Churchill mayor blasts provincial plan to ship propane to community

The Manitoba government is making arrangements to provide and help pay for enough propane to keep the homes in Churchill heated through the winter, but Premier Brian Pallister says it's up to the federal government to take the lead on repairing the community's vital rail link.

And while both the premier and Infrastructure Minister Blaine Pedersen had harsh words for Denver-based Omnitrax, the current owner of the rail line and port, Mayor Mike Spence made it clear he doesn't think the province is doing enough to help to help his city.

​"This is about the absence of leadership of federal and provincial elected representatives to this ongoing emergency," the mayor said in an emailed statement following the province's announcement.

"The provincial plan to ship propane this winter means the province appears to have given up," Spence said.

The province will help make arrangements for a ship to transport propane, used by many homes in the town for heating, and subsidize part of the shipment's cost, Pallister said at a news conference Friday morning.

The province tapped energy company Stittco to ship the propane into the Port of Churchill, at an estimated cost of about $6 million, Pallister said.

The propane resupply plan is a safety measure in case the tracks don't get fixed in time, Pallister said. "We can't assume that we're going to get that rail line in and then be wrong."

Pedersen said the special containers the province plans to use need to be shipped from locations around the world to the port at the mouth of the St. Lawrence River, filled with propane and shipped to Churchill before winter.

"Time is of the essence because they have to get out of the ports, en route to Churchill before the end of September to make the shipping season," he said.

The rail line that the northern community relies on for supplies has been shut down since May 23 due to damage caused by severe flooding that washed out parts of the line.

Omnitrax, the Denver-based company that owns the line, said the tracks could be fixed by winter, but it can't pay for the repairs, which could cost up to $60 million. It's asking governments and First Nations to cover the cost.

During the news conference, both Pedersen and Pallister spoke critically of Omnitrax and the way it has conducted itself in the wake of difficulties with the railway.

"Frankly there are already legal issues around Omnitrax and its not-too-veiled attempt to devolve itself from any responsibility of the rail line and port," said Pallister.

Pedersen criticized Omnitrax for what he called a "huge window" for the estimated cost of the repairs.

"Really what our concern is that Omnitrax is using the people of Churchill as a pawn in whatever it is they're negotiating, trying to do here. And we don't feel that that certainly is not fair to the people of Churchill and to the people of Manitoba," said Pedersen.

Pallister said the province is willing to take care of Churchill's short-term needs by making sure they have enough heating fuel through the winter, but it's up to the federal government to take the lead on securing Churchill's long-term interests in the port and railway, which he said fall under federal jurisdiction.

"We are committed to ensuring the safety and security of the people of Churchill in the wake of losing the land connection and I want them to know that we will stand with them and help them to get through this," he said.

A spokesperson for federal Transportation Minister Marc Garneau released a statement, saying the foremost concern is ensuring people in Churchill have the supplies they need.

"Omnitrax has an obligation to repair and maintain its line and maintain service to residents, and we expect Omnitrax to meet its obligations," said the statement.

The outage of the rail line has made shipping supplies to Churchill more difficult and resulted in a variety of complications for the town of about 900 people on the shore of Hudson Bay.

On Thursday, Omnitrax apologized and rescinded a sudden price increase for gasoline, which shot up 30 per cent overnight.

The company had prematurely raised the price calculated for more expensive gasoline arriving by ship, rather than the cheaper fuel shipped to the community by rail earlier in the year.

Until the 200,000-litre fuel inventory shipped by rail is used up, the company will continue to charge the historical price for gas.

The rail outage has also made it more expensive to deliver food to Churchill. Shipments now arrive by plane. The federal government extended the Nutrition North food subsidy to Churchill in response to the rail outage.

Tour operators have had to make adjustments in the absence of the rail line.

Tourism companies are beginning to feel the pinch.

Daryl Adair, whose firm Rail Travel Tours books travel packages to Churchill, told CBC News he's already had to cancel dozens of reservations for beluga whale watching season. Now he fears he might lose the late fall polar bear season as well because the track to Churchill hasn't been repaired.

"No one from the Province of Manitoba has even looked into or discussed the effect [on] Manitoba on the tourism situation," Adair said.

"What can we tell our guests? The Province of Manitoba is deferring to the federal government and we really don't get any sense of urgency, on their part, of the millions of dollars lost in tourism and shipping through Winnipeg, of supplies to the territories."

Although Spence said the provincial Emergency Measures Organization and federal officials have helped secure supplies for Churchill, fixing the rail line would make these other measures unnecessary.

"It is imperative that governments immediately sit face to face and determine how repair work will be initiated. We can't understand why the premier is unable to get his ministers to meet with their federal counterparts immediately," he said in the statement.

Since 1997, the provincial government has given nearly $30 million in funding to Omnitrax for the operation of the rail line and port, including:

- $6 million as part of the rail/port transfer to Omnitrax in 1997.

- $900,000 for rail line maintenance in 2003.

- $2 million between 2004-2014 to support operations of the Churchill Gateway Development Corp.

- $20 million for the Bay Line Rehabilitation Project between 2008-2013.

- $820,000 in payments under the 2015 Agreement with Hudson Bay Port Company and Omnitrax.