The federal government is threatening to sue the owner of a broken rail line that has left people in the northern Manitoba town of Churchill without a land connection to the outside world.
The government says Denver-based Omnitrax has 30 days to fix the Hudson Bay Railway to Churchill or face an $18.8-million lawsuit.
Ottawa says Omnitrax, which bought the rail line from the government in 1997, has a legal obligation to fix and maintain it under a 2008 agreement that included $18.8 million in federal support for repairs and upgrades.
“Notwithstanding that your Sept. 6 letter indicated you would be effecting the necessary repairs to the (rail line), you have since failed to do so, and time is running out with winter’s approach,” reads a letter sent to Omnitrax by Transport Canada Friday.
“As a result of the above, it has become clear to Transport Canada that (the company) is in default of its obligations under … the agreement.”
The rail link was severely damaged by flooding last spring and Omnitrax has said it cannot afford the estimated $43 million in repairs.
For months, goods and people have had to be flown to the subarctic community at a much higher cost. The town of 900 on the coast of Hudson Bay, known for its polar bears and beluga whales, has seen a dramatic drop in tourism numbers as well.
Prime Minister Justin Trudeau said in July that the government was willing to use all options to force Omnitrax to get the line running again.
Omnitrax officials were not immediately available to respond.
Even if Omnitrax was to start repairs immediately, a 30-day time frame is too short, according to a recent report from an independent engineering firm, AECOM.
The report projected 60 days would be needed to get the 250-kilometre stretch of track repaired enough to handle lighter loads, and another 90 or so days next spring to be fully repaired.
The Manitoba government recently increased its subsidy for some food to Churchill and ordered large amounts of propane to be sent by ship to ensure that homes have enough heating fuel to last through the long winter and spring.
Omnitrax has been in talks to sell the rail line to a First Nations consortium, but there is no sign that the deal is close to being done.