'We can't ignore the potential': Churchill railway deal revitalizes hopes for northern port

News of a deal to sell and repair a Manitoba town's broken rail line means more than just a return to reasonably priced groceries and easier access for visitors to the polar bear capital of Canada.

When railway is rebuilt, it will be the only line in North America linking to an Arctic port

The town of Churchill lost its rail link to the south in late May of 2017. A deal announced Friday means the railway will be repaired. (CBC)

News of a deal to sell and repair a Manitoba town's broken rail line means more than just a return to reasonably priced groceries and easier access for visitors to the polar bear capital of Canada.

It has brought hope that Churchill, the once-bustling port on Hudson Bay, will soon be busy again.

"The future looks bright in terms of that to happen," Churchill Mayor Mike Spence said Saturday, a day after an announcement that the rail line, port facilities and tank farm in Churchill have been sold by Omnitrax.

More than a year after spring flooding in 2017 washed out the community's land link to the south, the assets have been purchased by the Arctic Gateway Group, a private-public partnership of Missinippi Rail Limited Partnership, Toronto-based Fairfax Financial Holdings and AGT Limited Partnership, a news release from the federal government announced late Friday.

AGT is a Regina-based company that specializes in pulses and staple foods, and that has people like Dave Daley, president of Churchill's chamber of commerce, hopeful the company plans to move goods to market from Churchill.

"AGT is huge into agriculture and this is the shortest way to get your stuff to market," Daley said, noting a lot of people in the town were celebrating Friday night.

Port was shut in 2016

The Canadian government sold the port — the community's top employer at the time — and the Hudson Bay rail line to Denver-based Omnitrax in 1997. Citing the elimination of the Canadian Wheat Board in 2012, which dried up grain shipments through the north, the U.S. company shut down the port in 2016.

Then spring flooding in 2017 damaged the rail line and the company said it couldn't afford to fix it. Fuel and food had to be flown into Churchill at skyrocketing costs, creating a huge burden for businesses that cater to tourists who visit Churchill to see polar bears, beluga whales and the northern lights.

Murad Al-Katib, president and CEO of AGT, said the purchase of the line and port assets is an opportunity to develop an Arctic gateway.

"We can't ignore the potential of the only rail link to an Arctic port in North America," Al-Katib said in an interview Saturday.

"That gives the opportunity for this to be a natural resources corridor. And grain happens to be one of the abundant natural resources that we have in Western Canada," he added.

Other routes may be cheaper

Hugh Stephens, an executive fellow with the University of Calgary School of Public Policy who wrote a paper on northern sea routes, has doubts about the financial viability of a northern port like Churchill.

After the dismantling of the Wheat Board, grain was free to move through the cheapest routes, he said.

Climate change may mean a few more days of open water in Churchill, he said, but the change is happening slowly.

"There's many moving parts," Stephens said.

Al-Katib is undaunted. AGT already operates two short-line railways in Saskatchewan and he believes there will be a need for more ports.

"In the next 40 years, the world must produce the same amount of food as we produced in the last 10,000 years of civilization. So we're looking at this as a long-term opportunity," he said.

"Yields are rising. We're becoming more efficient in our production and we have to optimize our freight corridors. I think there's going to be room for Churchill to be one of the gateways that's present within the system."