(August 1, 2016) When it comes to the announced abandonment of the port of Churchill former Harper Agriculture Minister Gerry Ritz is manfully tweeting and twittering in an effort to create doubt and divert attention from the corpse of the Wheat Board hanging around his neck. He does this whenever another wreck happens as a direct consequence of killing the farmer-owned and operated Canadian Wheat Board.
Churchill, Manitoba, is Canada’s most northern sea port. The rail line servicing it is a life line to the remote communities on its route and the port itself has great strategic value for Canada’s northern sovereignty. This is particularly true in an era of global warming where the Arctic Ocean may well become this century’s Mediterranean Sea – a common ocean bordered by different nations and traversed by ships from many others.
Lately, the former Agriculture Minister with the help of his followers has been tweeting away at great lengths about the poor state of the Churchill rail link, its low speed, and the limited storage capacity of the grain terminal.
These are mostly red herrings. When the Wheat Board was marketing grain it filled the terminal over the winter so the speed on the rail line was not such a big issue. Since the port is only ice free for a short period its storage capacity, which is the other excuse the former Minister and his supporters are trotting out, does not make much difference to the amount of grain that can be run through the port. But hey, when you’re trying to avoid taking responsibility for the consequences of your actions, any diversion will do.
But these excuses raise some interesting questions. For example, the former Minister says Ottawa offered the owners of the Churchill rail line matching dollars for upgrades. Yet this is something successive Conservative Agriculture and Transportation Ministers let slide during the ten years of their tenure. In a tweet the former Ag Minister gave a ball park estimate of the cost of line upgrades at $200 million.
So why would a profit-oriented private company leave $100 million in free money sitting on the table, especially in an era of near zero interest rates? And why would the Harper Conservatives let it all slide?
There are two obvious explanations which come to mind why OmniTrax management apparently left all that money on the table. One would be that neither the rail line nor the terminal capacity was causing significant problems when the Wheat Board was sending grain through Churchill to premium Atlantic markets – so there was no compelling reason to upgrade. The other could be that OmniTrax’s management no doubt understood that without the Wheat Board they had almost zero chance of their terminal being used by the giants of the international grain trade for servicing the international grain market.
Much to the annoyance of the international grain trade, the farmer-controlled Wheat Board was ruthless about choosing the port that would yield the best returns for farmers. Unlike all the other players in the international grain trade, the Wheat Board was only interested in getting prairie farmers the maximum value for their crop and within its limits Churchill filled the bill.
Either way, it looks like OmniTrax management made a good call since up till now we know the members of the international grain trade have chosen to go for the low hanging fruit of expanding their existing facilities and further narrowing the shipping options open to prairie farmers.
After all once Churchill is gone, the alternative routes for grain from Manitoba and Eastern Saskatchewan are through the trade’s facilities at Thunder Bay and down the St. Lawrence Seaway or directly by rail to their existing deep water terminals along the St. Lawrence River – or perhaps south into their US facilities. All the routes are more expensive for prairie farmers who end up paying the costs. However, those farmer-paid costs are just more profits for the giants Gerry Ritz gave marketing freedom to.