NDP government reviewing $18M Manitoba rail port grant PCs made before 2023 election

Yahoo

5 days ago

Manitoba's finance minister says the province is reviewing what he called a "mysterious" decision by the former Progressive Conservative government to give $18 million to a company planning to develop a rail port south of Winnipeg, without any public disclosure, only five weeks before the last provincial election.
On Aug. 29, 2023, Heather Stefanson's PC government issued the $18-million grant to JohnQ Public Inc., a company owned by 12 rural Manitoba municipalities, to develop a regional rail port in the rural municipality of Ritchot.
The cash was intended to allow JohnQ to purchase land west of Highway 75 for the rail park, and conduct engineering and environmental assessments, according to the province.
The Stefanson government did not issue a press release about the grant. One week later, the then premier kicked off the campaign period for the October election, which the PCs lost to Wab Kinew's NDP.
"That's kind of mysterious, when a government sends $18 million out the door," NDP Finance Minister Adrien Sala said in a Thursday interview in his office.
"It is extremely unusual to issue a grant of that magnitude without communicating anything to Manitobans."
Several provincial departments are now trying to answer questions about the grant for the rail port, Sala said, which could require the construction of a new overpass on Highway 75, as well as a ring dike around the project to protect it from a one-in-200-year Red River flood.
He also compared the grant to Stefanson government efforts to approve a silica sand mine licence during what's referred to as the caretaker period — after the PCs lost the election, but before the NDP assumed office.
"We need transparency when it comes to decision making. Manitobans deserve to know how that $18 million was spent, and we're going to get some answers," said Sala.
'Fishing expedition': Tories
He did not say why the province is asking questions about the project now. Weeks after the 2023 election, Jamie Moses — the NDP minister for business, mining, trade and job creation — said the province was reviewing economic development projects that he said did not receive proper scrutiny by the former PC government.
Sala said the review is sparked by the size of the grant, the lack of public disclosure and questions about what the province will receive in exchange for the $18 million.
"The issue here is that we have no clarity over what that prospective return is, and when you pair that with the lack of transparency over how this went down, that's a concern," he said.
JohnQ Public is already under NDP government scrutiny. In April, the Kinew government asked Manitoba's auditor general to review a $100-million daycare construction program, initiated by the former PC government.
JohnQ project managed that with the help of Boom Done Next, a company co-owned by Marni Larkin, the director of the PCs' 2023 re-election campaign.
In a statement, the now Opposition PCs said they welcome the results of any scrutiny of the JohnQ Public rail port grant.
"The NDP's current fascination with JohnQ Public is nothing more than a fishing expedition," said Wayne Ewasko, the Tory MLA for Lac du Bonnet.
"Our PC government, along with the federal Liberal government, provided funding for hundreds of desperately needed child care spaces and other projects in the capital region."
Announcement 'on the horizon': JohnQ CEO
But the finance minister also said it's unclear what else the province will have to pay for to allow the rail port to proceed.
"There's potential need for a new ring dike. There is a new need for an overpass. These are things that can be in the range of hundreds of millions of dollars," said Sala.
"As we look at the decision that was made here, we have to understand what the implications are."
A progress report prepared by JohnQ Public for the NDP government in July 2024 stated the company was negotiating an agreement with Burlington Northern Santa Fe Railway, also known as BNSF, to serve as an anchor tenant and rail operator at the new rail port.
BNSF, which operates a north-south rail line that terminates in Winnipeg, did not respond to a CBC News request for comment.
Colleen Sklar, John Q Public's CEO, said Thursday in a statement she can't discuss the proposed Ritchot project because all the parties involved "remain under a non-disclosure agreement."
Sklar said "a significant announcement is on the horizon" that "represents a transformative investment and an exciting new chapter for our region."
She did not respond to a subsequent request for comment on Sala's statements about the grant.
John Q Public board chair Brad Erb, who is also the reeve of the RM of Macdonald, said he was not available for comment on Friday.
CentrePort, an existing multi-modal trade area that straddles the border between Winnipeg and the RM of Rosser, also includes a 270-hectare rail park that is in the process of being developed.
CentrePort CEO Carly Edmundson declined to comment on the public funding for the Ritchot project or how it would affect CentrePort.
Ken Mulligan, the reeve of the RM of Rosser, said there are a number of projects that aim to capitalize on Manitoba's transportation connectivity and central location.
"With the growth and success of CentrePort being recognized across the country, as well as the focus on trade, it makes sense that many are thinking about their growth strategies," Mulligan said in a statement.
Sala's office said if the Ritchot rail port does not proceed, there are provisions in the funding agreement that allow the province to demand JohnQ Public transfer the title of the properties it bought to the province or a third party.