Railway to Churchill, Man., sold — repairs to begin 'immediately'

Repairs on a vital rail link to northern Manitoba are set to begin immediately, the federal government said Friday, following a deal to sell the flood-damaged line leading to the remote town of Churchill.

The community of roughly 1,000 people — Canada's only deep-water Arctic port — has been without a land route since the railway flooded in May 2017. The closure drove up costs for fuel and food, which had to be brought in by air or ship.

The railway and the Port of Churchill have been purchased from Denver-based Omnitrax Inc. by Arctic Gateway Group Limited Partnership, a private-public partnership that includes Missinippi Rail Limited Partnership, Fairfax Financial Holdings and AGT Limited Partnership.

Churchill Mayor Mike Spence said the deal means communities along the line are now equal owners of the railway. The arrangement includes the participation of 30 First Nations and 11 other communities in northern Manitoba and seven Kivalliq communities in western Nunavut​.

"We'll have control in the future, and we'll work toward prosperity," he said. "This is historic, I don't think there's another model out there in Canada that would fit into this equation.

"This is what we hoped and wished for — we are finally there."

International Trade Diversification Minister Jim Carr thanked area residents for their patience. 

"I want Canadians living in northern Manitoba and Nunavut to know that the Government of Canada understands the importance of the line to their daily lives," he said in a release on Friday. 

Omnitrax had claimed it couldn't afford to fix the tracks. The company estimated minimum repairs to restore light passenger-rail service would cost between $40 million and $60 million and take approximately 60 days. 

Fairfax, a Toronto-based investment company, announced last November it would partner with Missinippi Rail, a group representing northern communities, in an effort to buy Omnitrax's northern Manitoba assets.

In June, the Canadian Transportation Agency (CTA) ordered the Omnitrax-owned Hudson Bay Railway to start repairs, following a complaint from Manitoba's Opposition NDP. CTA started a compliance review in July.

'Racing against time'

Arctic Gateway will be co-ordinating repairs and says crews have been mobilized to start work immediately.

"We are racing against time," said Fairfax Financial president Paul Rivett in a release. The new owners are aiming to have the rail line operating before winter.

"Phase 1 of the project will be to repair the rail line, undertake safety and rehabilitation upgrades to the port and the railway assets. We will commence the repairs and do all we can to restore service expeditiously and safely."

In an email statement Manitoba Premier Brian Pallister praised the deal and said plans are in place if the line can't be fixed before winter.

"We are hopeful the repair of the rail line can occur as soon as possible so that service can be resumed before freeze-up," he said.

"However, we want to reassure the people of Churchill and the surrounding northern communities that we have already made the financial commitments and logistical arrangements necessary to ensure propane resupply for the winter."

The negotiations for the purchase of Hudson Bay Railway's Manitoba assets, including a rail yard in The Pas and a marine fuel tank farm in Churchill, along with the rail line and port, have been going on for months.

The deal covers the Omnitrax-owned Hudson Bay Rail Company, the Hudson Bay Port Company and the Churchill Marine Tank Farm. The value and other details of the sale were not released.