Deal reached between Manitoba groups, Omnitrax for ownership of Churchill rail line

Deal reached between Manitoba groups, Omnitrax for ownership of Churchill rail line

The tracks have sat flood-damaged and idle for more than a year, but now a deal has been struck to bring ownership of the Port of Churchill and the rail line to the northern Manitoba community on the shore of Hudson Bay back into Canadian hands.

Two groups representing northern communities and First Nations — One North and Missinippi Rail LP — joined forces with Fairfax Financial Holdings and now have a deal to buy the beleaguered assets from American company Omnitrax, One North announced Wednesday.

Fairfax, a Toronto-based investment company, announced last November it would partner with One North and Missinippi Rail in an effort to buy Omnitrax’s northern Manitoba assets.

Specifics of the deal, including the financial details and a timeline, were not announced Wednesday.

Fairfax president Paul Rivett and Omnitrax owner Pat Broe negotiated the agreement, but there are a number of legal issues to complete before the sale is finalized.

Churchill Mayor Mike Spence calls Wednesday’s agreement a ‘historic partnership involving Indigenous and northern communities with industry leaders.’ (Sean Kavanagh/CBC)

The agreement has been a long time coming for Churchill mayor and One North co-chair Mike Spence. He’s been lobbying for a deal since Omnitrax began cutting rail service to his community nearly two years ago.

“Priority No. 1 will be rail line repairs in the very near future and to finalize the acquisition,” Spence wrote in a statement.

“This is an historic partnership involving Indigenous and northern communities with industry leaders that now positions the Port of Churchill as a Arctic gateway for future prosperity.”

The deal has the support of the federal government, Spence said in his statement.

Ottawa took Omnitrax to court over its refusal to repair the tracks last year, but later removed Omnitrax Inc.from its statement of claim.

The rail line to Churchill was washed out by a flood in May 2017.

Denver-based Omnitrax refused to repair the tracks, saying it couldn’t afford the cost and had been trying to sell the northern port and rail line.

The company estimated the cost of repairs at between $40 and 60 million.

A firm timeline on when crews can start repairs to the track must wait until some of the legal issues are worked out between the buyers and Omnitrax. (Mike Spence/Town of Churchill)

Residents along the line and in Churchill, a town of 900 approximately 1,000 kilometres north of Winnipeg, have faced increasing costs for all sorts of commodities, including heating fuel and gasoline.

Prime Minister Justin Trudeau said last year it was Omnitrax’s responsibility to do the work and get the line open. The federal government offered subsidies to northern residents to help with rising costs.

Wednesday’s announcement also has significance for First Nations along the rail route.

“Bold investments into much needed infrastructure will create long-term socio-economic growth for the north,” wrote Opaskwayak Cree Nation Onekanew (Chief) Christian Sinclair, who is also a co-chair of the One North group.

“We see immediate opportunities to support the success and growth of the business, creating opportunities for OCN and for all of our partners in northern Manitoba.”

A firm timeline on when work crews can get on the rail tracks and start repairs must wait until some of the legal issues are worked out between the consortium and Omnitrax.

Published at Wed, 30 May 2018 19:09:47 -0400