The federal government will contribute $117 million toward purchasing and repairs of the Hudson Bay Railway to Churchill.
Out of the funds contributed, $74 million is earmarked for covering the costs of buying and repairing the damaged rail line and neglected Port of Churchill facility over the next three years.
Another $43 million will be paid out until 2028 for operations on the line, at the port and the Churchill tank farm, while $10 million of the money will be earmarked to allow the purchasing group, formally called Arctic Gateway Group, to find a loan to help finance the final sale.
According to the agreement, the group will not provide dividends for the next decade.
The payment was announced on Sept. 14 in Winnipeg.
On Aug. 31, a deal was announced between Arctic Gateway Group and the now-former owners of the rail, port and tank farm facilities, Omnitrax Inc.
The rail line had been out of use since flooding damaged portions of the remote line in spring 2017.
The Arctic Gateway Group includes two northern Manitoba-based groups, along with Saskatchewan-based agriculture company AGT Foods and Fairfax Financial Holdings, a Toronto-based investment group.
The northern groups are Missinippi Rail and One North, which operates with the support and endorsement of multiple communities in northern Manitoba and Nunavut. That includes the City of Flin Flon, which voted earlier this year to purchase shares in the group.
“We have a stake in the group that purchased the rail and we’re very hopeful that the new ownership and management of the rail will lead to tons of opportunities for the north,” said Cal Huntley, mayor of Flin Flon.
The northern companies involved with ACG are a key part of the arrangement, said Huntley.
“It’s back where it should be. I think that’s a key. We understand the dynamics of the north and we understand the potential of the north. Where we need to go with this is to promote the opportunities that are here for the north.”
Huntley feels that once it is repaired and put back into use, the railway could be an important part of diversifying northern Manitoba economies.
“We’re very hopeful that will only be enhanced by the new ownership and new management,” he said.
Since the railway was damaged, Churchill has been cut off from land travel and has been accessible only by air or water. The town’s port, which was formerly a major transport hub for western Canadian products, commodities and agricultural shipments, was shut down by Omnitrax in 2016.
Now that the railway will be fixed, there is hope that Churchill’s status as a shipping hub for goods – namely, agricultural goods and oil – could soon return.
“The wheat is a given. It’s a much shorter pull in that respect and we’re hopeful that will be utilized as well, but we have to sell ourselves to the country and let them know we’re open for business in a quality fashion. That’s going to take a little doing, but I think with the advantages, I see huge opportunity for northern Manitoba and Manitoba in general,” said Huntley.
“Once the Churchill rail line is back up to speed and properly conditioned, it leads to a whole bunch of opportunities. In all honesty, why are we shipping oil through the mountains to the BC coast when we could be going immediately from Alberta and Saskatchewan straight up to Hudson Bay and Churchill and shipping it out that way?”
