Transport Canada says it is taking legal action against the owner of the Churchill rail line.
The move comes after the government says OmniTRAX Inc. failed to get trains moving again on the Hudson Bay Railway Company line between the northern Manitoba communities of Gillam and Churchill.
Transport Canada alleges the Denver company breached a contract the two had by failing to meet an Oct. 13, 2017 ultimatum to resume 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,” the federal government said in a news release Tuesday.
“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. Transport Canada has paid out $18.8 million to date.”
Transport Canada says OmniTRAX is responsible for keeping the line operable until March 31, 2029. Or it must pay the money back.
Trouble with the track halted train traffic last summer. Residents say that drove up the cost of supplies and hurt tourism.
No one at OmniTRAX immediately responded to a request for comment. The company has said the rail line was damaged by flooding last spring.
There are no roads into the community that rings Hudson Bay. Visitors come by train or plane.