The federal government is providing $117 million to the new owners of the Hudson Bay Railway, Port of Churchill and Churchill marine tank farm, International Trade Diversification Minister Jim Carr announced in Winnipeg Sept. 14.
The federal funding includes $74 million from Western Economic Diversification for the purchase and repair of the railway and port, which is being provided over three years, from 2018-19 to 2020-21. Another $43 million will be provided over the next 10 years – 2018-19 to 2027-28 – for operations and enhancing the commercial viability of the rail line, port and tank farm. Additionally, the government is providing a $10 million repayable contribution, which will be due 150 days after closing date of the sale so the Arctic Gateway ownership group can obtain a commercial loan. The arrangement specifies that Arctic Gateway – a partnership of Missinippi Rail Limited Partnership and Fairfax Financial Holdings & AGT Limited Partnership – will not provide dividends for 10 years so shareholders don’t get any immediate returns on equity and will reinvest into the operations.
Prior to Arctic Gateway announcing a purchase agreement with the former owner OmniTrax on Aug. 31, the port had not been shipping grain since the summer of 2016 and the Hudson Bay Railway had been shut down between Gillam and Churchill since June 2017 as a result of damage caused by flooding.
“Today’s announcement is about investing in the future of our economy and Indigenous peoples in Canada,” said Prime Minister Justin Trudeau in a news release. “With this funding, Arctic Gateway Group will provide security and economic prosperity to Northern Manitobans and demonstrate the art of the possible when we work together to build a prosperous Canada.”
Repairs have begun on the railway and crews are working seven days a week from sunrise to sunset to attempt to return the railway – Churchill’s only land link to the rest of Manitoba – to operational status by this winter.
“We committed to find a solution to restore the Hudson Bay Rail line and we delivered,” said Carr. “I am happy to say that repairs have begun and all efforts will be made to restore service before winter freeze up. This collaboration has historic significance and we are excited to see the success the future will bring.”
“We know that quality infrastructure is necessary to unleashing the economic potential of a region,” said Innovation, Science and Economic Development Minister Navdeep Bains, whose portfolio includes responsibility for Western Economic Diversification Canada. “The Hudson Bay Railway Line is not only a vital mainland connection for the town of Churchill and surrounding communities, it represents an important transportation and commercial hub for economic prosperity in the region. This is part of laying the foundation for good jobs and growth in Western Canada.”