Port of Churchill layoffs could devastate northern Manitoba economy, ministers say

Layoffs at the Port of Churchill could have a devastating effect on the local economy and leave northern workers in a lurch if no solution is found soon, the provincial agriculture minister and Churchill's member of Parliament say.

News that dozens of workers at the port have been laid off shocked residents in Churchill on Monday.

The Public Service Alliance of Canada, which represents Port of Churchill workers, said 35 employees have been laid off. Dozens more who had hoped to get seasonal work also learned they won't be called in, Mayor Mike Spence said Monday.​

OmniTrax has not yet commented on the layoffs. The Denver-based company is Churchill's largest employer and has owned and operated the port and Hudson Bay rail line since 1997.

PSAC said the port employs 10 per cent of the local population of around 800 people.

Teresa Eschuk, vice-president of the union's local chapter, said OmniTrax "blindsided" workers and hasn't been communicating with union representatives.

"There was no discussion, no warning, nothing," Eschuk said in a statement.​

Niki Ashton, member of Parliament for Churchill-Keewatinook Aski, said the layoffs are a "devastating blow" that will be felt across her constituency.

"I would say that OmniTrax's conduct on this front is not just troubling, it's frankly unacceptable," Ashton said. "If there is an alternate agenda, I would say this is the wrong way and, frankly, a very sick way of going about it. I mean, people's livelihoods are on the line."

About 700 kilometres southwest of Churchill, The Pas Mayor Jim Scott said he too is concerned about local jobs. About 75 to 80 people in The Pas work for the railway and could be affected by the closure of the rail line, Scott said.

"That's going to have a major impact on the local hotel business, the local restaurant business, just economic activity in general," Scott said, adding a train carrying grain destined for Churchill has now been sent back to The Pas.

'Big loss' for grain farmers

The closing of the Port of Churchill also doesn't bode well for the province's grain producers, especially in a growing season expected to produce a lot of marketable grain, Manitoba Agriculture Minister Ralph Eichler said.

"That's a big deal for us. Any time we lose any operations, either short-term or long-term, [it's] a big loss for us," Eichler said. "As Manitobans, we are on the verge of a potential large crop."

The Manitoba Chambers of Commerce said the layoffs are a "troubling development" for grain buyers and the people of Churchill.

"At a time of the year where grain should be flowing from the port, this decision will hurt a community that relies on the economic spinoffs," the chamber said in a statement.

Grain exports through the northern Manitoba port have increased slightly in the past 12 years, according to the Canadian Grain Commission.

On average, about 514,000 metric tonnes of grain passed through the port in that time, largely to destinations abroad such as Mexico, Italy and Nigeria.

Ashton said while business was down in Hudson Bay in 2015, the strong crop expected to be harvested this year gave some farmers a sense they could ship their grain through the Port of Churchill and boost profits.

Port no longer a 'powerhouse'

The chamber said the layoffs highlight the importance of forming new business partnerships in the north and reinvesting in the port in a timely manner.

"The Port of Churchill is not the powerhouse port it once was and is not the only port shipping grain in this country," it said.

"The Manitoba Chambers of Commerce is calling on OmniTrax, all levels of government and the business community to come together and start the difficult but critical development of a long-term solution to this important asset to [the north] and all Manitoba. Time is running out to inject new life into the Port of Churchill."

OmniTrax, which has received millions of dollars in government shipping subsidies and grants over the years, put the rail line and port up for sale in January. The Manitoba government alone has invested $29 million into a joint venture with the company called the Churchill Gateway.

A group of northern First Nations, including Mathias Colomb Cree Nation, made an offer in January to buy the rail line to Churchill and the port, but the status of the purchase plan is not known.

Eichler also said it's time to start looking at "other opportunities" for the port.

"We never want to see a community devastated through the loss of a business, and that's why diversification is so important, but it was the major employer there and we are hoping that somebody picks that up — whether it be the First Nations or another entity," Eichler said.

The chamber wants a commission to be formed to review the state of transportation infrastructure in Manitoba and its impacts on development in the north. The commission would also be tasked with coming up with ideas to attract investors and develop a strategy for the port "as a strategic transportation hub for northern resupply, Arctic sovereignty and as an Arctic gateway to international markets."

Eichler said he has consulted with stakeholders on keeping the port open.

"The decision not to ship grain out, we as government take that very seriously and encourage the talks to go on," Eichler said.

Cliff Cullen, Manitoba's minister of growth, enterprise and trade, has spoken with OmniTrax and said the province has been told freight service will continue.

"We will continue working with our partners, with the Town of Churchill and all other stakeholders to provide a stronger economic future for the region," Cullen said in a statement, adding the province expects OmniTrax will respect grain shipping agreements for the 2015-2016 season.

Government intervention mulled

The layoffs have the Keystone Agricultural Producers (KAP), an organization that represents Manitoba farmers, calling for government intervention.

"We've had so many issues shipping our grain east and west to port, and this was an excellent option," KAP president Dan Mazier said in a statement. "If ever there was a case for government intervention, this is it."

Kenneth Sigurdson, a member of the Friends of the Canadian Wheat Board, said the closure of the Port of Churchill could have been prevented.

"I think it's quite unconscionable for a government, particularly the federal government, to just sit by and let this happen without taking some action," Sigurdson said.

Ashton said OmniTrax has benefited from public funds in the past and she wants the Trudeau government to take leadership on the issue.

Navdeep Bains, the federal innovation and economic development minister, said OmniTrax's decision to close the port and lay off workers is disappointing.

"I am in ongoing discussions with my cabinet colleagues and will continue to monitor the situation closely," Bains said in a statement. "My heart goes out to all the families that are affected."

Eschuk said something has to be done soon to bring Omnitrax to the table.

"The Port of Churchill is not just a place of work but an integral part of the town," Eschuk said. "The possible closure of the port could mean the end for a struggling northern community."