Churchill Line to be Repaired

From Mike Spence / Town of Churchill

It's hard to believe, but a deal has been reached to sell the rail line to Churchill, and to repair it. I wasn't entirely sure this day would ever come!

Since the rail line washed out in numerous places in late May 2017, there have been many calls to the owner, Omnitrax, to repair the line. They commissioned an engineering survey and announced in July 2017 that it would cost a zillion dollars up to $60 million to repair the line. Since then, not much has happened.

Now, everything has changed.

A consortium of First Nations, Fairfax Financial Holdings, and AGT Limited Partnership - collectively called Arctic Gateway Group Limited Partnership - have purchased the railway line, the Port of Churchill and the marine terminal in Churchill from Omnitrax.

I have to assume that the entire Hudson Bay Railway is part of the deal, which would include the branch to Flin Flon as well as the main line between The Pas and Churchill.

I think it is very encouraging that two groups of First Nations and northern communities - One North and Missinippi Rail - are involved. This includes 30 First Nations, 11 non-First Nations communities in Manitoba, and seven Kivalliq communities in western Nunavut. Local ownership should encourage usage in ways that Denver-based Omnitrax couldn't envision.

Repairing the Churchill Line

There's no official word on who will be hired to repair the line. I've heard rumours but nothing has been announced yet. All reports say that repairs should begin immediately. Time is certainly running out!

Hopefully it will take a lot less than $60 million to open the line and get freight and passengers moving again. I imagine they could get the line open for freight before winter. It might take a long time for a freight to crawl over the line, but it's still a lot better than waiting for a ship!

Passenger Service to Resume?

The Gillam-Winnipeg train... hopefully soon the Churchill-Winnipeg train again?

It's very premature to speculate on when VIA Rail will resume service. I imagine they will do so as soon as it is safe to do so. You may recall they had to extract their stranded train by ship late in 2017.

VIA has been running one weekly train between Winnipeg and Gillam (VIA 692/693), as well as a train between The Pas and Gillam (VIA 690/691) and between Thompson and Gillam (VIA 694/695). They're doing the best they can, given that the track is impassable not far north of Gillam.

I'm sure railfans will be watching this closely... I'll be reporting on my Twitter feed and here when I can.

See Also

• All my Churchill blog posts
• Churchill rail line washed out
• Movement on the Churchill line? (September 2017!)

Escape From Churchill

Photo by Patricia Sinclair

You may recall that VIA's Winnipeg-Churchill train has been stranded in Churchill, Manitoba for months, since flooding severed the line in May. No work has been done to repair the track so the two locomotives and five passenger cars have been sitting by the station.

Soon VIA Rail's trapped train set is going to be extracted from Churchill by ship.

Two If By Sea

The CBC and the Winnipeg Free Press are reporting that the MV Nunalik is bringing 2.2 million litres of propane to Churchill, and it will take the two locomotives and five train cars to Quebec afterward.

A set of rail panels and ties appeared in Churchill in mid September and many people speculated they were going to be used for transferring the VIA trainset to a ship.

I expect the track will be laid on the ship and then the cars will be individually hoisted aboard.

The Nunalik

The MV Nunalik is a heavy lift ship with its own cranes on board (2 x 180 tonne), so it is certainly capable of lifting a locomotive or passenger car. It is new to the Inuit-owned NEAS fleet serving the North. It was built in China in 2009 so it is pretty new.

The news articles suggest the ship will arrive in Churchill on October 8th but the NEAS schedule shows October 13th as the arrival date and October 15th as the departure date. The CBC is also calling the Nunalik a "barge", which is wrong.

Nail in the Coffin

I don't think anyone blames VIA Rail for doing this. It's October and nothing has been done to fix the rail line, and the construction season is just about over for the year. There's no chance of getting the train out by rail this year, and as VIA indicated in an interview for the Free Press, the train is starting to rust. They have to preserve their asset.

It's just a very visible indication that the rail line isn't getting fixed this year. And that sucks.

See Also

• Movement on the Churchill Rail Line at Last?
• Rail Line to Churchill Severed

Movement on the Churchill Rail Line At Last?

View of Churchill from the 1960s. Photographer unknown.

