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  • Churchill’s future up in the air but remains perpetually promising

    Posted on: February 4th, 2018

    By Keith Norbury

    Churchill Home Building Centre put in a big order for about $1 million of stock early this spring in anticipation of a good year, said Dale De Meulles, a lifelong resident of the remote Manitoba town who co-owns the store with his wife Rhoda.

    Buoying his optimism were a flood of inquiries from customers in even more remote communities in Nunavut to buy much of that stock. The good news was that the store received its stock before severe flooding in late May wiped out sections of the Hudson Bay Railway, the sole land-link connecting Churchill with the rest of the continent. The bad news is none of those inquiries from Nunavut turned into orders. As Rhoda De Meulles explained, the northern customers didn’t bother sending barges to Churchill because the railway wouldn’t be able to deliver their other supplies. Instead, those Nunavut communities turned to shippers in Montreal.

    “Even though I had merchandise here, they said it wasn’t feasible for them to come because we didn’t have enough to justify the cost of every shipment,” Ms. De Meulles said.

    While their store is overstocked for the winter — its inventory included 327 car batteries for a community of fewer than 900 people — many products, noticeably food, are in short supply and now have to be shipped in by air at huge cost. A four-litre jug of milk, which had already been expensive by southern standards, now fetches about $18, Ms. De Meulles said. As another example, the air freight cost for a hot water tank is $176 compared to $33 by train.

    Such costs are something Churchill residents are going to have to bear for the foreseeable future. The railway’s Denver-based operator, OmniTrax Inc., and the federal government were engaged in a Mexican standoff over repairing the rail line and getting it running again. (See related story.) Transport Canada has threatened to sue OmniTrax Canada for $18.8 million if it doesn’t repair the line by Nov. 12. Meawhile, OminTrax is claiming that force majeure — an “act of God” — frees it from its contractual obligations. In early October, the company said it planned to spend $5 million to $10 million to temporarily open the line within 30 days to handle light loads of freight, CBC reported at the time. At deadline, those repairs had yet to begin. The federal government “takes the loss of the rail link seriously and is deeply concerned that OmniTrax Inc. has not yet commenced repairs,” a Transport Canada spokesperson told Canadian Sailings on November 7.

    “We fear that nothing’s going to happen for awhile,” said Ms. De Meulles, who for 35 years has worked at the hardware store, which she and her husband bought 15 years ago. “And that’s a horrible feeling.”

    Flood revives talk of Churchill’s prospects

    Aside from causing a lot of finger-pointing about who is responsible for fixing the rail line, the flood has revived discussion about Churchill as a strategic Arctic port and transportation hub. In recent years, Churchill has been promoted as a gateway to Europe and Asia — and as a means to move minerals from mines yet to be developed in Nunavut, oil and bitumin from Saskatchewan and Alberta, and grain from Prairie farmers. Of those, only grain shipments have ever been realized, and they stopped in 2016 when OmniTrax shut down the port. Various studies in recent years have examined Churchill’s potential as a transportation hub for northern Canada. Among them was a 2007 analysis of an ambitious proposal to build a $1.4 billion all-weather road network linking Nunavut as far north as Rankin Inlet with Churchill and southern Manitoba. Such a network would ultimately connect with the national highway system. While that study identified a technically feasible route, and while such a road had widespread support from First Nations in the area, a subsequent analysis found that the road’s costs would outweigh its economic benefits, CBC reported in 2012.

    A 2013 Future of Churchill federal-provincial task force report reached a similar conclusion: “While significant public benefits could accrue from the development of an all-weather road, the significant cost — currently estimated at $1.4 billion — and the very long planning and construction horizon of more than 20 years make this project challenging to undertake in current economic circumstances.”

    If there’s a prevailing view among those who’ve examined Churchill’s future, it’s that climate change is expected to make the town more viable as a port by adding up to two months to the shipping season. On the downside, the same forces that will melt Hudson Bay ice will also wreak havoc on the permafrost, making land links more difficult to build. Catastrophes, like the flood that shut down the rail line this spring, would also become more likely. In any event, it appears doubtful that Churchill will ever revisit its glory days of the 1950s and 1960s — when it had five times the population of today and was supported by a nearby military base and rocket research range.

