Federal government set to sue Omnitrax over broken rail line to Churchill

The federal government says it's moving ahead on a threat to sue Omnitrax over the broken rail line to the town of Churchill, Man.

Company had 30 days to repair rail line that brings affordable food to community

The Hudson Bay Railway, which is owned and operated by Denver-based company Omnitrax, has been shut down since May when severe flooding overtook the line from Gillam to Churchill. (Omnitrax)

The federal government says it's planning to make good on a promise to sue the owner of an inoperable railway to the town of Churchill after the company failed to meet a 30-day deadline to fix the lifeline to the northern Manitoba community. 

Sunday marked 30 days since Transport Canada threatened to sue Omnitrax, the Denver-based company that owns and operates the Hudson Bay Railway, which has been shut down since May when severe flooding overtook the line from Gillam to Churchill. 

"We're really just at a loss for words," said Ashley Watts, a Churchill mother who is working two jobs as the price of food has soared in the community.

"We just thought something, our governments would have helped us out and Omnitrax would be gone by now and stuff would be happening. I was sure of it anyhow."

Federal Transport Minister Marc Garneau's office confirmed it is getting ready to move ahead with a lawsuit against Denver-based Omnitrax. (The Canadian Press)

Omnitrax, which has previously said it won't pay to repair the rail line, has failed to notify the government about any repairs over the last 30 days, said Mélany Gauvin, a communications adviser for Transport Minister Marc Garneau.

Prices in town continue to skyrocket

The government said the company has breached a 2008 contract Omnitrax signed with the province and the federal government that made it responsible for the operation and repair of the rail line until October 2018.

In 2008, the federal and provincial governments each gave $20 million to the company, which was also expected to put in $20 million, to upgrade the railroad.

The rail line's closure has forced the town, located about 1,000 kilometres north of Winnipeg, to rely on air service — sending the cost of basic living skyrocketing, and leaving some residents unable to afford the cost of a plane ticket out.

Gas prices alone have risen by 30 per cent in the community in recent weeks.

"The prices are ridiculous," Watts said adding she spent $130 for just two bags of groceries Sunday.

Churchill mayor Mike Spence continues to call on the feds and province to intervene. (CBC News)

Churchill Mayor Mike Spence said food prices continue to be affected and layoffs have hurt the town. He continues to call on the federal government and province to intervene.

"As we have stated from the outset, the current owner has refused to live up to their obligations and we expect swift action from governments," Spence said in an emailed statement.

Garneau's office said the government's chief negotiator Wayne Wouters continues to have ongoing negotiations with Omnitrax, potential buyers of the railway, community leaders and the province of Manitoba.

'They just need to get over themselves'

"We are optimistic that interested buyers can develop a viable, sustainable business plan towards owning and operating the line," Gauvin wrote in a statement. 

Watts is fed up with talk and wants to see action taken. "They just need to get over themselves."

"It's just been ridiculous the last couple of months with 'OK we'll put out a news update' and then they'll put one out. It's just been back and forth and nothing's really happened."

Garneau was in India on a trade mission and wasn't available for an interview Sunday.

CBC News reached out to Omnitrax for comment, but a spokesperson for the company said no one was available for an interview.

The federal government says it's planning to make good on a promise to sue the owner of an inoperable railway to the town of Churchill after the company failed to meet a 30-day deadline to fix the lifeline to the northern Manitoba community. 1:42

About the Author

Austin Grabish

Reporter

​Austin Grabish is a reporter for CBC News in Winnipeg​ where he files for TV, web and radio. ​​Born and raised in Manitoba, Austin has had an itch for news since he was young. He landed his first byline when he was just 18. Before joining CBC, he reported for several outlets with work running across the country. He studied human rights in university and holds both a degree and diploma in communications.​ Connect with him here: austin.grabish@cbc.ca