NDP government reviewing $18M Manitoba rail port grant PCs made before 2023 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.
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The White House had announced earlier in the week that the US would retain 90% of the profits from the $550 billion US-bound investment and loans that Japan would exchange in return for reduced tariffs on auto and other exports to the US. This would mean that returns would be split 10% for Japan and 90% for the US, according to the White House official, and that it would be "based on the respective levels of contribution and risk borne by each side." Bloomberg News reports: Read more here. Japan said Friday that profits from the $550 billion investment deal with the US will be shared based on how much each side contributes. A government official suggested the US will also put in significant funds, but details of the scheme remain unclear. The White House had announced earlier in the week that the US would retain 90% of the profits from the $550 billion US-bound investment and loans that Japan would exchange in return for reduced tariffs on auto and other exports to the US. This would mean that returns would be split 10% for Japan and 90% for the US, according to the White House official, and that it would be "based on the respective levels of contribution and risk borne by each side." Bloomberg News reports: Read more here. US business activity rises; tariffs fuel inflation concerns US business activity rose in July, but companies increased the prices for goods and services, supporting the view from economists that inflation will accelerate in the second half of 2025 and it will mainly be due to tariffs on imports. Reuters reports: Read more here. US business activity rose in July, but companies increased the prices for goods and services, supporting the view from economists that inflation will accelerate in the second half of 2025 and it will mainly be due to tariffs on imports. Reuters reports: Read more here. It sounds like Trump now has a new minimum tariff rate: 15% President Trump set a new rhetorical floor for tariffs on Wednesday night in comments in a shift that raises the president's baseline rate from 10%. Yahoo Finance's Ben Werschkul writes: Read more here. President Trump set a new rhetorical floor for tariffs on Wednesday night in comments in a shift that raises the president's baseline rate from 10%. Yahoo Finance's Ben Werschkul writes: Read more here. Keurig Dr. Pepper brewer sales volume drops 22%, CEO says tariff impacts 'will become prominent' Keurig Dr. Pepper CEO Tim Cofer said that tariffs are putting additional pressure on the company in an earnings call Thursday, especially when it comes to its coffee business, which KDP expects to be "subdued" for the remainder of the year. "Commodity inflation will build as we roll into the back half and we roll into our higher cost hedges on green coffee," Cofer said. "The tariff impacts will become prominent. And we all know that tariff situation is a bit fluid." Keurig is one of the biggest coffee importers in the US, along with Starbucks (SBUX) and Nestle (NSRGY). The US sources most of its coffee from Brazil, which is set to face 50% tariffs on its products on Aug. 1, and Colombia, which faces a tariff rate of 10%. In Keurig's coffee business, appliance volume decreased 22.6% during the quarter, reflecting impacts of retailer inventory management, and K-Cup pod volume decreased 3.7%, reflecting category elasticity in response to price increases, the company reported. "Our retail partners will likely continue to manage their inventory levels tightly, in particular on brewers," Cofer commented. "And then finally, you know we did a round of pricing at the beginning of the year. We've announced another round of pricing that will take effect next month, and we'll need to closely monitor how that elasticity evolves." Read more about Keurig earnings here. Keurig Dr. Pepper CEO Tim Cofer said that tariffs are putting additional pressure on the company in an earnings call Thursday, especially when it comes to its coffee business, which KDP expects to be "subdued" for the remainder of the year. "Commodity inflation will build as we roll into the back half and we roll into our higher cost hedges on green coffee," Cofer said. "The tariff impacts will become prominent. And we all know that tariff situation is a bit fluid." Keurig is one of the biggest coffee importers in the US, along with Starbucks (SBUX) and Nestle (NSRGY). The US sources most of its coffee from Brazil, which is set to face 50% tariffs on its products on Aug. 1, and Colombia, which faces a tariff rate of 10%. In Keurig's coffee business, appliance volume decreased 22.6% during the quarter, reflecting impacts of retailer inventory management, and K-Cup pod volume decreased 3.7%, reflecting category elasticity in response to price increases, the company reported. "Our retail partners will likely continue to manage their inventory levels tightly, in particular on brewers," Cofer commented. "And then finally, you know we did a round of pricing at the beginning of the year. We've announced another round of pricing that will take effect next month, and we'll need to closely monitor how that elasticity evolves." Read more about Keurig earnings here. The EU's Trump insurance As my colleague detailed below, EU member states voted to impose tariffs on over $100 billion of US goods from Aug. 7. The