    Alternative transport ideas floated

    Dr. Barry Prentice of University of Manitoba said a revival of Churchill isn’t a moribund idea, given the potential prospect of a six-month shipping season and its ability to handle larger ships — up to Panamax size — much larger than the handysize vessels that are the largest capable of traversing the St. Lawrence Seaway and Great Lakes. “I think these things have their day and they go in cycles and certainly the warming of the climate favours the port,” Dr. Prentice said of Churchill. “It doesn’t necessarily favour the railway.”

    What he favours is an all-weather road to connect Churchill. “The truth is that you don’t have to have a railway to have a port,” said Dr. Prentice, a professor of supply chain management at the university’s I.H. Asper School of Business, and a former Director of the Transport Institute at the university. “Two of the biggest ports in the world are Hong Kong and Singapore and neither has a railway.”

    On the other hand, a railway without freight isn’t feasible because of the expense of maintaining it, Dr. Prentice said. A year-round road connection to Churchill would also break up the monopoly of the railway because trucking companies using the road would compete for freight. It would also enable tourists to drive to Churchill to see the polar bears, beluga whales, and other wildlife. “It’s what we call rubber-tire tourism,” Dr. Prentice said. “People drive all the way to Alaska. Surely, Churchill’s a lot closer for most people.”

    The Alaska Highway is paved all the way to Fairbanks, just 190 kilometres from the Arctic Circle in the heart of the Alaskan peninsula, where it connects with another paved highway south to Anchorage.

    When he first arrived in Manitoba 45 years ago, Dr. Prentice looked at a map, saw a road to Gillam, and wondered why the road wasn’t pushed all the way to Churchill. “And the answer I got was, well, it’ll kill the railway,” he said. Today, the road to Gillam also needs upgrades. “And that leaves a gap of about 300 kilometres to Churchill.”

    Then again, as he has done in the past, Dr. Prentice floated air ships as a cheaper and more efficient way to bridge that gap and move freight into the north. “Cargo airships is what we need to open the north up and it would reinforce a place like Churchill,” he said, envisioning Churchill as a way station for airship cargo that would also arrive and depart by ship or rail. Rather than taking a short-term view, Canada’s leaders need to imagine what the transportation needs will be far into the future, he said. “We expect Canada to go on forever. So you have to ask yourself, where are we 1,000 years from now?”

    Polar bear seekers not dissuaded

    One the main bright spots in recent years for Churchill has been tourism, most famously in the form of well-heeled visitors flocking to the area to catch a glimpse of polar bears. So far, the loss of the rail line hasn’t dissuaded those tourists. It’s an open question, though, if Churchill’s tourism industry can sustain that momentum — and sustain the town — without a land transportation link. Churchill’s population stood at 899 according to the 2016 Census. That was up from 813 in 2011. But the 2016 Census was taken before OmniTrax closed the grain terminal in July 2016. And since the railway was shut down, Ms. De Meulles said she knows of about 20 people who have already left town because of a lack of work and the soaring cost of living. She and her husband used to employ 12 to 15 people at the hardware store, but had to lay all of them off. “They’re not able to find other jobs,” said Ms. De Meulles who came to Churchill 38 years ago to find work. “They have to go on Unemployment Insurance – that’s the only way they can survive right now until, hopefully, things will pick up.”

    No shortage of studies

    In recent years, researchers, engineers, and governments have examined Churchill’s potential as a northern transportation hub. Chief among them was a task force established in 2012 by then Prime Minister Stephen Harper, a Conservative, and Manitoba Premier Greg Selinger, a New Democrat. It focused “on commercially-viable opportunities that are not contingent on additional public-sector spending” and that “the private sector should be the principal driver in pursuit” of the opportunities the task force identified, noted its 60-page final report released in January 2013.

