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Privatization and the Port of Churchill

During the 1990s when the federal Liberals were moving quickly to privatize the country's railways, the Port of Churchill was also put on the table. The Port, consisting of a grain terminal, wharf, rail yard and harbour, was opened by the federal government in 1931 to provide Prairie farmers with direct sea access, which facilitated grain shipments to Europe.

In 1997, with much fanfare, OmniTRAX Canada Inc. took over the port and the rail line that serves it. OmniTrax, based in Denver, is the largest privately-held rail services company in North America and is an affiliate of the U.S. multinational The Broe Companies. OmniTrax promised it would be able to operate the port of Churchill more efficiently and at less cost than the federal government.

Shortly after the port was sold off, OmniTRAX received $50 million from the federal government which it used to upgrade the rail line, dredge the port and modernize Churchill's grain handling facilities.

According to OmniTRAX and the Chretien Liberals, plans to increase the volume of grain moving through the port were well underway. However, two consecutive years of severe drought in 2001 and 2002 cut in half the amount of grain shipped through the port, and OmniTRAX has not been able to deliver on its promise to diversify the crops shipped through the port.

While the shipping season for the Port doesn't begin until around July, OmniTRAX threatened as early as March that without additional government financial assistance, it would not open the Port for the 2003 shipping season.

Gary Doer's NDP government was quick to respond to the company's blackmail, pledging $1.2 million in emergency assistance for the port in the April budget. The federal government is also rumoured to be considering a bailout for OmniTRAX in the amount of several million dollars, money in part finessed through the presence of former Liberal cabinet minister Lloyd Axworthy on the port's advisory committee.

In other words, OmniTRAX is receiving significant public money to operate a facility built and upgraded with public funds - another privatization success story.