Omnitrax has closed its Thompson, Man., office, laying off the three employees who worked there.
In an email statement attributed to Peter Touesnard, chief commercial officer at Omnitrax, the Denver-based company said operations at its affiliate, Omnitrax Canada Freight Services, have been "suspended indefinitely."
Touesnard said that northbound freight volumes out of Thompson have fallen rapidly since the Hudson Bay Railway line to Churchill closed earlier this year.
Three weeks ago, Omnitrax Canada president Merv Tweed told CBC News that the company can't afford to fix the line.
The Hudson Bay Railway has been described as a lifeline between Churchill and the south. Trains typically bring up everything from fresh groceries and pet food to baby diapers and propane gas for heating homes.
Tom Lindsey, NDP labour critic and MLA for Flin Flon, said the closure "sends a clear message that the company no longer wants to do business in Manitoba."
In a release Friday, Lindsey said the provincial government needs to make a long-term plan for Churchill.
"If they have no better solution, it's time for the province and the federal government to expropriate the rail line. Omnitrax has walked away from it, which shows they don't think it has any value. They should not be allowed to hold the people of Churchill hostage to any dithering over the rail line's value," Lindsey said.
Last month, Omnitrax said it had asked both the provincial and federal governments for help fixing the line but both levels have stopped short of making promises.
Five bridges are visibly damaged and 30 more bridges and 600 culverts — structures that allow water to pass under the track — will need to be checked for structural integrity, Omnitrax said.
It has hired an engineering company to assess the damage.
A northern rail company, Keewatin Rail, has offered to fix the line in 45 days for $2 million but Manitoba Infrastructure Minister Blaine Pedersen said Thursday he is waiting for the company's engineering report.
Omnitrax has been operating in Manitoba since 1997. The federal and provincial governments and Omnitrax were partners in the Churchill Gateway Development Corporation, an entity dedicated to researching and developing new markets, but that was wrapped up in 2012.
Omnitrax announced the closure of the Port of Churchill last summer.
The company said freight and shipment transfer services offered by the Omnitrax affiliate will still be offered through a co-operative arrangement involving freight carriers and commercial customers who use the line.