    Opportunities cited in that report included the following:

    • maintaining the viability of the Hudson Bay Railway,

    • pursuing extensions of the shipping season to enable larger volumes of grain and other commodities,

    • diversifying shipments to include potash,

    • increasing trade with Nunavut,

    • shipping light sweet crude by rail to Churchill,

    • exploring the feasibility of supplying liquefied natural gas to the north,

    • developing an “Arctic safari experience,”

    • assessing the potential for an all-weather road linking Manitoba with Nunavut, and, subject to environmental risk assessment,

    • building a pipeline to carry oil and bitumen to Churchill for export.

    The report also pointed out the giant challenges in developing Churchill and the north, such as “insufficient infrastructure to meet the expected demands of economic development”, and that addressing those needs “will require a concerted effort involving the public and private sectors.”

    Or government spending

    It’s not as though the federal and Manitoba governments haven’t already poured cash into such efforts. From 1997 to 2017, the two governments had spent or were spending a total of $197 million on Churchill. Of that, the feds paid $124.9 million. Of the overall total, $50.5 million was for the port and rail transfer to Omnitrax, and another $48 million was for rail line rehabilitation and port upgrades. Grain shipping incentives accounted for another $25 million. Rail- and port-related expenditures (including the grain incentives) added up to $129.4 million.

    Of all the opportunities, those involving oil are likely to prove the most controversial. Ms. De Meulles said she would welcome an oil pipeline to Churchill as would most residents. That’s the opposite of what Churchill Chamber of Commerce President and owner of Wapusk Adventures Dave Daley told CBC News this summer after Jeff Callaway, a candidate for the leadership of Alberta’s United Conservative Party, proposed that his province buy the Port of Churchill and make it a terminus of a pipeline. “He’s the only one who feels that way,” Ms. De Meulles said of Mr. Daley. “Everybody else here in Churchill seriously thinks if that happens, Churchill will get back on the map again … because right now we don’t feel like we’re on the map.”

    As far as oil is concerned, OmniTrax was exploring that as well. The task force report noted optimistically that the railway might begin trial shipping of light sweet crude in the summer of 2013. “The potential further exists to pair outbound oil movements with backhaul import of diluent to the Alberta oil sands region.”

    A barrier to that is the draught of the port, which at low tide isn’t deep enough for oil tankers, the task force report noted. Oil shipments also require heavier cars than the railway is suited for. Then again, the report said, “the price differential between ‘land-locked’ crude oil versus east coast refinery points may serve as an enticement for the private sector to invest in the Port to facilitate this opportunity.”

    Coast Guard presence lacking

    Given the history of recent oil pipeline proposals in Canada, one destined for Churchill is bound to encounter stiff opposition. And for ammunition, opponents can turn to a recent University of Manitoba report on climate change in the Hudson Bay complex that called the bay “particularly vulnerable to a potential oil spill.” That report, by the university’s Centre for Earth Observation Science, also said the port’s shipping operations are “vulnerable to adverse weather” and that those operations “may be rendered more vulnerable by a lack of hydrographic data” as well as the limited search and rescue capability of the Canadian Coast Guard in the area. “There is some concern that Canada is not equipped to handle the increased traffic volume in Arctic waters. Specific attention has been focused on the Coast Guard’s fleet of icebreakers and whether they are capable of meeting current and future user needs in the Arctic,” the report said, citing a 2014 report from the Auditor General of Canada. Among the roles of Canada’s six ice-breakers in the Arctic is to assert Canadian sovereignty in the region. But during winter, the nearest ice-breaker to Hudson Bay is stationed off the Newfoundland coast, the report said.

    Churchill has the potential to serve as a port for bulk potash shipments, given its proximity to mines in Saskatchewan. One barrier to that is the major mines already own Canpotex, a network with its own terminal in Vancouver. “Any opportunity to export potash may have to exist with independent mines that would operate outside the Canpotex network,” the 2013 Churchill task force report said.

