Federal regulator to hear complaint against Omnitrax on failure to fix Churchill railway

The Canadian Transportation Agency will hear a complaint launched by the Manitoba NDP against Omnitrax Canada over the company's failure to resume service after flooding damaged its northern Manitoba railway.

If federal regulators side with the provincial Opposition party, the company could be forced to repair and resume service on the line that connects the northern Manitoba towns of Gillam and Churchill. Hudson Bay Railway has been out of service since May 2017.

"This is pretty important to the people of Churchill," NDP Leader Wab Kinew told reporters Friday. "The No. 1 issue for people in town is getting the rail line back open."

A formal hearing of the complaint is scheduled between the parties on Feb. 15, according to Canadian Transportation Agency documents provided to CBC News by the NDP.

The hearing is procedural and will hear arguments from both parties as to whether Hudson Bay Railway, owned by Omnitrax, should answer questions raised by the NDP.

"We've taken concrete action.… Hopefully this is another step toward doing right by the people of Churchill," said Kinew.

Omnitrax declined CBC's request for a comment Friday.

Manitoba Infrastructure Minister Ron Schuler criticized the NDP's actions as a ploy to get attention.

"NDP grandstanding to generate headlines does nothing to resolve the situation. We believe in real solutions. Preening in front of the media does not achieve real solutions," Schuler said in a written statement. 

The CTA is an independent government regulator that makes rulings on licences and complaints relating to fares and services of transportation providers in Canada.

The Manitoba NDP alleges Omnitrax, owner of the Hudson Bay Railway, did not meet its service obligations when it failed to repair the railway. The political party's complaint was opened by the CTA Oct. 27, 2017.

Trinh Phan, a spokesperson for the transportation agency, said the CTA strives to resolve cases within 85 business days of the date the complaint is opened. However, he said due to the complexity of this case, the resolution may take longer.

Through its lawyer, Omnitrax had argued for the case to be tossed on a number of grounds, including that the NDP lacks standing to complain about the lack of rail service to Churchill.

The regulator ruled in the NDP's favour, deciding that the cessation of service affects the entire community which the party is a member of.

The agency noted this does not mean the NDP is entitled to any particular remedy, such as financial compensation.

In the past Omnitrax has said it will cost $60 million to repair the tracks, which are washed out at several locations on the route to Churchill. The community of 900 relies on the railway for transportation of goods and people.

Since the rail line closed, prices for everything from dog food to gas have gone up in town.

In December, a group made up of Polar Industries, Fox Lake Cree Nation and Remote Area Services freight company, set up an ice road to Churchill as a temporary stop-gap measure.

Kinew hopes the NDP's complaint will help efforts by Ottawa, communities in the north, and private companies to transfer ownership of the Hudson Bay Railway from Omnitrax to northern owners who have a direct interest in keeping the railway open and active.

"It is another piece of pressure — a point of leverage — that the federal government and the town can use toward their negotiations," Kinew said.

Churchill Mayor Mike Spence, who is not involved in the NDP's complaint to the CTA, said in a written statement Friday the transfer of ownership is still his main priority.

"We acknowledge the filing of this CTA complaint regarding Omnitrax's actions and will continue to observe this process, however we remain focused on the restoration of rail service to the community this spring and to ensure a strong 2018 shipping season for the Port of Churchill," Spence wrote.

In an unrelated legal proceeding, the federal government is suing Omnitrax for $18 million for violating terms of a 2008 agreement that saw the federal and provincial governments pledge $20 million each to help upgrade the railway.

The next hearing date for that lawsuit is Feb. 22.