Churchill scrambles to attract global and domestic shippers as Wheat Board monopoly ends

BY GEOFF KIRBYSON

It would have been easy, some may even say wise, for the Town of Churchill to simply turn out the lights after Stephen Harper's government disbanded the Canadian Wheat Board (CWB) earlier this year.

After all, 95 per cent of every shipment that used to go through the Port of Churchill was CWB grain. Not only was the port a hub of activity, it was also one of the town's top-three employers.

But the certainty of guaranteed business ended after the feds dismantled the 76-year-old agency and its decades-long monopoly over western Canadian wheat and barley sales. The port has challenges. It is remote, operates only in warmer months, has only a limited short-line rail service, lacks all-weather road connections and has no national air service.

Instead of rolling over, however, town officials are stepping up to do everything in their power to ensure a long-term future for Manitoba's northernmost community.

Churchill Gateway Development Corp. (CGDC), which markets the port, is attempting to diversify its customer base and working to create a thriving hub where a wide variety of goods come and go to destinations as far away as Europe, South America and Mexico.

And despite some fears that the grain business would dry up, Jeff McEachern, executive director of CGDC, said that a federal incentive program for grain companies, which provides $9 per tonne to grain shippers, is almost fully subscribed.

That will bring the port's shipments up to 511,000 metric tonnes of grain this year, which is roughly on par with recent years.

But if movers and shakers in Churchill have learned anything at all this year, it's not to rely on Ottawa for everything ad infinitum.

Potash? Oil?

As such, McEachern is looking at opportunities to move potash, a red-hot commodity in neighbouring Saskatchewan, to Brazil or India while simultaneously working to attract imports of fertilizer products to be distributed throughout Western Canada.

And with congested oil pipelines convincing many oil and gas players to use rail to move crude from Western Canada to refineries, he's also hoping to persuade some of them to shift their activity to Churchill.

"I spend every waking hour looking at different opportunities. We're trying to develop long-term sustainability through diversification and make sure [the port] is a multi-commodity facility in the future," McEachern said.

Some of these possibilities are off the grid, to be sure. For example, there's rising demand in Europe for wood waste in saw mills because of coal-burning restrictions. The waste is compressed into a pellet and then burned to produce energy.

"They're trying to reduce the amount of coal consumed [in Europe] by 20 per cent between now and 2020. That's creating rising demand in wood pellets and that's a growth opportunity for us," he explained.

While global warming is definitely a risk in and around Churchill - polar bears are threatened because there is less ice on which they can hunt seals, for example - it also presents an expanded shipping season at the port.

So, why would somebody want to ship from the southern edge of Canada's Arctic? Simple: it's cheaper when dealing with a number of significant export markets.

McEachern said if you're sourcing grain from Saskatchewan, it's much closer to get to Churchill by rail than to Thunder Bay. And the northern shipping route - from Hudson Bay through Hudson Straight and north of Quebec to the Atlantic Ocean - is much quicker than going via the Great Lakes.

"People think about Churchill as being so far north but it's closer than you think for your goods' ultimate destination," he said. "Churchill is fewer sailing days to many export markets like Europe and Africa than Thunder Bay."

Whales and bears

If only those ships could bring tourists looking for polar bears and beluga whales, then Churchill's biggest industry would really take off. Sightseers flock to town in June, July and August to see the former and October and November to see the latter (hence, Churchill's long-standing proclamation that it is the polar bear and the beluga whale capital of the world).

The number of adventurous tourists, however, ebbs and flows with the economy, and right now the tide is low.

Tourism season is when Churchill's population peaks at around 1,200. According to the latest census, the town has about 925 full-time residents, down from nearly 1,000 in the previous census.

Realtor free

A declining population hasn't affected the realty business, however, because there aren't any realtors in Churchill.

If you want to buy or sell a house, simply turn on local cable channel 18 to see the local listings.

Albert Meijering, chief administrative officer for the town, agrees it was dealt a lousy hand by Ottawa. But, rather than crying over spilled grain, town officials decided to work with federal and provincial officials.

A report from a task force on the future of port activity, which began in June, is due this November.

Even though Churchill is remote, Meijering says the town can act as a year-round service centre for more than 8,000 people within a 700-kilometre radius.

That includes both northern Manitoba and Nunavut. The latter's mining industry, including projects in Baker Lake, Rankin Inlet, Halt Beach and the Kivilliq district, could be a veritable gold mine for Churchill.  "We are a natural choice for shipping goods to the mines as well as getting resources out," Meijering said. 

In June, the town also announced a new partnership with the Winnipeg Airports Authority, called Churchill Transportation Inc., which will work to realize the economic potential of its uniquely-equipped airport.

Military

Churchill's runway, at 9,800 feet, was built to military standards and is one of the longest in North America.

It is one of the few remnants left over from the days of Fort Churchill, when 5,000 military personnel were stationed there. The base may have closed in 1982, but there's still a regular Canadian Rangers exercise that takes place in Churchill every two years for two weeks. The Rangers are seen as the first line of defence for northern Canada.

 This summer, an "unannounced vessel" ventured into Hudson Bay and was pursued and apprehended by a frigate and Canadian Coast Guard vessel.

The joint training exercise was designed to demonstrate the military's capability to defend the sovereignty of the North, which is under increased pressure.

from Western Investor October 2012