    Serving new mining operations in Nunavut presents another opportunity, the report said, noting that “a single gold mine, for example, can require between 40,000-50,000 tonnes of materials annually during construction, and 20,000- 25,000 tonnes thereafter during the life of the mine.” In comparison, the average annual resupply that Churchill has handled for Nunavut in recent years totalled around 10,000 tonnes.

    Unfortunately, supply chain service issues damaged the reputation of the port’s owner, which “resulted in loss of business” to Nunavut, the report said. A “dearth of surface transportation infrastructure” and volatile commodity prices will mean that only the richest finds will become commercially viable because the mining firms will have to pay for “their own transportation infrastructure,” the 2013 task force report said. Even building a winter road would be costly and “require commitment from both the private sector and governments over several years” to assess its benefits.

    The case for an all-weather road

    But, a road from Gillam to Churchill is feasible, said University of Manitoba engineering professor Dr. Marolo Alfaro. He estimated that such a road would cost about $2 million per kilometre — or about $600 million for its 300-kilometre length. That’s less than the nearly $3 million per kilometre for a 130-kilometre all-weather road between Inuvik and Tuktoyaktuk that was due to open to traffic on November 15.

    Dr. Alfaro wasn’t involved in designing the Tuktoyaktuk route. But for the last two and half years, he has been undertaking measurements of synthetic reinforcing material that were placed on parts of road. Data from those measurements, which looked at such things as sloughing and drainage of the road bed, could help improve the design of a future road to Churchill.

    One key difference between a proposed Churchill road and the one out of Inuvik is that the northern route has the benefit of continuous permafrost for its entire length. A road south out of Churchill would cover continuous permafrost for only its northern half. In the southern part, the permafrost is intermittent. That means parts of the route would go over terrain that becomes unstable as it thaws. “Another problem in northern Manitoba is that we have peat bogs,” said Dr. Alfaro. “Northern Manitoba is underlain by peat or muskeg that is very compressible and low strength. So it just sinks if it’s not frozen.”

    Dr. Alfaro has also been using instruments to measure roads built over peat in another part of Manitoba. For that, he has adapted a 16th century technique, know as a corduroy road, which uses timber to support the roadbed. In his case, however, rather than placing the timbers underneath the roadbed, they are positioned at the toe of the road to contain the fill material. Dr. Alfaro is hopeful his research will aid in designing roads in the north that take into account the effects of climate change.

    “That’s why we are taking measurements, temperature measurements, both in the foundation and the fill material. We want to calibrate the model that we’ll be developing. Once we have confidence in our numerical model, we can use that model to design highways that take into account climate warming in different scenarios,” said Dr. Alfaro, who has also been researching ways to improve the reliability of the Hudson Bay Railway line.

    Stephanie Puleo, interim Executive Director of Churchill Northern Studies Institute, 23 kilometres to the east of Churchill, sounded lukewarm to the idea of a permanent all-weather road, however. “I know there would definitely be a lot of concern it because maintaining a road would be a lot of trickier than maintaining a train rail line,” Ms. Puleo said.

    Road would “dramatically alter” the community

    According to an interim Sustainable Churchill report prepared following a November 2010 Arctic Gateway Summit in Winnipeg, many Churchill residents feel that a road would inevitably alter the community of Churchill dramatically. Younger people tended to be more in favour, the report said. Benefits cited included economic development associated with mining, the port, and tourism. Concerns included “making Churchill more vulnerable to gangs and drugs.”

    For many residents, though, the port is Churchill’s greatest asset, Sustainable Churchill said. Dredging the Churchill River in the vicinity of the port would allow vessels of deeper draughts to enter the channel, “potentially broadening the market served.”

    People would also like to see a marine biology lab built on Hudson Bay. It was also suggested that the former naval base could be made into a fish farm to rear arctic char, pike, and other species.

    Residents also recognized “the importance of and their essential dependence on the railway,” although some expressed criticism and dissatisfaction with foreign ownership of the line and the port, the report said. Elden Boon — President of the Hudson Bay Route Association, a non-profit organization that advocates for the railway as regional asset — said building a road would simply be too costly compared with the cost of repairing the railway. “I just don’t see the merit around that when you’ve got a rail line that just needs to be repaired and you’re back in business,” said Mr. Boon, a farmer from Virden, Man.

