CNS Canada — Manitoba’s Port of Churchill is facing an uncertain grain shipping season, as ownership of the Hudson Bay facility is still up in the air, months after owner OmniTrax announced plans to sell the port and the railway that serves it.
Denver-based OmniTrax announced in late 2015 it had accepted a letter of intent from a group of First Nations communities to purchase its northern Manitoba assets.
However, that deal is still not finalized, and the negotiations have been complicated by an OmniTrax court case against the Manitoba provincial government, as well as by protests from some members of the First Nations involved in the purchase offer.
“The veil of uncertainty certainly hovers over the rail line and port,” said Sinclair Harrison, past president of the Hudson Bay Route Association and a farmer at Moosomin, Sask.
Canada’s only Arctic port moved 184,600 tonnes of grain during its 2015 shipping season, well off its average of 500,000 tonnes. Harrison estimated the port could easily handle one million tonnes in its current state, if the will was there.
However, “it’s tough to do business when you don’t know who the owners will be,” added Elden Boon, the current HBRA president and a farmer at Virden, Man. It was hard to get any information out of OmniTrax, he added.
“It’s frustrating for the whole Hudson Bay supply chain,” said Boon on the uncertain ownership picture, adding that “it will have a negative impact on shipments.”
Boon was hopeful something would come together over the next few months, but was also “not holding (his) breath.”
The Port of Churchill is a small player in the bigger transportation picture, but Boon saw many benefits of maintaining the infrastructure.
In addition to being the shortest distance to tidewater for farmers in the catchment area, he also saw opportunities to serve niche markets that may not fit with Canada’s larger ports.
Boon said there were also many plans for imports, exports, and diversification beyond grain through the port that have been talked about for years, but now need credible ownership in order to move forward.
“We need to build on this infrastructure, not try and do away with it,” said Boon.
Chief Arlen Dumas of Mathias Colomb First Nation, north of The Pas, Man., spearheaded the purchase offer, which now involves 12 northern communities. The band already has ownership in the Keewatin Railway Co., running 400 km from The Pas to Pukatawagan.
“We’re still in talks and in the process of negotiations on moving forward on the deal,” said Dumas, noting the Manitoba provincial election in the spring caused some delays.
Dumas did not have any concrete dates and said it was too early to discuss specifics while the negotiations were underway. In general, he said a sustainable port and enhancements to freight movement were important for the overall plan for the North.
Grain exports have long been a major feature of the Port of Churchill, and Dumas said his group was also in conversation with grain companies “who want to utilize the port, but in recent years they’ve had a disincentive to do so.”
Dumas added that “everyone is looking forward to partnering and collaborating with people who have a similar philosophy.”
A program put in place by the federal government will provide subsidies for grain moving through the port this season of $12 per tonne, up from $9 the previous year as there was money left over from the 2015 pool.
That program expires next year, but the HBRA and others are advocating for an extension.
OmniTrax officials did not respond to repeated requests for comment.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow CNS Canada at @CNSCanada on Twitter.