Canadian Manufacturing

Omnitrax says damaged Churchill rail line can be quickly fixed, but it won’t pay

Transport Minister Marc Garneau has issued an ultimatum to Denver-based Omnitrax that it has 30 days to fix the rail line and restore service or face legal action

October 18, 2017  by John Cotter, The Canadian Press

CHURCHILL, Man.—The company that owns a broken rail line to Churchill says it could restore limited service to the northern Manitoba community within 30 days but it is not willing to pay the bill.

Omnitrax Canada president Merv Tweed said a proposal made to Transport Canada earlier this month calls for temporary repairs to 25 sections of the line that were washed out by flooding last spring.

“Basically it would put the line into service on a very limited basis. It wouldn’t be available to passenger traffic,” Tweed said Tuesday in an interview.

“We would be able to move very light cars up there to move some product and some goods.”


The cost of the temporary fix to provide Churchill with “emergency supplies” over the winter would be up to $10 million, says a study by engineering firm AECOM.

AECOM’s report notes that the Hudson Bay rail line would still require another $43.5 million of work next year to restore it to full, safe and operable conditions.

Tweed said Omnitrax has been waiting for a response from the federal government since Oct. 6. He said the company has made it clear since the summer that any repairs to the line are up to Ottawa.

Transport Minister Marc Garneau said Tuesday that the cost of any repairs remain Omnitrax’s responsibility, although the government would be open to helping a new owner fix the line.

Garneau reiterated an ultimatum made to the Denver-based company last Friday that it has 30 days to fix the rail line and restore service or face legal action.

“They are responsible in a case like this to repair the line and to resume operations. We expect them to do it. That is why I sent them a notice of default. If they do not do that, we will take legal action,” Garneau said in Ottawa.

“There is a possibility of financial help, but not to Omnitrax, because they have been a partner in bad faith and we would be looking towards some other partner to re-establish the line.”

Omnitrax has been in talks to sell the rail line to a consortium of northern Manitoba communities and businesses.

Natural Resources Minister Jim Carr, who represents Manitoba in the federal cabinet, said Friday that he hoped a deal may come soon.

But answering questions in the Senate Tuesday Carr said the northern port may not get its rail service back until after the snow melts.

“We’re preparing for the possibility there will be no rail service this winter,” Carr said.

Conservative senator Don Plett accused him of being part of a government that interfered with the attempts to sell the rail line privately, which Carr denied.

Carr said Ottawa is working with the province to ensure a fuel supply for the town, and pointed to the extension to Churchill of the government’s food aid program to offset higher costs of food in fly-in communities.

Damage to the 250-kilometre rail link has forced goods and people to be flown into Churchill at a high cost.

With files from Terry Pedwell and Mia Rabson in Ottawa