    Transport Canada spokesperson Annie Joannette skated around questions about a proposed all-weather road to Churchill, saying Transport Canada is committed to the restoration of rail service. She also acknowledged a proposal to build a winter road to ship supplies into Churchill. Mark Kohaykewych, President of Winnipeg-based Polar Industries, the company proposing to build the road, didn’t respond to an interview request. However, he told CBC News in October that his company — which would develop the road in partnership with the Fox Lake Creek Nation and Churchill-based Remote Area Services — would use tracked- or large-tired vehicles such as tundra buggies to haul supplies on enormous sleighs. “This is a primitive form that was used in the ’70s by many companies to transport goods to remote communities and we’re going to go back to that, pulling cat-trains and sleighs into Churchill,” Mr. Kohaykewych told CBC.

    Ms. De Meulles said in early November that her preference would be for a proper ice road to be built to enable all vehicles to use it over the winter. At present there is no such road.

    The fundamental challenge

    The big question then is how does Churchill realize its potential as an international shipping destination, transportation hub for the north, and conduit for commodities exports when building the necessary infrastructure might cost billions of dollars? “That’s the fundamental challenge,” said Dr. Jino Distasio, director of University of Winnipeg’s Urban Studies Institute. “But the rail line has for decades provided that critical link. Yes, we had a catastrophic event, and we’re at a critical stage where those repairs do need to take place. But we do still have the infrastructure there.” Once that’s back in operation, energy can be directed to upgrading the line as well as re-establishing resupply links to Nunavut, said Dr. Distasio, who participated in the 2010 Arctic Gateway Summit and co-authored the interim report. Losing that business to Quebec ports resulted in “a huge economic impact” for Churchill as it has tried to diversify its economy, Dr. Distasio said. “It’s going to be hard to win that back.”

    One of the big ideas the summit explored was an Arctic shipping bridge to connect Churchill with Russia port of Murmansk, a city of 300,000 people on the Arctic Ocean. A few years ago, OmniTrax was also promoting Churchill as a gateway for moving project cargo between Canada and Asia. But references to that scenario have since been scrubbed from the OmniTrax website.

    In 2011, Dr. Destasio’s institute prepared a Churchill Sustainability Planning Framework that outlined the challenges of the community in detail. “Many of the issues related to the town’s economic and social sustainability relate to the fact that in some ways it is no longer the hub that it once was: it is no longer a military base and its loss of population has occurred at the same time that other northern communities have developed larger populations and capacities of their own,” the report said. “At the same time, Churchill still remains an important shipping node and major tourist destination, and both of these major functions stand to be affected by climate change.”

    The town also faces “several pressing environmental issues,” including a threat that climate change will wipe out the polar bears and the tourism that they attract. Also of concern is an Aboriginal population that “is still recovering from a legacy of displacement, residential schools and isolation.”

    The report recommended a “holistic approach” to Churchill sustainability even as it recognized the broad scope of the challenges. “Whatever the future may bring, a strong and resilient community that understands its needs and resources, and whose members know how they can work together, is in a better position to deal with threats and gain benefits from opportunities,” were the report’s last words.

    Dr. Distasio expressed similar sentiments himself, informed by long ago visits he made to Churchill, which he described as “a jewel” of Manitoba and Canada. “It’s not just a place where people come to see polar bears but is a place that can have immense commerce and immense potential,” Dr. Distasio said. “But,as a country, where is that we’re going to invest strategically? I think in the north, and Churchill presents one of those important options.”

    For third-generation Churchill resident Dale De Meulles, the community is “like a planet” of its own. Like many of his fellow residents, he doesn’t care for city life, preferring instead the joys of the vast outdoors, such as snowmobiling to his cabin. And no matter what happens to Churchill’s transportation networks, he doesn’t plan to leave. “Like I’ve said a hundred times, I’m not going to quit.”