Skip to main content

Few places on Earth could claim such an array of eyeball feasts all at once.

It's a balmy zero degrees, mid-October in the sub-Arctic community of Churchill. Snow from the season's first blizzard has melted. And as a full moon peaks from behind clouds above the Hudson Bay shoreline, you can hear pack dogs howling in the distance.

The twinkling deck lights of the Monrovian-registered freighter Millennium Trader shine a few hundred metres across the darkened bay as the ship waits to load 28,000 tonnes of wheat bound for Mexico.

Then, with polar bears wallowing in frozen blueberry bushes not too far down the shore, Dene and Cree children squeal in sudden delight as a giant fireworks display erupts on the sandy beach behind Churchill's civic centre.

Meanwhile, in the harbour where the bay meets the open mouth of the Churchill River, the Estonian-registered freighter Gustav Sole loads 26,000 tonnes of Canadian-grown peas bound for Spain.

"I wonder what those Estonian sailors think," quips Manitoba Premier Gary Doer as he watches the fireworks.

"They probably think we light up fireworks every time a ship comes in," Foreign Minister Lloyd Axworthy says.

The fireworks are for the sailors, in a way. They are celebrating the official fact that a near record 700,000 tonnes of grain have been shipped through Churchill this year, twice last year's volume and the highest throughput since the banner year of 1977.

Between 1975 and 1994, various governments poured nearly $150-million into the Port of Churchill, but it was a losing proposition on a serious scale.

Then, three years ago, the government got out of the way (while helping pay for strategic infrastructure improvements), an entrepreneurial U.S. company got in, and the local rail line and port are on the verge of becoming profitable. This is a far cry from the mid-eighties when volume through Churchill dipped to 50,000 tonnes one year, and people were talking about abandoning the idea of a northern gateway to the sea.

Today, the politicians have come to Churchill, population 1,000, to make speeches and to receive thanks from executives at OmniTrax Canada Inc., the Denver-owned company which, thanks to a final $50-million in government investment and millions of the company's own money, is perhaps just a year away from profitability.

In 1997, OmniTrax bought the 1,200-kilometre-long Hudson Bay Railway Co. line, which runs from from The Pas, Man., to Churchill, from Canadian National Railway Co. And it bought the Port of Churchill from Ports Canada.

Three years later, it seems OmniTrax is the little company that could, where the bigger railway companies could not.

"Churchill is well on its way to seeing near-record volumes pass through with exports of a variety of commodities to Africa, Europe, the Middle East and South America," said Pat Broe, president of the Denver-based Broe Group, which owns OmniTrax. Town and company officials heaped high praise on Mr. Axworthy for his role in pushing forward the public-private partnership, naming one of Churchill's streets "Axworthy Way."

Unlike its larger sister ports at Thunder Bay, Ont., and Vancouver, Churchill has no port authority. Everything comes under the umbrella of OmniTrax and the company's various Canadian holdings: Hudson Bay Port Co., Carlton Line, Hudson Bay Railway and Churchill Marine Tank Farm Co. In all, OmniTrax owns and manages 13 short-line railroad subsidiaries in Canada and the United States as well as a leasing and locomotive repair company. OmniTrax officials have set a throughput goal of two million tonnes annually through the refurbished port.

They note that Churchill's location also makes it a strategic location for resupplying Nunavut: The petroleum terminal can store 50 million litres of gasoline, diesel, heating oil and aviation fuel.

CN always said it couldn't make a go of the Bay Line which runs over unstable muskeg, frozen tundra and which becomes sink-hole bound in the spring. But the line remains the shortest route to the sea for 25 per cent of Prairie farmers.

But since a major refit of the line and port OmniTrax officials have claimed that the cost savings in owning both line and port, combined with improved infrastructure efficiencies, offers a cheaper, more reliable service to grain producers and other shippers. OmniTrax claims farmers save $26 to $30 a tonne on grain moving from Saskatoon to Algeria through Churchill, compared with the cost of loading grain onto smaller lakers at Thunder Bay.

Storage charges and handling along the St. Lawrence system add to farmers' costs, they say, and Churchill is geographically closer to Europe. Similar savings for prairie farmers can be realized on shipments to Turkey and Russia, and $25 a tonne on shipments to Nigeria, Brazil and Mexico.

Churchill's harbour, operating since the thirties, has four deep sea berths, including one tanker berth and can handle vessels of up to 57,000 tonnes as opposed to Thunder Bay's maximum 23,000-tonne vessels. A $19-million dredging program will allow even larger classes of ocean vessels into the port, meaning wider marketing opportunities for Canadian Wheat Board clients, as well as those who market non-board commodities such as peas, alfalfa and lentils.

OmniTrax also is eyeing the possibility of shipping coal and potash through Churchill and wants to bring phosphorus and other cargo into Canada through the northern gateway. This year, the company is investing about $10-million in new locomotives, 50,000 new railway ties and additional upgrading of the Bay Line track.

A key to OmniTrax success thus far has been the conversion of Churchill's previously antiquated 140,000-tonne (five-million-bushel) elevator system to a fully automated grain loading system servicing 100-tonne grain hopper cars. CN claimed the railway line couldn't handle the heavy hopper cars and ran smaller, cumbersome boxcars instead. Each car had to be uncoupled, then turned over.

Some obstacles to Churchill's success remain, not the least of which is the short six-week shipping season. Great Lakes shippers also note that a vessel entering the Gulf of St. Lawrence has a choice of several ports to drop cargo or pick up more. This is not the case for a ship that has committed to going over the top of Quebec and into Hudson Bay. Such a vessel has no choice but to go to Churchill.

But this year, Churchill is cutting steadily into Thunder Bay's dominance as port of choice for European-bound and Latin American-bound grain exports from the eastern Prairies. The Canadian Wheat Board reported that in the week ending Oct. 8, 1,924 railcars unloaded at Thunder Bay, compared with 472 at Churchill.

Strong efforts are being made to extend the Churchill shipping season to Nov. 5 and to open by early July in the summer. For more than a decade, provincial officials have been attempting to convince Lloyd's of London to reduce the 15-per-cent insurance rate surcharge that it applies to shippers traversing Hudson Bay and the Hudson Strait. Bernie Boucher, OmniTrax Canada's vice-president of marketing, predicted the surcharge will disappear next season. "We know that if the premium is dropped and the season extended, there will be more business for Churchill and more business for Lloyd's."

Report an editorial error

Report a technical issue

Editorial code of conduct

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 10/05/24 4:00pm EDT.

SymbolName% changeLast
CNI-N
Canadian National Railway
+0.13%127.42
CNR-T
Canadian National Railway Co.
+0.09%174.21

Interact with The Globe