related business.
The Port of Churchill normally handles 500,000 to 550,000 tonnes of grain each year. Of that amount, 90 to 95 percent is wheat, durum or barley shipped to overseas buyers by the CWB.
CWB exports moving through Canadian ports could drop significantly when the agency loses its single desk marketing powers Aug. 1.
“There needs to be a transition period to help (Churchill) recapture opportunities that come with an open market,” Ritz said.
“The goal (of CPUP) is to maintain historical levels of grain shipped through the port during the transition to a new grain marketing model here in Western Canada.”
Jeff McEachern, executive director of the Churchill Gateway Development Corp. (CGDC), said it is still too early to predict how CWB changes will affect grain export volumes at the port.
The CGDC has been talking with groups to determine how negative effects on port business can be minimized.
“We’re looking at a number of creative solutions to ensure that grain is going to continue to move through the port, whether it’s adding facilities of our own, inland, to store and gather grain and move it up (to port) or commercial agreements that we’re in the midst of making with grain companies throughout the country,” McEachern said.
“It’s hard to predict (the impact on total grain volumes) at this point because the shipping incentive has just been finalized and that’s had a big impact on discussions with respect to commercial agreements. When that (incentive) filters into the marketplace and people begin to understand the impact that it will have on their business, then we’ll be able to start making forecasts on grain volumes.”
The CWB has argued for years that shipping grain through the Port of Churchill reduces freight costs and results in higher returns for grain growers.
Paul Stow, a vice-president in charge of grain-related business with OmniTrax Canada, said grain originating in Tisdale, Sask., can be shipped by rail to Churchill for $29 per tonne.
The same grain could be shipped to Thunder Bay for $35.50 per tonne or to Vancouver for $45.10 per tonne.
For grain originating in Saskatoon, rail freight rates are $32.75 to Churchill, $35.35 to Thunder Bay and $36.80 to Vancouver, he said.
OmniTrax Canada owns the grain export terminal at the Port of Churchill and the only rail line leading to the port.
For more details on the Churchill Port Utilization Program, visit www.agr.gc.ca/cpup.