The owner of a damaged rail line connecting northern Manitoba communities to the South is filing a complaint against the federal government under the North America Free Trade Agreement (NAFTA), as Transport Canada says it plans on taking its own legal action.
On Tuesday, Denver-based OmniTRAX filed a notice of intent to submit a claim under NAFTA claiming Canada has breached Chapter 11 of the agreement, which protects foreign investors from discrimination.
It happened on the same day Transport Canada filed a lawsuit against the company alleging OmniTRAX failed to repair the Churchill rail line – known as the Hudson Bay Railway – which has been inoperable since May when flooding washed out portions of the track.
In an email to APTN company president Merv Tweed said: “We are disappointed that it has come to this, after having attempted countless times over the past several months to find a viable long-term solution to the challenges faced by the HBR and the Port of Churchill.
“We believe we have exhausted all available options to facilitate the repair and transfer of the HBR, Port and related assets. At every turn, our efforts have been stalled, obfuscated or ultimately sabotaged by the federal government. We view this NAFTA claim as a last resort.”
In the notice of intent, OmniTRAX said unless it’s given a “reasonable arrangement for repair and transfer of the HBR, Port of Churchill and related assets” it will seek up to $150 million for damages.
OmniTRAX would not provide additional comment on the federal government’s lawsuit.
“We are aware the federal government has filed suit and are in the process of reviewing the claim. As this matter is now before the courts, we do not intend to provide further comment.”
Damage to the rail line has left Churchill without its main form of shipping in food and fuel, which has increased costs for the community.
Due to winter weather, any repairs to the line are pushed to spring.
In a statement, Churchill Mayor Michael Spence said he’s happy the federal government is taking legal action but the government must also provide additional subsidies to offset the costs to ship supplies by air.
“It will now be more than six months before the rail line will be fully operational and during this time our communities are faced with unacceptable extra costs and unnecessary challenges,” he said.
“It is imperative that we continue to work with and receive additional support from governments to address these ongoing challenges,” said Spence.
The town is receiving subsidies through the Nutrition North Canada program.
During a town meeting held on Tuesday evening, community members raised concerns about the cost of food.
The town of Churchill is requesting representatives from the program visit the community to “review food prices and examine how the subsidies compare with other communities.”