SASKATOON – Last week wasn’t a good one for Dennis Hunter.
The general manager of operations for Manitoba Pool Elevators had the unpleasant task of announcing the closure and impending demolition of one of the company’s two terminals in Thunder Bay, Ont.
“To me, it’s a sad day,” he said in an interview after the April 16 announcement.
The 215,540-tonne capacity terminal known as MPE No. 3 will be closed as of May 31.
Pool officials say there just isn’t enough grain moving through Thunder Bay to justify keeping two terminals open. While the terminal is in “excellent” shape and still capable of handling large volumes of grain, Hunter said, it will likely be torn down.
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The decision wasn’t unexpected, say port officials, who have also seen Saskatchewan Wheat Pool close several terminals in recent years in response to declining volumes.
“We’re concerned and I think disappointed, but not surprised,” said Paul Kennedy, manager of marketing for the Thunder Bay Harbor Commission.
He said there’s no question the remaining terminals can handle all the grain moving through the Lakehead, but any loss of infrastructure at the port is always bad news.
Hunter said Manitoba Pool had no choice but to close one of its facilities, due to a drastic drop in handlings and high property taxes charged by the City of Thunder Bay.
Changes in world grain markets have led to an ever-increasing share of Canadian grain exports being shipped out of west coast ports or directly across the border to the United States.
As a result, the amount of grain received at Manitoba Pool’s two terminals has declined from more than 2.5 million tonnes in the 1990-91 crop year to an expected one million tonnes this year.
Hunter said there’s no reason to expect eastbound grain shipments to rebound and the company’s remaining facility (the 167,460-tonne capacity MPE No. 1) is capable of handling the expected demand.
“If we manage our capacity properly we could handle 1.5 or 1.6 million tonnes through that terminal,” he said.
As for taxes, MPE and the other terminal operators have been at odds with the City of Thunder Bay and Ontario provincial government officials for years about their assessment.
Manitoba Pool’s property tax bill on the two terminals has been around $3 million a year since 1991. During the same period, terminal profits have averaged $3.3 million. This year, the tax bill is around $2.6 million, while terminal earnings will be “very small” said Hunter.
“The taxes are killing us,” he said. “The last few years the only one making money down there is the taxman.”
Hunter said there will be “limited” job loss among the 114 employees now working at the two terminals, since the company will put more shifts on at MPE No. 1 to handle the increased volumes moving through that terminal.
Maintenance jobs hit
Herb Daniher of the Canadian Lakehead Grain Elevator Workers Union said while he expects the operational employees to keep their jobs, he’s worried that a significant number of maintenance jobs could be eliminated.
There are about 500 unionized grain workers at the port, down from a high of around 2,000 in the 1980s.
“I hope the consolidation has ended, but you never know,” he said, adding the terminal workers are worried the new grain export facility planned for Roberts Bank, B.C., in 1999 could take even more grain away from Thunder Bay.
Kennedy said recent comments by the Canadian Wheat Board about good sales prospects in Africa, Europe, South America and the Caribbean are encouraging.
“They’re holding out that there’s going to be significant markets that should be serviced out of the Canada’s East Coast well into the next century,” he said.
The board has projected eastbound exports of seven million tonnes by 2004-05, down from the recent average of around nine million tonnes.
