Trouble on the tracks

When Churchill’s train doesn’t come, local business takes a hit.

June and July should have been busy months for Churchill’s tourism operators. During a normal summer, tourists disembark from Via Rail’s twice-weekly train from Winnipeg and climb onto zodiacs for beluga whale watching tours in Hudson Bay. The polar bears, for which the town of just over 800 is world famous, are beginning to prowl again.

But this was not a normal summer for Manitoba’s northernmost community, whose only terrestrial connection to the outside world is in the form of the Hudson Bay Railway, an 820-kilometre line that threads its way through forest, muskeg and tundra from The Pas to its terminus at Churchill.

Instead, a freight train derailment in early June, when 13 grain hoppers jumped the tracks 32 kilometres south of town, triggered a chain of events that’s meant a nightmare summer. For nearly two months, Via Rail suspended service while Colorado-based OmniTRAX, which owns the Bayline (as the line is sometimes called), scrambled to bring the aging tracks back up to Via’s standards. When train number 692 left town May 31, no one knew that it would be the last Via train they’d see until late July. The line was closed completely for nearly two weeks as OmniTRAX dealt with what it called “severe permafrost issues and its effect on railway surface conditions.” Freight service was haltingly restored, then suspended again, and finally returned to its normal schedule in mid-July.

OmniTRAX president Merv Tweed says the track problem was caused by large heaves of permafrost that thawed during the especially hot summer in northern Manitoba. OmniTRAX crews basically rebuilt the entire rail bed. “We go out and put ballast rock underneath the tracks, tamp it down until it solidifies and built it up from there,” Tweed says.

Via Rail spokeswoman Mylene Belanger says the Crown corporation would only resume service when it was sure it was safe to do so. “Under no circumstances will we compromise passenger safety,” she says. “This [situation] is beyond our control.” Via sent its own inspectors to examine the line in mid-July. They gave the all-clear.

In June and July, Via service averages 1,100 passengers per month, vital oxygen for the Churchill tourism industry. “Every day there isn’t a train coming in, you’re losing money,” says Louise Allen, who owns Sea North Tours with her husband Dwight. “We’re still running tours, but for two people at a time. You’re not breaking even.” She estimates the Via outage has cost her stable of businesses, which also includes the Polar Inn and Suites and a car-rental agency, thousands of dollars.

It could be worse. Sensing an opportunity, Manitoba’s Calm Air has started offering flights to Churchill from Thompson—the nearest major centre—for $250 return, less than half the usual fare. “That is a wonderful gift” that’s saved the tourist season from being a total writeoff, Allen says.

At Churchill’s Tundra Inn, owner Belinda Fitzgerald has spent most of June and July scrambling to alert pre-booked guests that there’s no passenger train service. She estimates she’s been able to save three quarters of her bookings by giving them the heads up. Still, she has staff at the 31-room hotel and restaurant sitting idle for lack of work.

Fitzgerald says that even though the freight trains are running again, they generally arrive a day late, which has wrought havoc for the restaurant, which opened a week late thanks to a lack of supplies. While some businesses have taken to flying in cargo, the expense for Fitzgerald just wasn’t worth it. “If we’d had to fly stuff in we would have had to close our doors just because of the cost.”

While the railway and the connected Port of Churchill are the town’s very reason for being, they’ve also been a spectacular white elephant for the federal government and successive owners since the late 1920s. They began life when the federal government of the day decided Canada needed an Arctic port to ship wheat to Europe. Almost at once, the Bayline was ridiculed as a railway to nowhere, wrote David Malaher in Manitoba History, especially after the government abandoned construction of the original port site at Fort Nelson in favour of Churchill. “I condemn in absolute terms the undertaking in which we are now engaged,” one of the project’s engineers wrote to a superior at the federal Department of Railways and Canals. All told, Ottawa spent more than $20 million ($270 million in today’s currency) on the project.

To this day, the railway traverses Canadian Shield, taiga and tundra. The area of the latest derailment has long been troublesome. “The last 154 miles over the watershed between the Nelson and Churchill Rivers [was] built almost entirely on muskeg with an underlay of permafrost,” wrote Leonard Earl in the journal of the Manitoba Historical Society in 1957.

The Bayline was part of the Canadian National network for decades, and enjoyed a guaranteed cut of grain traffic from the Canadian Wheat Board, which used Churchill to ship to Europe. But CN was privatized in 1995 and almost immediately began looking to unload the Hudson Bay Railway. In 1997, OmniTRAX, a Denver-based shortline railroad company, bought the railway for $11 million. It also purchased the Port of Churchill from the federal government, which was then engaged in a large-scale, nationwide divestiture of publicly-owned docks, for a measly 10 bucks. In 2008, OmniTRAX, the federal government and the Province of Manitoba each put up $20 million for track upgrades along the line. OmniTRAX says it’s spent a total of $110 million on improvements. “I don’t want to be critical of the way the line was run before, but there was a lot of money that needed to be invested,” Tweed says.

The company has also mused about shipping oil by rail through Churchill, although the Manitoba government opposes the plan. OmniTRAX already ships a small amount of diesel for local consumption, but had planned to ship a test run of 330,000 barrels of Bakken crude oil this summer. Instead, Tweed says, OmniTRAX will focus on a glut of Western Canadian wheat and exporters looking for access to markets in Europe and Africa. “My thought behind moving away from oil is to seize the opportunity that’s directly in front of us,” he says.

For Churchill residents, this summer’s problems are just the latest indignity. There’s a lingering sense in the community that cash-strapped Via would like to get out of money-losing remote services like Churchill. Allen says neither Via nor OmniTRAX did a good job keeping the town informed of what was happening. “It’s a terrible thing for everyone in the tourism industry,” says Sea North’s Allen. “And for everyone who saved their hard-earned money to come here.” 

Up Here Business, September, 2014.


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