Omnitrax not solely to blame

For more than 100 years, the Port of Churchill on Hudson Bay was the gateway to northern Manitoba and communities in Nunavut.

Served by 820 kilometres of railway line from The Pas, Man., it shipped western grain to European markets until the port was stranded, then closed and the hundreds of remote northern communities along the rail line were left isolated as the port and railway’s private owner, Omnitrax, failed to repair the tracks after flooding in early 2016.

Despite the strategic importance of Churchill, North America’s only Arctic deep-water port, the rail line from The Pas was never easy to operate. However, the severe problems stem from two catastrophic blunders made by past Canadian governments.

Liberal Prime Minister Jean Chretien’s government allowed Canadian National Railway, a Class 1 railway, to sell the Churchill line to Omnitrax in 1997 without requiring the new owner to uphold the statutory obligation to move loaded cars to their destination in a timely fashion.

At the same time, the government upgraded Churchill’s port facilities, and then gave them to Omnitrax.

The second blow to Churchill occurred when Conservative Prime Minister Stephen Harper dismantled the farmer-elected board of Canadian Wheat Board in 2011 and ended its single desk selling authority.

Under the CWB’s single desk selling and aggregation advantage, all four ports — Churchill, Vancouver, Prince Rupert and Thunder Bay — were used strategically. Grain grown in the Hudson Bay route catch basin was predominantly marketed through the Port of Churchill by the CWB. This lowered handling and transportation costs and alleviated congestion to the West Coast.

Anticipating Churchill would be in trouble without the CWB’s marketing powers, the Harper government threw private grain companies up to $25 million with a five-year, $9.20 per tonne freight subsidy to help Omnitrax and camouflage the fallout from destroying the CWB. Once the subsidy ended, grain companies quit using Churchill.

The dominos have fallen: the tracks need two decades worth of proper maintenance, farmers are paying higher freight rates, other routes are more congested, there are more greenhouse gas emissions, Churchill is suffering economic losses, and northern communities are cut off from essential services. Dominos will continue to fall as private grain companies avoid Thunder Bay, the next-most-expensive shipping route, further congesting the over-used west coast corridor.

Canada has lost a third of its railway track miles in the last three decades. Rail line abandonment has increased profitability for CN and Canadian Pacific Railway, but their gains should not be seen as an increase in overall efficiency. Farmers pick up the costs by having to truck farther to main line terminals, with triple the greenhouse gas emissions per mile compared with rail transport.

In the 1880s, the public gave private railway companies millions of acres of land, including the mineral rights, in return for agreeing to move freight at regulated rates. CN and CP have become very profitable businesses as a result.

Thus, abandonment of railway lines cannot be simply a rail company’s decision without the public being compensated. Governments have been far too lax in upholding the public interest in this matter. It is time they sharpened the pencil.

As for Churchill, the solution lies not in suing Omnitrax, but in working with northern Manitoba First Nations and nationalizing both the line and the port facilities to restore the Port of Churchill. Climate change will likely make it an even more strategic and commercially attractive port and, and an active port will revitalize the town.

Ian Robson farms grain and cattle with his family at Deleau, Man. He is on the National Farmers Union board of directors.

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