Feds commit $2.7M in funding for Churchill, but no news on rail line repairs

The federal government has committed $2.7 million to Churchill to help create jobs and support the local economy while the community tries to cope without a rail line.

Costs in the northern Manitoba community have risen since rail line was washed out in the spring

The federal government has committed to providing more funds to Churchill. The rail line to the northern Manitoba community was damaged by spring flooding. (CBC)

The federal government committed $2.7 million to Churchill Friday to help create jobs and support the local economy while the northern Manitoba community tries to cope without a rail line — but no new announcements were made on when, or how, that line will be repaired.

Minister of Natural Resources Jim Carr announced the funding, which will be provided to the Churchill and Region Economic Development Fund.

"The objective is to diversify the economy and offer more job opportunities for Churchillians at a time when they need them," he said on CBC Radio's Up To Speed Friday afternoon.

Carr said the funding shows the federal government is committed to the people of northern Manitoba.

Spring flooding washed out sections of the railway earlier this year, leaving Churchill without any ground transportation access. Food prices dramatically rose in the town of about 750 on the shore of Hudson Bay, 1,000 kilometres north of Winnipeg, and business in the tourism sector dropped.

Hopes for the railway's quick repair disappeared as Omnitrax, the Denver-based company that owns the Hudson Bay Railway and Port of Churchill, and the federal government turned to lawyers and courts to find out which party is responsible for the repairs.

In November, Omnitrax filed a notice of intent to submit a claim under Chapter 11 of the North American Free Trade Agreement, which allows a business to sue a government without first going through the country's court systems.

The same day as the Omnitrax challenge, the federal government filed a lawsuit against the company for breach of contract. Ottawa is demanding $18 million, plus interest.

A few days later, Toronto-based investment company Fairfax announced its plans to join two groups representing northern communities and First Nations which have been trying to purchase the rail line and the port.

Churchill mayor Mike Spence called the funding welcome news and said the community won't have a problem finding ways to use it. 

He said the money will help fund projects like the building of a winter road that will provide a link to the south through this winter, and to subsidize local businesses that have been forced to pay higher prices to bring goods into the community since the rail line closed.

Spence says a portion of the funds will also be used to train those who've lost jobs.

"It's critical that we get people trained and get people employed," he said "What we are geared towards naturally is training and getting people back to work on projects that will essentially play a role in developing our community.

"We are strong, but at the same time we need support, and we're getting it now from the Government of Canada."

Still no timeline for rail repairs

Even with the new major player, the timeline for the rail's repair is unknown.

"We are very hopeful that Fairfax, a very important Canadian company, is interested in purchasing the rail line and the port," Carr said. "They have a northern vision, they have experience, they understand the transportation links and the supply chain."

However, Carr couldn't say how the negotiations with all the players are going. 

"The challenges are clear and then again, so are the opportunities," he said. 

New funds should help ease the pressure while the community continues to face uncertainty and demonstrate the wide range of opportunities that exist, said Minister of Innovation, Science and Economic Development Navdeep Bains in the news release. 

"The Government of Canada is committed to ensuring the long-term prosperity of the people who live and work in northern Manitoba, as well as the economic development of the region," he said.

The feds pointed to other actions already taken, including extending the Nutrition North Canada subsidy, which helps with food costs.

Previous money for the economic development fund also helped five other projects which will bring jobs, grow food and support a new winter ice road, the news release said. A local bakery and the Churchill Home Hardware store each received $25,000 to help with incremental business expenses due to rail service disruption.

The federal government added it will continue to work with the province to make sure there's enough fuel in the northern Manitoba community to get through the winter. 

"We southerners take for granted things that the northerners have to struggle with every day," Carr said. 

With files from CBC Radio's Up To Speed