Transport Canada moves forward with lawsuit against OmniTRAX Inc. over Churchill rail line

OTTAWA, Nov. 14, 2017 /CNW/ - The Government of Canada is committed to the people of Churchill and northern Manitoba. The Honourable Marc Garneau, Minister of Transport, announced that the Government of Canada will move ahead with legal action against OmniTRAX Inc. as the company has failed to resume operations on the portion of its Hudson Bay Railway Company line that runs from Gillam to Churchill, Manitoba.

Today, on behalf of Transport Canada, the Attorney General of Canada filed a Statement of Claim against the company for breach of contract. This legal action follows the notice of default Transport Canada sent OmniTRAX Inc. on October 13, 2017, which demanded that it complete all railway repairs and resume rail service within 30 days.

OmniTRAX Inc. did not fulfill its obligations under the terms of the contribution agreement it signed with the Government of Canada in 2008. Under the terms of the agreement, the Government of Canada provided $20 million in funding for the rehabilitation of the rail line between The Pas and the Port of Churchill, Manitoba. Transport Canada has paid out $18.8 million to date.

The agreement requires that OmniTRAX Inc. operate, maintain and repair the entire Hudson Bay Railway Company Line in a diligent and timely manner until March 31, 2029. It also specifies that the company must repay Transport Canada if it significantly reduces, discontinues, abandons or sells the Hudson Bay Railway Line.

Quote

"Our Government remains committed to the people of Churchill and Northern Manitoba and we recognize the importance of the rail line for the community. We also believe it is important to hold OmniTrax accountable and that is why we are moving ahead with legal action.  We are optimistic that interested buyers can develop a viable, sustainable business plan towards owning and operating the line. As such, we are moving ahead with legal action. We continue to support the Honourable Wayne Wouters, the Government's chief negotiator, in the ongoing discussions with OmniTrax Inc., interested buyers, and community leaders."

The Honourable Marc Garneau
Minister of Transport

Quick facts

• Over the past 20 years, the Government of Canada has provided over $27 million to OmniTRAX related to the operation of the Port of Churchill and Hudson Bay Railway rail line, through various contribution agreements. 
  
  
• The Government of Canada is actively supporting the community of Churchill to address immediate needs and resulting economic impacts. This includes supporting the community of Churchill through the temporary implementation of the Nutrition North Canada program, as well as actively supporting fuel resupply efforts, and economic development initiatives such as the $4.6 million Churchill and Regional Economic Development Fund.

SOURCE Transport Canada