Agreement in principle has been reached for the transfer of ownership of the Hudson Bay Railway and the reinstatement services to Churchill in northern Manitoba by winter 2018, the federal government announced on May 30.

Short line group OmniTRAX purchased the 1 300 km HBR from Canadian National in 1997. In late 2016 it signed a memorandum of understanding for a possible C$20m sale to the Missinippi Rail consortium. However, freight and VIA Rail passenger services on the 300 km between Gillam and Churchill were suspended indefinitely in May 2017 after flooding caused catastrophic infrastructure damage.

Transport Canada demanded that services resume, as it believed OmniTRAX was in breach of a 2008 deal under which the government agreed to provide C$20m for rehabilitation in return for a commitment to operate and maintain the line until the end of March 2029. OmniTRAX filed a counter-claim for arbitration, arguing that the government had hindered its plans to develop the business.

In November 2017 the government announced that investment group Fairfax Financial Holdings had expressed interest in partnering with the Missinippi Rail and One North first nations consortia to acquire the HBR, Port of Churchill and associated assets. These partners have now been joined by AGT Food & Ingredients.

‘The people of northern Manitoba have long understood the value of the rail line’, said Jim Carr, Minister of Natural Resources on May 30. ‘This agreement in principle allows those most affected to have a direct stake in the future and long-term interests of their communities.’

President of Omnitrax Canada Merv Tweed said the short line group was ‘very pleased to see an agreement in place that will ensure the long-term operations of the rail line.’ OmniTRAX believes this is ‘the best outcome for all stakeholders’, Tweed said, and was looking forward to facilitating ‘a smooth transition of ownership.’