There might be hope for the Churchill rail line after all. Maybe. It's been a busy week.

The Governments Speak

The federal government issued a press release today "formally demanding" that the Hudson Bay Railway (owned by Omnitrax) repair the railway line to Churchill, Manitoba. The government "is willing to look at all options" including seeking repayment of the $18.8 million it contributed in 2008, as well as "exploring the possibility of working with a new owner." (also CBC article)

Meanwhile, the provincial government is ready to spend $500 million over 10 years to support Churchill, although that would not go to rail repairs as that is a federal responsibility.

You may recall that Omnitrax held a press conference back in July to announce the findings of its engineering survey, and that it would cost up to $60 million to repair the line. Since then... nothing has happened.

The Alberta Connection

Earlier this week, a United Conservative Party leadership candidate, Jeff Callaway, suggested that Alberta should buy the port and rail line to be used to ship oil from Alberta. That was met with strong opposition from Churchill leaders.

The idea of shipping oil through Churchill was "floated" by Omnitrax a few years ago. By August 2014 the idea was dead (my blog post).

Given the relatively frequent derailments and inaccessibility of most of the rail line, an oil spill would be difficult to clean up and potentially disastrous for the environment. I'm not surprised by the opposition.

VIA Rail Extraction?

VIA Rail's train set continues to sit beside the station in Churchill. A day or two ago, there were rumours that VIA was going to ship the train out by barge.

The president of the local Chamber of Commerce, Dave Daley, said Tuesday that "the train isn't leaving here unless it's leaving by the tracks. Because we'll blockade it and we'll make it sure it doesn't leave." (Facebook post of a Winnipeg Free Press article)

It seems unlikely that the Port employees would permit such a move.

Incidentally, Omnitrax doesn't have any locomotives in Churchill. VIA is the only company with rail equipment there.

Summary

It's been a bit over 14 weeks since the rail line was severed by unprecedented flooding.

It has been so long that even the New York Times has weighed in with an article.

Time is running short for the construction / repair season.

We'll wait and see if anything happens in the next week or two!

Update

The two First Nations groups that were competing to buy the port of Churchill and rail line have agreed to merge. They sent a jointly signed letter to the Prime Minister's Office. This puts the ball in the PMO's court to approve the sale so Omnitrax can be done with the line, and the funding for repair can start.

See Also

• Rail Line to Churchill Severed
• Updates on Churchill Rail Line
• Facebook group "Save our Port"

Sixty Million to Churchill?

Omnitrax held a press briefing on Tuesday, July 18 to present the results of the study that they commissioned to assess the flood damage to the rail line from Gillam to Churchill, Manitoba. The costs are.. high.

The Study

AECOM Canada, the engineering company that did the study, estimates that the line could be fixed in 60 days starting on September 1, for a cost starting at $13 million that could climb to $60 million. EDIT: Link to study

The study says there are 13 bridges, 68 culverts and 31 washout areas that need to be repaired on the Hudson Bay Railway's Herchmer Subdivision's 183.7 railway miles (294 km) between Gillam and Churchill.

Omnitrax has stated that they don't have the money to fix it, and have called the line "a public utility" and they "believe there is a role for the public to play" in fixing the line.

Government Response

So far government response continues to be muted. The provincial government indicated it is looking to the federal government to lead. Meanwhile, the federal government indicates that Omnitrax has an obligation to repair the line.

Reports say that Omnitrax has received $20 million from the federal government over the past 5 years and Manitoba has contributed "millions". AECOM said that Omnitrax has spent $60 million on the line since 2009 to improve conditions, although this Financial Post article seems to call that figure into question.

A Deadline

Omnitrax stated that it has to have funding in place by August 1 to begin planning for the work to commence in September, and be completed within 60 days before it becomes too cold to work.

What Now?

There's no doubt that Omnitrax can't afford to fix the line. They are privately held, so their financials aren't available, but the estimate I found says the company's gross income is around $90-100 million USD. $60 million would be a tremendous burden. I assume they have some insurance to cover losses like this but nobody outside Omnitrax seems to know much about that. Many people are insisting that Omnitrax is holding the town of Churchill hostage for public funds.

