A prairie grain handling system devoid of Canadian Wheat Board intervention will see a significant shift in grain movement, says a senior grain industry executive.
And that will spell trouble for the northern Manitoba port of Churchill.
“There will be challenges for Churchill,” Paterson GlobalFoods vice-president Keith Bruch told reporters after he spoke to a recent grain system symposium in Ottawa.
A major problem is that private grain companies own handling terminals in Vancouver and Thunder Bay and will naturally favour shipments through those facilities, including in the eastern catchment basin served by Churchill, he said.
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“There is ownership in Thunder Bay from the shippers,” Bruch said. “You ship to support your assets first and foremost unless the vessel spreads into Churchill are such that you are going to save $10 a tonne or $15 a tonne. That is a problem and without critical mass going through Churchill to make breakeven, there’s going to be challenges.”
It is the argument that Churchill supporters, including local NDP MP Niki Ashton and the Hudson’s Bay Route Association, have been making since the government launched its campaign to kill the board’s single desk.
CWB grain has been 90 percent of Churchill shipments.
Despite Conservative government promises of more than $34 million over five years to support expansion and continued use of the port, supporters have argued that the end of the CWB single desk means the end of the port.
“Price advantage will determine where grain flows,” said Bruch.
Price will indeed be the key for OmniTrax Canada Inc. president Brad Chase, whose company owns the railway to Churchill.
“I agree it will depend on price and in our natural catchment area of northwest Manitoba and northeast Saskatchewan, the cost to move product through Churchill is cheaper,” he said.
“It will depend on what producers are looking for in the long-term, but we intend to make sure that the Churchill choice is viable long-term.”
