Alex Binkley on suprise Churchill closure

The Binkley Report

Alex Binkley is a foremost political and economic analyst, whose website is www.alexbinkley.com. Readers will be aware that his columns in True North Perspective have foreseen political and economic developments in Canada. In this edition ...

Churchill closure catches governments and business by surprise

By Alex Binkley
True North Perspective

Image: Cover of Humanity's Saving Grace, a novel by Alex Binkley. Click to purchase at Amazon.caAn unexpected announcement by American shortline operator OmniTrax in early August to immediately close the Port of Churchill produced plenty of hand-wringing by governments but no plans to resume grain shipments through it.

“I am deeply disappointed by OmniTrax’s decision to issue layoff notices to its employees,” Regional Development Minister Navdeep Bains said in a statement. He was assigned lead minister on the file over Transport Minister Marc Garneau. “I am in ongoing discussions with my cabinet colleagues and local leaders. I will continue to monitor the situation closely.”

The comments from Manitoba Premier Brian Pallister were similar. “Direct communications with OmniTrax haven't been established in recent days. Every relationship has its challenges and some have mysteries, too.” Pallister is a former Conservative caucus mate of Merv Tweed, who left federal politics several years ago to head of OmniTrax’s Canadian operations.

There has been no comment yet from Tweed or Denver-based OmniTrax although it says an explanation will be provided in due course.

The former Chretien government sold the port and the rail line to the company in 1997.

The port struggled in recent years as shipments dropped. Last year, it handled only 184,000 tonnes of grain compared to the 500,000 to 700,000 tonnes expected.

The former NDP provincial government provided a $3 a tonne grain subsidy last year and a group of local First Nations expressed an interest last December in buying the operation. The premier says no significant positive movement on that proposal has happened since.

Omnitrax had a promise from the former provincial government to cover all operating losses.

Pallister, whose Progressive Conservatives were elected April 19, said his government would not agree to bailouts for the Port, which have been estimated at between $800,000 and $1 million a year.

“The agreement that the provincial government entered into last year was nothing more than a subsidy bailout, done as a consequence of a threat,” Pallister told reporters. “And now that threat is being repeated this year. And I want to be very, very clear that I don’t respond ever to threats.” Legal disclosure rules prevented him from sharing details about the agreement.

“The approaches that have been taken too often in the past have been alarmist and crisis in orientation, and that is not the nature of how we are going to build a stronger northern economy and stronger communities.”

The Port employed about 10% of the northern community’s population.

Keystone Agricultural Producers, Manitoba’s largest general farm organization, and Niki Ashton, the NDP MP for Churchill, called on the federal government to keep the Port operating at least until the end of the 2016 shipping season.

“This is a major blow to us, especially when there appears to be an exceptionally large crop coming,” said KAP President Dan Mazier. “The last time we had a large crop, grain movement through the port was up 50% over the previous year.

“We’ve had so many issues shipping our grain east and west to port, and this was an excellent option. If ever there was a case for government intervention, this is it,” he said. “We don’t want to lose this facility permanently, and the longer it stays shut, the more possible that scenario becomes.”

Ashton said the government should take over the Port and the rail line to it from The Pas. Train service was reduced to once a week from the current twice. The 1,300-kilometre Hudson Bay Railway brings food, goods and people to many northern communities including a handful that are not accessible by road.


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