AGT Food and Ingredients part of Churchill rail and port deal


Could Western Canadian crops once again be exported through the Port of Churchill?

Owner Omnitrax has reached an agreement-in-principle to sell the rail line leading to Churchill and the Port of Churchill to a consortium that includes pulse exporter AGT Food and Ingredients, according to the federal government.

The Hudson Bay rail line has been closed since May 2017 due to flooding. Omnitrax has been looking to sell the rail and port for several years, and said it would not invest the tens of millions of dollars needed to fix the washed out track.

The buying group consists of Toronto-based Fairfax Financial Holdings, Regina-based AGT Food and Ingredients, Missinippi Rail Limited Partnership, and OneNorth. 30 First Nations and 11 non-First Nations communities in northern Manitoba, and seven Kivalliq communities in western Nunavut are part of the arrangement.

“The people of northern Manitoba have long understood the value of the rail line. This agreement in principle allows those most affected to have a direct stake in the future and long-term interests of their communities,” said Natural Resources Minister and Manitoba MP Jim Carr, in a news release late Wednesday.

Financial terms of the deal-in-principle have not been disclosed.

Fairfax is also an investor in AGT Food & Ingredients, having invested C$190 million in the company last summer.

Prior to water washing out parts of the railway in 2017, the port did not ship any grain in 2016, as Omnitrax laid off port employees weeks before the shipping season.

Before the end of the Canadian Wheat Board’s single desk in 2012, the CWB historically accounted for over 90 percent of the volume moved through the port. Annual volumes typically exceeded 400,000 tonnes, but despite a federal incentive program that coincided with the changes to the CWB, shipments dropped to under 200,000 tonnes in 2015.

While Churchill’s proximity to crops in northeastern Saskatchewan and northwest Manitoba is a geographic advantage, grain companies say they have been deterred from shipping grain through the port due to insurance costs of bringing ships into Hudson Bay, the short and unpredictable ice-free shipping window, and rail delays caused by shifting permafrost beneath the track. Many of these companies also have their own port assets with larger capacity in Vancouver or Thunder Bay. AGT itself recently signed a 20-year deal for a new port terminal to be built in Vancouver.

Related: The Challenges Facing the Port of Churchill — A Shipper’s Perspective

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