As I said at the end of my last update, I still think the best course of action is for Omnitrax to immediately proceed with the sale it already negotiated, and then the federal and provincial governments can step in to pay for the repairs. It's clear that the governments are loath to contribute money to a private company - understandably - so Omnitrax has to be removed from the situation.

I can't see why Omnitrax would want to hold on to the line, except perhaps to get the best price for it. I have no doubt they are universally hated in Churchill, especially when they boosted the price of gas by 30 percent briefly last night.

So sell it already and let's get on with fixing the rail line and restoring service.

Updates on Churchill Rail Line

Omnitrax photo

Churchill has been in the news a lot since the rail line was severed near the end of May.

Churchill Suffering

Since the Hudson Bay Railway stopped delivering to Churchill, the only way to get goods into the town is by air, which drives transportation costs up. The community is starting to get desperate and prices have increased for groceries, fuel, building supplies and other materials.

The federal government implemented its Nutrition North food subsidy program to Churchill and continues to do so. Nutrition North subsidizes "a variety of perishable and nutritious food items" and "traditional food commercially processed". In my opinion, this is a good program to help get fresh goods to people in remote areas.

Fortunately for Churchill, it is not the heating season.. yet. There is a big concern about heating for the coming winter season, as Churchill does not have enough on-site storage for propane for the entire winter. The Manitoba government is reportedly "mulling" adding storage. Clearly materials are going to have to come in by ship or barge soon.

How Badly Damaged Is It?

Two motorcyclists from Colorado drove up the rail line recently and their photos have made quite an impact. Many say the damage doesn't appear to be as bad as Omnitrax has been saying, and there have been a lot of pressure put on the company to start work.

The photos clearly show a considerable amount of ballast that was washed away, with several sections of track hanging in the air. There are no photos of the bridges along the line and no photos of culverts or other track support structures.

Personally I don't hold a lot of faith with these photographs. It's easy to say that a few loads of ballast will fix things up, but the real costs are with bridges and culverts and there's no way to know from a few cell phone photos how much those are damaged. Dumping ballast may put the line in service for a short while but the next rain storm will break the line again.

Fixing the Line

So far no repairs have been made to the line. Omnitrax says it is waiting for an engineering report to be completed, while people are demanding that repairs start. Local First Nations groups have suggested that the "nearby" shortline Keewatin Railway Company could step in to fix the line. UPDATE: The KRC says they can do it for $2 million and finish in 45 days.

Omnitrax has not been communicative, which does not help.

Part of the problem with fixing the line is that it has to be done one break at a time. There are no parallel roads or paths that can be used to position materials at each location to be fixed. The repair crew would have to fix one break then move on to the next one.

It is possible they could repair it enough to be able to pass over, then leave some equipment and material behind to do a permanent fix as the next break is worked on.

I believe Omnitrax plans to do the work in the winter when the ground is frozen and they can move materials over the frozen ground. I also believe that this is too long to wait.

Time For a Road?

At least one person is calling for a road to Churchill. Marolo Alfaro, a professor of civil engineering at the University of Manitoba, worked on a highway in the Northwest Territories. The terrain is challenging - permafrost and muskeg being the primary concerns.

A road to Churchill was studied about 10 years ago as part of a Manitoba-Nunavut route, and it was considered "feasible" but no costs were estimated. My guess is that costs would likely be in the half a billion (with a "b") dollar range.

Maybe someday in the future a road might be a good idea, but that doesn't help Churchill now.

Why Hasn't Anything Been Done?

Omnitrax's position is that they are waiting for the engineering study before taking action. The federal government continues to subsidize groceries, as mentioned above. The provincial government has done very little of substance.

It is hard to know why no significant action has taken place yet. I imagine there is a lot of discussion behind the scenes, and perhaps something will appear in the next few days or weeks from different levels of government.

I believe the major complicating factor is that the line is owned by a private company. I believe the governments are reluctant to give a lot of money to a private company for repairs, especially since Omnitrax really wants to sell the line, and since many people believe Omnitrax has mismanaged the rail line and do not deserve any support.

What Should Be Done?

I believe that Omnitrax should sell their line to the local First Nations.. sooner rather than later. They have already signed a Memorandum of Understanding and they should get on with it. Alternately, they should sell it to the federal government.

