Agreement signed for sale of Churchill port, Hudson Bay rail line

The ownership of the Port of Churchill and Hudson Bay rail line is about to change.

OmniTrax Canada signs memorandum of understanding with Missinippi Rail Consortium

The process has begun to transfer the assets from OmniTrax Canada to a group of northern Manitoba First Nations, known as the Missinippi Rail Consortium. (Sean Kavanagh/CBC)

The ownership of the Port of Churchill and Hudson Bay rail line is about to change.

The process has begun to transfer the assets from OmniTrax Canada to a group of northern Manitoba First Nations, known as the Missinippi Rail Consortium.

"This step was taken after a year of due diligence and the signal from the consortium that it intends to move forward," states a news release from OmniTrax, which has owned and operated the port and rail line since 1997.

A memorandum of understanding has been signed by the consortium and OmniTrax, which enables the new owners to negotiate with vendors ahead of the 2017 grain season, although the federal government must still approve the sale.

"We are grateful that OmniTrax Canada believes in our process and our people and is willing to get started now," said Chief Arlen Dumas of the Mathias Colomb First Nation, which has led the consortium.

"Ensuring First Nations ownership in these assets is a vital part of ensuring long-term viability in the north. Now we need the government of Canada to complete their review so that this process can be concluded as soon as possible."

Consortium mum on details

In an interview with CBC, Dumas wouldn't say who was part of the consortium but noted the group is open to anyone who wants to join. He has already received letters of intent from a number of First Nations who want to be involved.

Dumas also wouldn't comment on the sale price or say how the purchase was being financed. He said there are "willing potential investors" but noted "we will require some support federally and provincially."

The sale of the rail line and port will promote substantial economic development for northern Manitoban First Nations and guarantee the preservation of those assets for all of the communities serviced along the railway, states the release from OmniTrax.

"It is a pleasure working with Chief Dumas. The chief's leadership, consideration and thoughtfulness have allowed us to ensure a great home for these assets with the Manitoba northern First Nations," said Merv Tweed, OmniTRAX Canada president.

"He has taken bold steps to prove his commitment to the transaction and we are eager to see it come to fruition in the coming months."

OmniTrax announced in July that the port was closing, and then handed out layoff notices almost immediately. About one in 10 Churchill residents — a town with a population of about 750 — worked at the port.

The move was condemned by municipal leaders, opposition politicians and organizations representing agricultural producers.

The company blamed a slowdown in grain shipments and not long after closing the port, OmniTrax scaled back freight service to Churchill on the Hudson Bay rail line to once a week from twice a week.