The grain transportation subsidy was introduced in 2012 to bolster shipments through the port; it’s set to expire in 2017
The feasibility of operating a railway in northern Manitoba may need to be re-evaluated unless senior levels of government offer ongoing financial assistance, says the top executive with OmniTrax Canada.
OTC president Merv Tweed said he is optimistic about his company’s prospects in northern Manitoba.
However, the expiry of a $9 per tonne grain shipping subsidy in 2017 will have a significant impact on the company’s operations, he added.
OmniTrax owns the Port of Churchill and the Hudson Bay Railway, which originates in The Pas, Man., about 1,000 kilometres away.
“I think it means we have to re-evaluate our position up there and make a decision as we go forward,” said Tweed.
“I’m convinced that the Port of Churchill is important enough to senior levels of government that a subsidy or some form of help will be provided.”
In 2012, the federal government approved a five-year $25 million shipping subsidy known as the Port of Churchill Utilization Program (CPUP).
At the time, Ottawa was preparing to end the single-desk marketing mandate of the Canadian Wheat Board, the port’s most important grain shipper.
The CPUP was intended to bolster grain movements through the northern port in the post single-desk era by offering a $9 per tonne subsidy on every tonne of grain shipped through Churchill.
Tweed said OmniTrax Canada has expressed concerns to government over the looming expiration of the subsidy.
The company seeks an assurance that government assistance may be extended beyond the program deadline.
“We’re preparing a document to release to the (political) parties that would show support for the Port of Churchill and what it means to not only Manitobans but also to Canadians,” Tweed said.
“We have to remind people that yes, we do ship grain up there but the reality is that we also service many northern communities along the railway line and if there’s no grain to move into Churchill, then it certainly makes it more difficult to service those communities.”
The 2015 shipping season has been challenging for OmniTrax Canada.
Last week, the first grain ship of the season began loading at the port.
In a normal year, the first grain ships arrive in early August.
Tweed said OmniTrax Canada was hoping to ship about 500,000 tonnes of grain this year but delays have shortened the shipping window by several weeks.
“It (the arrival of the first grain ship) is later than usual,” Tweed said. “The challenge this year is just the fact that the crop last year was sold off and there wasn’t a lot of product to move early in the season.”
“The outlook is still positive,” he added. “Obviously this year, we’ve had a challenge with grain supply but we’re positive. It can work and I think because of the ancillary benefits to the communities along the line, it has to work.”