Federal program Subsidies will increase by 20 cents per tonne on eligible products shipped from the port
A federal program aimed at increasing grain traffic through the Port of Churchill in northern Manitoba will offer bigger financial incentives to shipping companies this year.
Shipping subsidies offered through the Port of Churchill Utilization Program (PCUP) will increase to $9.20 per tonne in the 2013-14 crop year, up from $9 per tonne in 2012-13.
The PCUP is a five-year, $25 million program aimed at enticing grain companies to use the Arctic port.
It offers per-tonne shipping subsidies to companies that ship grain, oilseeds, pulses and special crops through the port.
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The list of eligible products has also been expanded this year to include faba beans, soybeans, canola meal and pellets.
Subsidies are offered on a first-come, first-served basis, with $5 million available each year until March 31, 2017.
Ottawa introduced the PCUP in April 2012 following suggestions that the elimination of single desk grain marketing would have a devastating impact on the northern port’s financial viability.
Before deregulation, the Canadian Wheat Board was the biggest grain shipper at the port.
Until last year, wheat board grain typically accounted for 90 to 95 percent of all grain shipped through Churchill.
Documents posted on Agriculture Canada’s website suggest that Richardson International is now the biggest grain shipper at the port.
In 2012-13, Richardson, Canada’s largest grain handling company, secured conditional PCUP funding of more $3.75 million, compared to CWB’s $1.57 million.
All told, the PCUP approved conditional payments of more than $5.5 million.
Officials from Agriculture Canada say actual payments will come in well under the $5.5 million.
In total, PCUP subsidies will be closer to $3.9 million.
Companies that apply for PCUP grants secure conditional funding based on eligible sales contracts.
However, conditional funding is adjusted if actual shipping volumes fall short of a company’s projections.
Adjustments in 2012 amounted to more than $1.6 million.
Improvements completed at Churchill during the past year are expected to extend the port’s lifespan and improve operating efficiency.
Among other things, cleaning capacity at the port has increased to 660 metric tonnes per hour.
