Churchill | CNS Canada –– As its shipping season gets underway, the operators of Manitoba’s Port of Churchill are considering options for keeping the port viable going forward — especially as the end looms for its government subsidy.
Churchill has previously relied on the Canadian Wheat Board as its primary supplier of grain, but in 2012 the government deregulated the CWB’s single marketing desk for wheat and barley.
With the CWB now privatized and morphed into G3 Canada Ltd., Churchill has instead been receiving $25 million in government subsidies over a five-year period ending in 2017.
Merv Tweed, president of the port’s operator OmniTrax Canada, said he is appealing to different levels of government to continue the funding.
“They basically said we’ll think about it.”
OmniTrax has owned the port since 1997 — and that’s why the government is reluctant to continue funding, Tweed said, adding the company will make changes in order to continue funding.
“It’s like we have a sore arm, and they just want to fix the sore arm instead of the body that goes with it. We just feel that we’re important enough to the north.”
The port, he said, could open its books to the public if a partnership were to take place.
Another idea going forward, he added, may be to partner with First Nation governments.
The port employs mechanics, carpenters, millwrights and engineers, and if the port works with band councillors, the port would be able to hire more people from those communities, he said.
For now, the port is diversifying its traffic — starting with lentils.
The port opted to ship pulses as opposed to other commodities, because they are similar in nature to the grains Churchill already handles, Tweed said.
“I think, to diversify into much else, all we’re going to do is sacrifice one for the other,” he said.
Tweed said this year the port will move 75,000 tonnes of lentils grown in northern Saskatchewan.
Grain is moved from the port’s Prairie catchment area to Churchill over OmniTrax’s Hudson Bay Railway, running northeast from The Pas, Man.
Running a rail line in Canada’s north is costly, and much of that repair cost isn’t due to the cold, but rather to warm weather. A large stretch of the track runs over tundra, which softens as it warms.
“It’s a huge expense and it’s a continuous expense, even now,” Tweed said, noting the port’s budget runs up to $5 million.
“And I always say we’re one grain accident away from $10 million. It can add up very quickly.”
This year the port is working with four different shippers. The first load set to leave the port will be 36,000 tonnes of red spring wheat for Richardson International, bound to Africa.
The port has a grain handling budget of 500,000 tonnes per year, but Tweed said it may not meet that goal in 2015-16, though it will likely exceed 400,000.
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Transportation to and from the Port of Churchill for this article was provided by Hudson Bay Port Company.