Tuesday, June 19, 2018

Canadian indigenous groups and others purchase Hudson's Bay railway

A tentative deal has been reached to bring both the port of Churchill and the rail line from the port on Hudson's Bay south to the Pas back under Canadian ownership after the US company Omnitrax refused to repair flooded and damaged tracks.

Indigenous groups and others involved in the deal
The Canadian federal government announced that a number of First Nations many of whom depend on the rail line and also groups representing northern communities, One North and Missinippi LP, have joined up with Fairfax Financial Holdings to purchase the port and railway from Omnitrax. Fairfax, an investment company based in Toronto had announced back in November 2017 their intent to try along with others to purchase the railroad There are 30 First Nations and 11 communities in northern Manitoba as well as others participating in the project.
Specifics of the deal have such as financing, and a timeline have not been announced.
Omnitrax owner Pat Broe and Fairfax president Paul Rivett negotiated the agreement but a number of legal issues need to be completed before the deal is finalized.
Churchill Mayor Mike Spence calls the agreement historic
Spence said: "This is an historic partnership involving Indigenous and northern communities with industry leaders that now positions the Port of Churchill as an Arctic gateway for future prosperity...Priority No. 1 will be rail line repairs in the very near future and to finalize the acquisition." Spence is also co-chair of One North. Spence has been lobbying to purchase the port and rail system from Omnitrax since the US company began cutting service to his community almost two years ago.
Jim Carr Manitoba Natural Resources Minister said: "The people of northern Manitoba have long understood the value of the rail line. This agreement in principle allows those most affected to have a direct stake in the future and long-term interests of their communities."
Christian Sinclair, Chief of "Bold investments into much needed infrastructure will create long-term socioeconomic growth for the North. We see immediate opportunities to support the success and growth of the business, creating opportunities for OCN and for all of our partners in northern Manitoba."
Lack of a rail line isolates Churchill
The lack of a rail line has created great hardships for the eight to nine hundred inhabitants of Churchill. Omnitrax shut down both the port and major railroad operations in August of 2016. It continued to bring goods and passengers until the damaging floods in May of 2017. The company has not repaired the line and insists it has not the money to repair it.
The only way out of the town is by air which is very expensive. A return flight to the Manitoba capital city Winnipeg is about $1,200. The town attracts some tourists in winter to see polar bears which are common in the area- as shown in the appended video- and also to see fantastic displays of northern lights. However, tourist numbers have dwindled drastically since the rail link to the south has been closed. There are no roads into the town connecting them to the south. The costs of basic foodstuffs has also skyrocketed. Many are leaving the town.
Omnitrax taken to court by federal government
After Omnitrax refused to repair the tracks last year, the Canadian government took Omnitrax to court. Omnitrax says it simply cannot pay up to $60 million to repair the line. However, a consultant puts the cost at more like $43.5 million. The federal government has offered subsidies to northern residents to help with rising costs to those affected by the rail closure.
At least now, the railway and port will be owned by those in communities served by the railway and are interested in seeing that it does not shut down as it did before because it was no longer profitable for a large US corporation Omnitrax.
Previously published in Digital Journal

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