This would allow the federal and provincial governments to step in to assist with repairs and get freight and passengers moving again (and help move that stranded VIA train).

Long term, governments have to expect that they will have to subsidize the rail line every year, forever. There can be no reasonable business plan that can expect this line to pay for itself... just like no road to Churchill could pay for itself.

The people of Churchill are waiting for action.

Update From the Premier

Manitoba premier Brian Pallister said the province plans to convert about 100 Manitoba Housing units to electric heat to reduce the need for propane heating in Churchill. Mike Spence, the mayor of Churchill, is unimpressed.

Thompson Freight Office Closed

On July 7 Omnitrax issued a statement that their freight centre in Thompson, Manitoba would be closed indefinitely. Since no traffic is going north, except perhaps a little to Gillam, it didn't make sense to keep the office open.

Rail Line to Churchill Severed

On May 30, rail service to Churchill, Manitoba was suspended - perhaps for months, if not indefinitely.

Hudson Bay Railway map
Affected area shown in red

The last freight train arrived on May 23 but nothing has come since, due to unprecedented flooding in the area. The Churchill River was flowing at just over 1,400 cubic metres/second at the end of June, versus about 600 cubic metres/second in April. Major blizzards in March didn't help the situation.

The owner of the railway between The Pas and Churchill, OmniTRAX, issued a statement on May 30 that the Hudson Bay Railway would not be operating between Gillam and Churchill due to "track and bridge damage.. caused by the spring thaw." This is the Herchmer subdivision.

On June 9 (Friday) OmniTRAX issued an update that said that "unprecedented and catastrophic" damage has occurred and the rail line is "not expected to resume operations before the winter season." The track bed is damaged in 19 locations and 5 bridges are known to be damaged, with an additional 30 bridges and 600 culverts to be inspected in the coming weeks to determine how much more damage has been caused. (CBC News) No doubt it will cost millions of dollars to repair.

What Now?

Hudson Bay Railway locomotive
in Winnipeg, Dec 2011

OmniTRAX has declared force majeure, which is a legal term that basically means they are unable to fulfill their common carrier duties due to circumstances beyond their control.

This is terrible news for Churchill and for communities north of Gillam. The rail line is the sole connection for many of them, since the only transportation into Churchill is by rail or by air.

Calm Air (a northern airline) and Gardewine (a regional ground transport company) have teamed up to provide some air-based freight service from Thompson, but this is very expensive in comparison to rail freight and will result in severe hardship for businesses and individuals in Churchill.

This also basically kills the tourist season for Churchill, as the majority of tourists come by rail using VIA 693 from Winnipeg. Businesses are already issuing layoff notices and no doubt more will be coming.

VIA Rail

Speaking of VIA Rail, there is a VIA Rail train stranded in Churchill, with VIA 6434 and "Canada 150" wrapped VIA 6402 parked at the station.

VIA 6434 and 6402 stranded in Churchill. Photos by Patricia Sinclair, used with permission.

VIA issued a travel advisory on June 6 that they will only be operating between Winnipeg and Gillam. Looking at their reservation system you can book a trip to Gillam as usual, but it fails when you try to book to Churchill.

I see there is a wye in Gillam so they should be able to turn VIA 693 on the wye and become VIA 692, rather than backing up.

For Sale?

This will obviously have an effect on OmniTRAX's attempts to sell the line. You may recall they were talking with a First Nations consortium, since named the Missinippi Rail Consortium, and in December OmniTRAX signed a Memorandum of Understanding with them.

On May 31 OmniTRAX and Missinippi signed a deal for $20 million. I imagine (hope) there are some contingencies because I doubt Missinippi wants to inherit this mess.

There is a rival group, One North, that was also vying to purchase the line.

Hope for the Best

Hopefully the engineering assessment underway now will find that the damage is not as bad as first imagined. It will be terrible if the line will not open until the winter, and I can't imagine that OmniTRAX is willing or able to shoulder the entire cost of the repairs, given the marginal economic value of the line as it is.

The people of Churchill and communities along the line between Gillam and Churchill will be enduring significant hardship while this line is out of service. I really feel for them.

More to come.

