Manitoba

Manitoba wants $1.7M Port of Churchill lawsuit dismissed

Manitoba says a lawsuit launched against the province in December by a subsidiary of OmniTrax should be dismissed with costs in a statement of defence submitted Monday.

Hudson Bay Port Company, a subsidiary of OmniTrax, says province owes company operating losses

Hudson's Bay Port Company says Manitoba owes $1.7 million plus interest and damages for 2015 season. (Sean Kavanagh/CBC)

Manitoba says a lawsuit launched against the province in December by a subsidiary of OmniTrax should be dismissed with costs in a statement of defence submitted Monday.

The province entered into an agreement with the Hudson Bay Port Company on July 1, 2015 to help them cover losses at the Port of Churchill. The port plays an essential role in the Churchill economy, employing about 10 per cent of the town's population.

In its statement of claim, the Hudson Bay Port Company says it's owed $1,732,655 in operating losses, plus damages and interest, from the province of Manitoba after the province agreed to subsidize the port.

Manitoba's 2015 agreement with the Hudson Bay Port Company established three forms of potential subsides for the port with regards to the 2015 shipping season — capital, tonnage and operating support, the province said in its statement of defence.

Manitoba has already paid $263,424 in capital support and $563,400 in tonnage, totaling $826,824 to the Hudson Bay Port Company. But the company argues the province has failed to pay the more than $1.7 million owed in operating losses.

The province counters the claim by arguing it doesn't owe the company any money in operating losses because the Hudson Bay Port Company failed to take part in a mandatory working group with the province to establish fair terms for an operating loss claim.

Because the Hudson Bay Port Company failed to meet conditions set out in the July agreement, the government says, it's under no obligation to pay operating support.

The province goes on to say OmniTrax "publicly undertook a very aggressive and adversarial lobbying campaign in the hopes of, among other things, securing further public subsidy."

The $1.7 million lawsuit is in relation to one of two lawsuits launched by OmniTrax or a subsidiary against the province of Manitoba.

In April, the former owners of the Port of Churchill and Hudson Bay Railway line, sued the government of Manitoba, former NDP premier Greg Selinger and cabinet minister Steve Ashton alleging they broke with a non-disclosure agreement signed on March 11, 2015.

The government says in its statement of defence it did not leak any information "beyond the scope" of a confidentiality agreement it entered into with OmniTrax Canada. The company accuses the defendants of interfering in the sale by leaking information to the consulting firm MNP LLP and Opaskwayak Cree Nation.

In December 2016, OmniTrax announced it had a memorandum of understanding to sell the Churchill and railway assets to a group of northern Manitoba First Nations, known as the Missinippi Rail Consortium, led by Mathias Colomb First Nation.

The parties are still waiting on federal government approval on the sale, the company told CBC on Friday.

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