Manitoba premier suggests Churchill port owners wanted government bailout

Manitoba Premier Brian Pallister hinted strongly Thursday that the Port of Churchill — the largest employer in the subarctic town of 800 — has been shut down because its owners, Omnitrax, were refused another government bailout.

Denver-based Omnitrax has not commented on its decision this week to close the seasonal port this summer and scale back freight shipments on the rail line it owns, which is the only land link to Churchill and three other northern communities. The company has also rejected interview requests.

Pallister, whose Progressive Conservative government came to power in April, released an agreement signed by the previous NDP government last year in which the province agreed to pay for capital upgrades at the port and provide a $3 per tonne subsidy for grain exports.

Pallister said the deal, which came with a confidentiality clause, was done to address threatened Omnitrax job cuts last year, and a similar request was made this year.

"They were rewarded for doing that last year by the previous administration, and I want to be clear, and today I'm making it clear, that they won't be rewarded on that basis this year," Pallister said.

He would not release details of the latest request, saying he didn't want to risk a lawsuit. He also blasted the former NDP government for signing a deal and agreeing to keep it confidential.

The port and rail line have been plagued by financial and infrastructure problems for years. Rail service is often slowed or disrupted because of the shifting, boggy northern terrain. The port lost its biggest customer when the federal government eliminated the Canadian Wheat Board's monopoly on western grain.

The NDP caucus, in a written statement, said it agreed to financial help for Omnitrax last year "to ensure the port stayed open while transitioning to a new sustainable ownership model."

New Democrat MP Niki Ashton, whose seat includes Churchill, is calling on the federal government to take over the port to ensure its survival. Ottawa operated the port prior to 1997, when it sold the facility to Omnitrax.

Omnitrax announced last year a tentative deal to sell the port and railway to a consortium of northern First Nations. Pallister said Thursday the potential sale is only one of several possible scenarios at this stage.

Pallister also left the door open to financial aid for the port and railway, possibly under new ownership. But he said he would not provide another short-term bailout to Omnitrax.

"We are not, as a government ... interested in entering into the business of subsidizing large corporations using money taken from small businesses and individual working people and families."