Updates on Churchill

There have been a few developments for the port of Churchill, Manitoba since it was abruptly closed in early August, and rail service to the area by Omnitrax was reduced from twice weekly to once a week.

Churchill has exported around 500,000 tonnes of grain per year for the past several years, but the looming expiry of the Port of Churchill Utilization Program (CPUP) subsidy of $12/tonne of grain doesn't help the the future of the port at all.

Cash Injection

The federal government has promised $4.6 million in economic development funds to the town to help find other sources of jobs beyond the port. The funds are coming through Western Economic Diversification Canada, a government agency I'd never heard of before (they employ about 300 people and have a budget of about $155 million).

The government intends for local groups to identify projects to use the $4.6 million to generate jobs in the local economy. It appears that this may not be the only incentive coming from the federal government, as they indicated they have an "open door policy" and "in the long term are open to any ideas."

Support from the Province

The Manitoba provincial government has been low key on the Churchill port closure, and the reduction of railway service.

Ministers have travelled to Churchill, and the province announced a mild increase in support for tourism in the area. The major funding announcement from the province was a previously-planned $9 million marine observatory in partnership with the University of Manitoba.

Local Ownership

A consortium of First Nations has indicated a strong interest in acquiring the port and rail line. Arlen Dumas, chief of the Mathias Colomb Cree Nation, has indicated that the consortium has been talking with Omnitrax, the Denver-based owners of the port and railway.

These discussions have been reported on before in the media, so it's uncertain how serious they really are.

Nationalize?

The union representing Churchill port workers, the Union of Canadian Transportation Employees, is calling on the federal government to create a port authority, similar to Saguenay, QC and Thunder Bay, ON.

The union has the support of local MP Niki Ashton, Honourable Member for Churchill-Keewatinook Aski. She is coincidentally the NDP critic for "Jobs, Employment and Workforce Development", which seems ideal for Churchill job stimulation.

Ms. Ashton has a petition on her web site that visitors are invited to sign online or download a copy to mail to her office.

#SupportOurPort

There's a Twitter hashtag, #SupportOurPort, that was used in the summer to mark tweets about the port and the railway to Churchill. It hasn't seen much use recently.

What's Old is New Again

I was reading an old Branchline magazine from March 1987, and noted a news item where a former Transport Minister, Otto Lang, was stating that shipping grain through Churchill "is a costly mistake." Back in 1986, CN moved 608,000 tonnes of grain through Churchill, which was only 2% of Canada's grain exports.

See Also

• Doubly bad news for Churchill

Doubly Bad News for Churchill

One

On Monday, the Port of Churchill handed layoff notices to approximately 50 of its workers and gave notice that it will not be shipping any more grain this year. This effectively shuts the port down, although reports indicate that it will be officially open until August 6th.

Omnitrax, based in Denver, owns both the port and the Hudson Bay Railway that serves the port and other northern communities.

Two

On Tuesday, one of the major shippers to the north, Gardewine North, was informed that the Hudson Bay Railway will be cutting their service in half and only running one freight train per week.

Gardewine North truck trailer on flatcar, Thompson, MB

Churchill and many other communities are not accessible by road and therefore depend on the railway for supplies. The alternative is flying supplies in, but this is very expensive and you can't bring in bulk fuel by airplane very easily!

You may recall that the railway and port were both put up for sale in December. Soon afterward a group of First Nations sent a letter of intent to purchase the line, but apparently this has fallen through.

There's more bad news for the Hudson Bay Railway with the announced closure of the Tolko kraft mill in The Pas, Manitoba..

EDIT: also apparently someone set one of their (dormant) locomotives on fire.

What To Do?

It's difficult to know what to do.

Churchill is not required as a grain port as grain is normally shipped to Vancouver and Thunder Bay and both have recently expanded their facilities. With climate change and the thawing of the Northern Passage there is a possibility of increased shipping in the far north. Churchill is the only rail-accessible deep-water Arctic port in Canada and it has some strategic importance.

However, it is losing money and the railway is expensive and difficult to maintain. Omnitrax wants out and I can't see CN stepping in to buy the line back.

I think the only chance to save the port and/or railway is for the federal government to resume subsidies. The current Churchill Port Utilisation Program is set to end after the 2016 shipping season.

