Last week’s news about a different group of First Nations and a private company announcing that they had an agreement to acquire the Hudson Bay Railway and the Port of Churchill was certainly a legitimate news story, but you can probably forgive nearly everybody involved if they looked at the headline and said, “I’ve heard that before.”
Because they have.
It’s been more than two years since railway and port owner OmniTrax announced that it had plans to sell its Northern Manitoba assets. Within about a month or so of that announcement, the company said it had received a letter of intent from a group of Northern Manitoba First Nations to purchase those assets.
That was 26 months ago, and things have only gone from bad to worse in the interim. Perhaps in an effort to motivate some action to take place, OmniTrax suspended grain shipping operations from the Port of Churchill in the summer of 2016 and then, last year, announced that, due to damage from flooding, rail service was being suspended north of Gillam to Churchill because the company says it doesn’t have the money to fix it, which it has estimated to be a $40 to $60 million repair job. Then again, it’s entirely possible that the operations are just losing money and the owners decided it made more fiscal sense to shut them down instead of continuing to throw good money after bad.
Whether or not it was a good idea for the federal government to sell the Port of Churchill and for CN, which itself had been privatized in 1995, to sell the Hudson Bay Railway to OmniTrax in 1997 is obviously debatable in hindsight, and people in Churchill and other Northern Manitoba communities whose only land transportation link is by rail would doubtless regard it as a disaster of monumental proportions. But it is a fait accompli and the only way to change it now is for some other entity to purchase the railway and port from OmniTrax, or for the federal government to launch some sort or renationalization process and, as long as the former has taken, it might be the quicker route to restoring rail service to the shores of Hudson Bay.
It seems quite likely that OmniTrax would quite willingly part with the port and the railway if somebody would offer it the right price, given that, at this point, they are more of a headache for the owner than anything. And while they claim to be negotiating possible sales with a number of interested buyers, the problem likely lies in the fact that the people who want to buy the port and railway don’t have money and the people who have money don’t want to buy the port and railway, at least not at the price that OmniTrax is asking.
And, if you’re being honest, why would they? As important as the Hudson Bay Railway and port are to the town of Churchill, at this point the port has no grain-shipping customers or contracts, and merely shipping supplies and passengers to Churchill is not likely immensely profitable, or even profitable at all. If anything, shutting down grain shipping at the Port of Churchill has probably made it more difficult for OmniTrax to sell its Northern Manitoba assets, as has the suspension of rail service to Churchill for nearly a year now. It’s little wonder that they are negotiating the sale with as many parties as possible, because they probably hope that it will light a fire under one of them and hopefully drum up some funding from somewhere (most likely the government, though neither the provincial Progressive Conservatives or the federal Liberals have shown much, if any, interest in putting money into an operation almost guaranteed to lose it). But to be honest, there isn’t much point in doing so unless someone comes up with a plan for the railway to become somehow self-sustaining, or this situation will simply play itself out again a few years down the line.
Following last week’s announcement, it has been reported that Fairfax Financial Holdings and another group of Manitoba First Nations are expected to have a deal to purchase the Hudson Bay Railway and the Port of Churchill from OmniTrax within days. The people affected will certainly be watching expectantly, but not likely holding their breath.
