Politicians in northern Manitoba were caught off guard this week by news that grain exports through the northern Port of Churchill would be suspended as of Aug. 8, says Churchill’s top elected official.
Mike Spence, mayor of Churchill, Man., said there was no forewarning that grain shipments would be suspended.
“There was no communication from (port owner) OmniTrax at all on this decision,” Spence said today in an interview with The Western Producer.
“It was an employee from the port who came by with a letter that he had received.”
Western Producer attempts to reach OmniTrax Canada officials were unsuccessful today, but media reports say as many as 30 port employees in Churchill received two-week layoff notices yesterday.
After learning of the layoffs, Spence spoke with a port official who confirmed that grain shipments through the northern Manitoba port would be suspended.
Shipments of other products through the port will not be affected, and the railway that services the port — originating near The Pas, Man. — will remain open to carry passengers and other essential supplies.
Officials with the Hudson Bay Route Association told the Winnipeg Free Press that 50 grain cars in The Pas that were initially destined for Churchill would be turned around and shipped through an alternative route.
Eldon Boon, president of the Hudson Bay Route Association, told Commodity News Service Canada that the closure of grain operations at the port came as a surprise.
“Blindsided is a good way of putting it,” Boon told a reporter with Commodity News Service Canada.
“It’s really confusing. It just snowballed down the rail line, so to speak.”
OmniTrax, the Denver-based company that owns the port and the railway that serves it, gave no inclination of the closure, he added.
HBRA was in communications with Omnitrax no more than a few weeks ago.
“It was business as usual.… They had some potential customers that were going to utilize the port and were working toward shipments, so we were not expecting this what-so-ever,” Boon said.
There are currently no grain ships anchored in the port.
Spence said news of layoffs and suspended grain exports is a tough pill to swallow for the community of Churchill.
The port is the town’s largest single employer, hiring roughly 90 workers at full capacity.
The closure will reduce the port’s workforce by roughly a third, but the implications will be felt throughout the town and northern Manitoba, Spence said.
“It’s more than (30 layoffs). It’s also the people that haven’t been called back that were on the call-back list and this is not including the rail system that feeds the port operations,” he said.
“There’s people there that haven’t been called back as well, so when you look at it, this is a huge, significant blow, not only to Churchill but also from The Pas to Churchill.”
Western Canadian farmers are anticipating a near–record harvest this year, which makes the decision to close the port’s grain facility even more baffling, Spence added.
“From what we’re being told … there could be a record harvest throughout the whole system … so this is totally … unreal to hear that you’re going to shut the port down and yet it could be one of your best years. It make no sense at all, no business sense at all.”
OmniTrax spokesperson Ron Margulis told CNS that the company would not comment on the layoffs, but said additional information would be released in the near future.
Grain shipments through the Port of Churchill were down significantly in 2015.
The port exported approximately 184,000 tonnes of grain last year, down from normal levels of 500,000 tonnes or more.
OmniTrax has been in negotiations to sell its transportation assets in northern Manitoba, but so far no deal has been reached.
A federal shipping subsidy that paid grain shippers approximately $9 for every tonne of grain shipped through the port was implemented by Ottawa in 2012 to help the port cope with reduced grain handling volumes that coincided with the elimination of the Canadian Wheat Board’s single-desk marketing mandate.
That subsidy was originally due to expire in mid 2017.