One alternative is for the federal government to acquire the port again. The mayor of Churchill is calling for this.

We shall see what happens in the next week or two. Omnitrax has said nothing so far but no doubt the pressure is increasing on them to make a statement. Manitoba's premier has called this move "leveraging on the fears and hopes and the security of Manitobans".

UPDATE: Omnitrax responded to some of CBC's questions. Lots of finger-pointing on all sides.

Is it time to consider building a road all the way to Churchill?

Hudson Bay Railway For Sale

The Hudson Bay Railway in Thompson, MB

The CBC is reporting that Omnitrax is going to put their Churchill railway line (the Hudson Bay Railway) and the Port of Churchill up for sale. The president of Omnitrax Canada, Merv Tweed, has stated that the port and rail line will be sold together.

A sharp decline in grain shipments this year, and "expressions of interest on it in the last three to six months" led to the decision to put the pair on the market.

OmniTrax bought the railway line between The Pas and Churchill in 1997, the same year that they purchased the Port of Churchill. The line spans 627 miles and the Hudson Bay Railway interchanges with CN at The Pas and with the Keewatin Railway Company at Sherritt Junction.

VIA Rail's Winnipeg-Churchill train operates over the Hudson Bay Railway between The Pas and Churchill.

VIA Rail's Churchill train in Thompson, Manitoba

It remains to be seen if this is a serious attempt to sell the line/port, or a tactic to gain more government funding of the line or port. To me, this quote from Mr. Tweed is particularly telling: "If governments want that [the railway as a social service to the north] to continue, which I believe they do, then I believe they should be a participant in the costs of that and we've explained that very clearly to them. We've shown them the costs of doing business in the north and we hope they respond."

• CBC article
• Western Producer article
• Manitoba Cooperator article
• David J Gagnon post on the history of the Hudson Bay Railway

UPDATE: The port and rail line have been tentatively sold to a group of First Nations, who are looking for government assistance.

No Oil For Churchill

Omnitrax has announced that they are suspending plans to ship crude oil by rail to the port of Churchill, Manitoba. Citing increased traffic in grain and construction materials, as well as input from various groups, president Merv Tweed said "we decided it wasn’t necessary or in our best interests to pursue this any further."

Tweed said they will have five to seven shippers using the port to ship upwards of 700,000 tonnes of grain, up from four last year shipping 640,000 tonnes.

One wonders if the recent derailments on the line were a factor too. You might remember the almost month-long closure in June. There was another derailment this week that has VIA ceasing through service between Winnipeg and Churchill until the line is clear. VIA is still running between Thompson and Churchill, and between Winnipeg and The Pas, but not through the whole line. I understand the derailment is near Cormorant, about 35 miles northeast of The Pas, and eight grain cars are on the ground.

Omnitrax left the door open to revisit crude oil shipments, but I seriously doubt they will be able to go through with any oil shipments without some serious investments in the line.

Links:

• Omnitrax North
• CBC
• Winnipeg Free Press

Hudson Bay Railway to Re-Open

HBRY 3001 in Thompson, Manitoba

After a derailment on June 3, the Hudson Bay Railway closed the rail line between Gillam and Churchill. Omnitrax, the owner-operator of the line (and the port of Churchill), said that permafrost had damaged the line and they were making repairs and hope to re-open within the first week of July. They had briefly re-opened the line to freight service but had to suspend it again.

VIA Rail in Thompson, Manitoba

VIA Rail last sent a train to Churchill on May 30. The company said they will not send VIA 692/693 over the line until they are satisfied that it is safe for passengers. In the meantime, passengers intending to use the train have had to find alternate arrangements (aka "fly").

This closure has really impacted the people of Churchill, as they depend on the railway for the majority of shipments into the town. The only alternative is to fly fuel, food and other supplies in at a greatly increased cost. Hopefully the line will be re-opened when Omnitrax says it will.

This might really make people question whether they should still be considering shipping oil by rail.

UPDATE: OmnitraxNorth.ca has posted an update.

Video: The Pas - Churchill by train

I stumbled across this video featuring the Hudson Bay (VIA 693) from The Pas to Churchill. It features F units on the front end, and was filmed in October 1997. Most of the video is onboard, from a Park car. Great shots.