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Churchill’s port will never be profitable

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05Aug

By: Graham Lane
Posted: Winnipeg Sun, August 5, 2016

Much has recently been written about the Port of Churchill and the rail line leading up to it.
The port and rail line, now 75 years old, has never been a profitable venture. The old
Canadian Wheat Board used its government monopoly power to buck the market and direct a
bit of grain through the port each year. But this was always done for political reasons. Let’s
put Churchill in perspective, in some of its best years it handled only week’s worth of work at
Vancouver’s port.

Let’s acknowledge that shipping grain through Churchill has never been about economics. The
port has always existed because of government largess and interference in natural market
flows.

Since the line was sold to OmniTrax successive federal and provincial governments have
funnelled hundreds of millions of dollars to keep the line and port open. The annual subsidies
to Via Rail and OmniTrax have been between $30-$50 million. Despite all the money spent to
keep the line operational, the rail bed itself is so weak that grain cars can only be half-filled
due to weight restrictions. The trains have to move at about 10 km/h in many places. Fixing
the track to deal with full cars would cost additional hundreds of millions of dollars. When do
we stop throwing good money after already wasted tax dollars?

We are told that the port now employs about 50 people, being perhaps the largest employer
in Churchill outside government. The town, current population about 750, once had 6,000
people. The town then had a US military base, a rocket range, and the port. The military base
is long gone, decommissioned in the 1970s. Churchill has no strategic military importance and
Canada has chosen Baffin Island to build its Arctic Deep Water Naval Base. Without the port
and the rail to it, Churchill is a small town relying on tourism.

It is time to end the myth of Churchill being a strategic asset for either grain shipments or the
military. Perhaps it has a future in more tourism and as a modest supply route to the north.
Could we justify the outlay of so much money for a unique cruise stop? There must be many
better ways of spending major public dollars.

We do need to have a public discussion on the future of Churchill. But our discourse should be
based on the reality of today. Grain shipments through Churchill are over. Accepting the loss,
hard as it may be, particularly for laid-off workers and other residents, it is time to move on.

None of the alternatives for the future of Churchill should require the rehabilitation of the
rail line. While conversion to a gravel road could be considered, even considering the
possibility of fixing the rail would, as a good public policy option, be unconscionable.
Taxpayers have spent enough on a grain-port dream that cannot be realized if prudent policy
is to finally have its day.

OmniTrax shouldn’t get more than $1, and feel lucky not to have to pay to get the chronic
money-loser off their hands. Premier Pallister had it right, say “no more”.

Graham Lane, a retired chartered accountant and chair of PUB, leads Manitoba Forward
(manitobaforward.ca), a developer and advocate for sensible public policies.

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