Omnitrax ordered to repair Churchill's damaged railway line

The federal transportation regulator has ruled that OmnitraxCanadaabdicated its responsibility to repair the railway to the northern port of Churchill, Man., and must resume operation of the tracks "as expeditiously as possible."

The Canadian Transportation Agencyordered Omnitrax to begin repairs on the Hudson Bay Railway by July 3 andfile monthly progress reports beginning in August until the work is complete. The railway is the only land link between the south andChurchill and other remote northern communities, where prices have soared as goods have had to be flown in.

The Wednesday ruling came after acomplaint was lodgedby the provincialNew Democratic Party last year.A copy of the agency's findings was sent to CBC News late Thursday.

The regulator determinedthatOmnitraxhas a public duty to restore service and was not entitled to more thana "reasonable pause" of operation because of the unforeseen flooding that closed the track inspring 2017.

The Canadian Transportation Agency saysthe Denver-based companyshould have taken reasonable steps to repair the line by November 2017 the admittedly "ambitious" timeline first proposedby the engineering company, AECOM, that Omnitraxhired to assess the damage.

The regulatorsaidOmnitraxwould only have been relieved of its repair duties if it had followed the federal discontinuance process in advance.

In its justification, the transportation agency considereda2017 rulingthat found Canadian Pacific Railway could not be permanently relieved of its duty to provide rail service after a 2014 fire damaged theMarpoleBridge bridge near Vancouver. The railway company chose not to repair the bridge because of high costs.

Omnitraxcan file an appeal of this week's verdictwithin 30 days if the company wants to contest the ruling.

The companyexpects to announceits position early next week, an official said.

$40M-$60M repair estimate

Omnitraxofficialshaveadamantly refused to repair the tracks, saying the company can't afford the cost estimated between $40 million and $60 million and that the transportation lifeline should be treated as a public utility since the railway line is no longer commercially viable.

They claimed the flood was a "force majeure" event, an exceptional circumstance that curtails the firm's contractual obligations.

The Canadian Transportation Agency, however,dismissed the NDP's request that Omnitrax establish a $3-million compensation fund for the community, citing a lack of evidence.

Omnitraxhad wanted the NDP's application to the transportation agency to be tossed on a number of grounds, and arguedthepolitical partylacks standing to complain about the lack of rail service to Churchill.

The provincial government initially didn't support the NDP's application,describing the complaint as a form of "grandstanding" and "preening in front of the media."

Omnitrax has been ordered to start fixing the rail line to Churchill

6 years ago

Duration 2:13

Manitoba's NDP are calling it a victory, they filed a complaint with the federal transportation agency over the delays.

NDPLeader WabKinewsaid the provincial government, with its manyemployees and resources, should have demanded action.

"They threw up their hands. They said there's nothing that we can do," he said. "We stood up for the people of Churchill."

Railway's sale underway

The regulator's decisionmay be moot, however, because Omnitrax has reached an agreement in principle to sell the railway, along with the Port of Churchill, to a consortium of northern communities. The deal, which would leave the new owners with the responsibility for repairs, is expected to be finalized next month.

But ifOmnitraxdoes not relinquish the asset in time, its appeal would reach a federal court thatmay decide to award financial damages to the community, Kinew said.

He invited the provincial government to help, especially if a legal battle results.

Asked if his party would continue in the face of potential legal costs, Kinewsaid, "We're going to continue standing up and following this through to conclusion."

The provincial government declined Friday tocommentand instead directedqueries to the federal government, since railways are a federal responsibility. Transport Canadasaid it has long held the view that Omnitraxis obligated torepair the line.

Churchill Mayor Mike SpencetoldCBCManitoba's Radio Noon on Friday that theregulator's decision doesn't affect the consortium's plans to buy therailway back.

"Once we get that done, it's on to prosperity."

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