The dispute between the rail company operating on the Hudson Bay line and the federal government is growing amid court claims and threats of international trade complaints.
On Nov. 14 the federal government announced it was suing OmniTrax, the owner of the railway and the Hudson Bay port, for $18 million because the company failed to repair the rail line to Churchill, Man.
This spring, severe flooding washed out several sections of the line between Gillam and Churchill. OmniTrax said repairs would cost as much as US$60 million and it wasn’t prepared to pay without government help.
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Transport Canada said Omni-Trax hasn’t satisfied the terms of a 2008 agreement that requires the company to maintain and repair the entire line “in a diligent and timely manner” until March 31, 2029.
OmniTrax, based in Denver, responded by filing notice that it will submit a claim under the North American Free Trade Agreement. OmniTrax alleged the federal government put it at an unfair advantage when it ended the monopoly of the Canadian Wheat Board in 2012. The CWB had been the one major user of the railway and port.
OmniTrax closed the port in 2016, citing poor shipping volumes.
The legal fight between Omni-Trax and the federal government is worrisome because these battles can drag on for years, said Eldon Boon, president of the Hudson Bay Route Association, a farmer-led advocacy group.
“If we lose another (grain) shipping season that’s a big concern. That’s three (shipping seasons),” he said, noting the port could remain closed in 2018.
Boon said the loss of the CWB affected the Port of Churchill, but what’s really missing is an organization that markets the port to the world.
Ideally, Boon hopes the legal dispute can be put to the side while the port and rail line are transferred to a new owner.
There was also news last week regarding a potential new owner of the port and railway.
The federal government announced that Fairfax Financial Holdings of Toronto might partner with two groups in northern Manitoba to buy the OmniTrax assets.
