Competing groups join forces to buy rail line and Port of Churchill

A nagging disagreement over who might buy the Port of Churchill and the damaged rail line to it has ended after two competing parties agree to merge.

Merger puts pressure on Ottawa to act before winter sets in

The Port of Churchill is Canada's only rail-accessible deepwater port on Arctic waters. (CBC)

 A nagging disagreement over who might buy the Port of Churchill and the damaged rail line to it has ended after two competing parties agreed to merge, putting pressure on the federal government to act on repairs to the line before winter.

In a letter to Prime Minister Justin Trudeau's office, obtained by CBC News, Grand Chief Arlen Dumas (acting as a representative of Missinippi Rail LP) said he will no longer pursue ownership of the facilities, and will work with other parties to buy the northern assets of U.S.-based Omnitrax.

Dumas was chief of the Mathias Colomb First Nation in June when he signed an agreement with Omnitrax to buy the port, rail and marine tank farm for $20 million. He was elected grand chief of the Assembly of Manitoba Chiefs in July.

The letter to the PMO was also signed by Chief Christian Sinclair of the Opaskwayak Cree Nation and Mike Spence, the mayor of Churchill. They led the second set of stakeholders, called One North. 

"It's got to be a mutually combined business model that will work for everybody's interests," Sinclair said, adding his understanding is Ottawa is ready to go with some form of a plan, but details have to be worked out. 

Federal Natural Resource Minister Jim Carr released a statement on Friday saying Ottawa has put Omnitrax on notice that the company is responsible to pay for the repairs.

"OmniTRAX Inc. has legal obligations to repair the rail line and its tracks," the release said. 

The government release went on to say they have "formally demanded" the Hudson Bay Railway Company repair the rail line as part of a 2008 agreement with the federal government. They said the agreement "requires the company to operate, maintain and repair the entire Hudson Bay Railway Line in a diligent and timely manner until March 31, 2029."

Omnitrax staff have called the rail line "a public utility," and say they can't afford to pay for the repairs.

Clock is ticking

Residents of Churchill have been without rail service since late May when floods caused damage to the line, estimated anywhere between $20 million and $60 million. Food prices have soared and locals have grown increasingly worried about the future of the town and whether they can afford to stay.

An early September start to repairs on the line is thought to be crucial if the work is to be completed before winter sets in.

Sinclair said time is critical and he can be in Winnipeg "within hours" to sign what is necessary to move ahead.

Spence, who co-chairs One North with Sinclair, said even though "time is running out, we are in a good position," adding the real action now must happen between the federal government and Omnitrax.

"That deal needs to be closed off between the feds and Omnitrax. And once that's happened, then it's our turn," Spence told CBC News.

On Friday Manitoba Premier Brian Pallister made vague commitments about economic development in the region with an announcement of $500 million over the next decade.

In an email Omnitrax said they are "in regular contact with Chief Dumas and were very pleased to hear that he has come together in partnership with other northern First Nations stakeholders."

The email also said Omnitrax has been talking with the federal government "to support the return of safe and reliable service to the [affected] communities … as expeditiously as possible."

Requests for comment have been sent to the Prime Minister's Office.