November 14, 2017 1:47 pm

OmniTrax responds to federal lawsuit, filing complaint under NAFTA

The Omnitrax rail line to Churchill was badly damaged due to spring flooding in 2017.

Omnitrax / Supplied
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OmniTrax is filing a motion in court right as Ottawa prepares to sue the Denver-based company over the washed out rail line up north.

The rail line is the only year-round access to Churchill and has been out of commission since May because of spring flooding.

Since then, the beleaguered town has been caught in the crossfire of a blame game between Ottawa and OmniTrax, each pointing the finger at the other over why nothing has been done to repair the line.

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READ MORE: Transport Canada ready to move forward with Omnitrax lawsuit over Churchill rail line

On Monday, Transport Canada indicated that it will move forward with a lawsuit after giving OmniTrax an ultimatum last month.

But less than 24 hours later, OmniTrax filed a notice of intent in Ottawa, wishing to submit a claim under the North American Free Trade Agreement (NAFTA).

In the filing, OmniTrax pinned blame on the federal government, pointing to the decision to end the Canadian Wheat Board’s monopoly in 2012. The filing said that decision drastically cut grain shipments through the Port of Churchill, which severely damaged the viability of the port and rail line in Churchill.

“In short, notwithstanding repeated promises of support at the most senior levels, the Government of Canada has abandoned the Port and the Hudson Bay Railway and reneged on its decades-long commitments to sustain them,” the court filing said.

The company is seeking compensation because they feel that, as a NAFTA investor, “Canada has violated OmniTrax’s right to fair and equitable treatment.”

READ MORE: Justin Trudeau: Feds will use all options to make Omnitrax pay for Churchill rail repairs

OmniTrax still wants to come to an agreement with Ottawa over fixing the line and selling it, the Port of Churchill and other assets to either the government or a third-party. If that proves unsuccessful, the filing indicates the company will sue for $150-million in damages.

“We are disappointed that it has come to this, after having attempted countless times over the past several months to find a viable long-term solution,” OmniTrax president Merv Tweed said in a statement. “At every turn, our efforts have been stalled, obfuscated or ultimately sabotaged by the federal government. We view this NAFTA claim as a last resort.”

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