Canadian Transportation Agency continuing investigation against Omnitrax
Dylan Robertson and Nick Martin
Winnipeg Free Press
02/3/2018 3:00 AM
OTTAWA — The national transport regulator is continuing its investigation against Omnitrax over whether it broke federal law by abandoning its railway to Churchill, after rebuffing the company’s attempts to have officials shelve the probe.
Documents released by the Manitoba NDP, which is the complainant in the investigation, show the company tried arguing its Hudson Bay Railway is a separate entity from Denver-based Omnitrax, which also claimed the political party didn’t qualify as a complainant because it isn’t directly impacted by the railway disruption.
The Canadian Transportation Agency received a dozen complaints after the Free Press revealed in August that Omnitrax was likely breaching the strict federal laws around how companies can abandon railways. The CTA chose one complaint filed by an NDP caucus staffer, as it had enough context to represent the other 11 complaints.
The railway to Churchill (a town of 900, located 1,600 kilometres north of Winnipeg) washed out May 23, 2017; two months later, Omnitrax said it would not repair the line as it was "not economically viable," prompting a showdown with Ottawa that reached the courts last month.
The CTA can issue fines and even order a takeover of infrastructure that companies abandon or misuse. A year ago, the regulator ordered CP Rail to fix a bridge that caught fire after it tried abandoning it, and compensate a company’s loses for not being able to ship products.
"A railway company cannot permanently relieve itself of its statutory obligations by indirect means by deciding not to rehabilitate a railway line," the regulator ruled.
Omnitrax has tried getting CTA to quash its ongoing probe, saying the Hudson Bay Railway is a separate entity. The company accused the NDP of trying to "pierce some undefined corporate veil" between the two entities. The regulator disagreed, noting Omnitrax officials have spoken on behalf of the railway multiple times.
Omnitrax also claimed the NDP isn’t directly impacted by the railway disruption, and that case law forbids "a free-for-all" for "busy bodies" to file complaints. The regulator dismissed those arguments, saying anybody can complain about a line going out of service, unlike a shipper facing logistical hurdles due to slow or inconsistent service.
Meanwhile, Manitoba NDP Leader Wab Kinew chided the Pallister government Friday for not being the ones to have filed a complaint.
"It took an opposition party to get the job done," Kinew said. "I would say to the premier: there’s still time to put the weight of the province behind this."
Provincial Infrastructure Minister Ron Schuler dismissed it as "grandstanding to generate headlines."
"Preening in front of the media does not achieve real solutions," Schuler wrote Friday in a statement, adding he was "reviewing the legal grounds for filing a lawsuit" against Omnitrax over a 2008 funding agreement — something Ottawa did in November over its own 2008 pact.
Schuler also revealed the province estimated it will spend $69 million this fiscal year on Churchill, after Kinew asked for more specifics on Premier Brian Pallister’s September announcement that he’d spend $500 million on the northern Manitoba town over the looming decade.
Kinew noted the CTA complaint could get Omnitrax to reopen the line, or pay millions in damages.
"This is pretty important for the people of Churchill," he told reporters. "They’re telling me they need the rail line open. It is another piece of pressure and a point of leverage."
When asked repeatedly what power the CTA or any other public level in Canada if the agency issues such an order and Omnitrax doesn’t comply, Kinew dismissed such questions as hypothetical. "The business situation is not an excuse for inaction" by Omnitrax, he said.
Kinew will not speak to the CTA, but NDP staff well-versed in the technical issues at stake is handling the process. The NDP is withholding the name of its staffer, who is not an MLA.
The documents also reveal Omnitrax has agreed to share confidential financial information with the regulator and the NDP staffer, which the company argues will prove it has been losing money on the Hudson Bay Railway and thus cannot pay for its estimated $43.5-million repair.
The NDP employee will have to sign a confidentiality agreement to view the company’s unaudited balance sheet, and statements of cash flow and income from 2014 to 2016.
There will be a video-conference meeting Feb. 15, which is not open to the public. Omnitrax’s attempt to drop the case, and the confidentiality negotiations, has likely delayed the probe past its 85-day target, which would have ended Feb. 27.
dylan.robertson@freepress.mb.canick.martin@freepress.mb.ca
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