American ownership of part of Canada’s transportation system doesn’t bother agriculture minister Ralph Goodale.
CN Rail has sold the rail line serving the port of Churchill to OmniTrax, a U.S. firm that manages 11 short-line companies in the U.S. The company is also negotiating for the purchase of the port facilities at Churchill.
Some Canadian nationalist groups, as well as the National Farmers Union, have condemned the deal. They say it represents a loss of national sovereignty, and warn there is no guarantee the company will operate the rail line or the port in the interests of Canada.
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Giving up ports
“Giving up control of a port is not a desirable situation to be in,” NFU vice-president Chris Tait said last week. “There are few countries in the world that would make this kind of a decision.”
But Goodale said he doesn’t think foreign ownership of the rail line and port poses any threat to national sovereignty.
“Clearly, being a Canadian, I would by far prefer always to do business with Canadians first,” he said in an interview. “But when that’s not possible … I think we need to be open and aggressive in dealing with the world.”
Nor does Goodale foresee U.S. ownership creating any operational or logistical problems that might affect the continued export of prairie grain through the Hudson Bay port.
Tait disagrees, saying OmniTrax could come under pressure from the U.S. government to do certain things, like refusing to load vessels bound for a country like Cuba.
The NFU says if the government wasn’t willing to sell the rail line and port to a Canadian group, it should have continued to operate the line on behalf of the Canadian public.
There may not be much grain moving through the port now and it may be losing money, said Tait, but that may not always hold true.
“Trade patterns change,” he said. “(Churchill) is an asset that the government should have held on to for strategic reasons, as well as the fact that in the end it could make very good economic sense for the government to own the port.”
Goodale said the bid from OmniTrax made the most economic sense. While he wasn’t directly involved in the negotiations, he added, it’s his understanding that proposals from Canadian groups involved government subsidies.
“The Canadian proponents really were suggesting pretty high levels of capital contributions at the outset in the form of government or public money and then perhaps even ongoing forms of subsidization,” he said. “The proposal that has been accepted virtually stands on its own.”
Tait said the NFU wants answers to a number of questions about the deal, such as the sale price of the line, whether Ottawa made any commitments to spend public money on rail upgrading and whether there are any guarantees for the long-term future of the line.
Larry Maguire, president of the Western Canadian Wheat Growers Association, said he has no particular concern about the sale of the line to an American firm.
“I guess we have a lot of foreign ownership coming into the grain business and it makes sense that we try to have more competition in the rail sector than we do today,” he said.
The wheat growers have always said that grain should move through Churchill only if it provides the best return for farmers.
