Feds put up $132K to bring steep gas prices down in Churchill

The federal government has committed $132,870 from its Churchill and Region Economic Development Fund to help bring down gasoline shipping, distribution and storage costs in the northern Manitoba town.

Debate over damaged rail line continues as remote northern town gets funds to help subsidize high gas costs

Churchill, Man., residents have faced major fuel price hikes while a dispute to repair the damaged rail line to the isolated community continues. (CBC)

Churchill residents may soon save some money at the pump thanks to funds from the federal government meant to bring sky-high gas prices down in the northern Manitoba community.

Its roughly 900 residents have been stuck with big fuel bills since a spring flood washed out the only rail line to the remote town on the coast of Hudson Bay last year. That disrupted fuel shipments and drove up food prices and operation costs for local businesses, which were forced to bring gasoline and supplies in by air or sea.

Natural Resources Minister Jim Carr announced Friday the federal government will give Exchange Petroleum $133,000 through the federal Churchill and Region Economic Development Fund in order to subsidize fuel shipment costs until the rail line is prepared.

"The Government of Canada is committed to ensuring the economic and social well-being of the residents of Churchill," Carr said in a statement. 

"This funding will provide much-needed support to Churchill residents and businesses during this difficult time."

The funds are expected to allow Exchange Petroleum to bring the price of gasoline back down to around the pre-disruption levels, company president Gary Bell said.

"Now, thanks to this funding, the price will not be negatively affected," Bell said in a statement.

The federal government and Denver-based Omnitrax, which owns the rail line and associated deep sea port, have been in a months-long debate over who should cover the rail line repair costs.

The federal government later sued Omnitrax $18 million for violating terms of an agreement signed 10 years ago that saw federal and provincial governments commit $20 million each to help update the railway.

The Manitoba NDP also filed a complaint against Omnitrax with the Canadian Transportation Agency — a federal regulator that has the power to order companies to make repairs.

NDP Leader Wab Kinew said party members pushed Omnitrax to live up to its obligations to the north at a confidential hearing of the transportation agency on Thursday, but the agency reserved its decision. It is expected to release that decision in the coming weeks.

"We brought forward a complaint that could force them to make the repairs needed to the line," Kinew said in a statement, adding he feels the province is also shirking its responsibility.

"It's time [Premier Brian] Pallister focused on the needs of northern Manitobans and [joined] us in our fight to make sure communities will be able to survive today and into the future."

Jason Denbow, executive director of the economic development association Community Futures Manitoba, said the funding is a positive example of what can be achieved by working together.

"This project is a great example of how collaboration and partnerships can help lessen Churchill's acute economic hardships, restore quality of life, and keep its entrepreneurs in business," Denbow said in a statement.

"We look forward to continuing to work with the people of Churchill as they address this crisis."

"We commend the federal government for following our government's lead," said Infrastructure Minister Ron Schuler in an emailed statement, noting the provincial government sent $6 million of propane to Churchill to last through the winter. 

Schuler also said the province is encouraging the federal government to resolve its legal issues with Omitrax. 

"That's what real leadership looks like: providing timely support for Churchill instead of grandstanding in the hope of receiving favourable headlines."