Financial Times reported that this move that allows the bloc to impose the levies quickly at any point in the future should its trade relationship with the US take a turn for the worse. From the report: Read more here (subscription required). As my colleague detailed below, EU member states voted to impose tariffs on over $100 billion of US goods from Aug. 7. The Financial Times reported that this move that allows the bloc to impose the levies quickly at any point in the future should its trade relationship with the US take a turn for the worse. From the report: Read more here (subscription required). Europe approves $100B-plus tariff backup plan A report in the Wall Street Journal on Thursday said that the European Union has now approved its retaliatory tariff package on US goods that could start in August if no trade agreement is reached. The EU announced on Wednesday that it will hit the US with 30% tariffs on over $100 billion worth of goods in the event that no deal is made and if President Trump decides to follow through with his threat to impose that rate on most of the bloc's exports after Aug. 1. The US exports, which would include goods such as Boeing (BA) aircraft, US-made cars and bourbon whiskey would all face heavy tariffs that match Trump's 30% threat. The approval of the package comes despite the growing optimism that the US and EU will reach a deal that would put baseline tariffs on the bloc at 15%, matching the level the US applied to Japan. The EU is keen to reach a deal with the US but as a cautionary measure has approved 30% tariffs if a deal is not made. A report in the Wall Street Journal on Thursday said that the European Union has now approved its retaliatory tariff package on US goods that could start in August if no trade agreement is reached. The EU announced on Wednesday that it will hit the US with 30% tariffs on over $100 billion worth of goods in the event that no deal is made and if President Trump decides to follow through with his threat to impose that rate on most of the bloc's exports after Aug. 1. The US exports, which would include goods such as Boeing (BA) aircraft, US-made cars and bourbon whiskey would all face heavy tariffs that match Trump's 30% threat. The approval of the package comes despite the growing optimism that the US and EU will reach a deal that would put baseline tariffs on the bloc at 15%, matching the level the US applied to Japan. The EU is keen to reach a deal with the US but as a cautionary measure has approved 30% tariffs if a deal is not made. Trump tariffs wreaking havoc in Brazil's citrus belt Reuters reports: Read more here. Reuters reports: Read more here. South Korea weighs US investment pledge to trim auto tariff Trade discussions between the US and South Korea have led both sides to investigate the idea of creating a fund to invest in American projects. A report said this possible deal would be similar to the agreement Japan struck Tuesday with President Trump. The details of the plan are still not clear, but the US has been seeking pledges totaling hundreds of billions of dollars. However, further talks on a deal between the two sides may have to wait as a trade meeting between the US and South Korea has been postponed after Treasury Secretary Scott Bessent became unavailable due to a scheduling conflict, South Korea's Finance Ministry said Thursday. Bloomberg reports: Read more here. Trade discussions between the US and South Korea have led both sides to investigate the idea of creating a fund to invest in American projects. A report said this possible deal would be similar to the agreement Japan struck Tuesday with President Trump. The details of the plan are still not clear, but the US has been seeking pledges totaling hundreds of billions of dollars. However, further talks on a deal between the two sides may have to wait as a trade meeting between the US and South Korea has been postponed after Treasury Secretary Scott Bessent became unavailable due to a scheduling conflict, South Korea's Finance Ministry said Thursday. Bloomberg reports: Read more here. Hyundai Motor warns of bigger hit from US tariffs after Q2 profit fall Hyundai Motor ( HYMTF) reported a drop in second-quarter operating profit on Thursday. The company cited US tariffs on vehicles and parts as the reason for the decline and that President Trump's trade war had weighed on its bottom line, the automaker also warned of a bigger impact in the current quarter. The group's South Korean shares fell 2% Thursday. Reuters reports: Read more here. Hyundai Motor ( HYMTF) reported a drop in second-quarter operating profit on Thursday. The company cited US tariffs on vehicles and parts as the reason for the decline and that President Trump's trade war had weighed on its bottom line, the automaker also warned of a bigger impact in the current quarter. The group's South Korean shares fell 2% Thursday. Reuters reports: Read more here. Trump lifts tariff baseline rate, warns countries face 15-50% range President Trump appears to have raised the minimum US tariff rate to 15%, up from 10%, as he prepares to set new reciprocal tariffs before his Aug. 1 deadline. 'We'll have a straight, simple tariff of anywhere between 15% and 50%,' Trump said Wednesday at an AI summit in Washington. 'A couple of — we have 50 because we haven't been getting along with those countries too well.' Trump's latest statement that tariffs would begin at 15% is a new twist in his efforts to impose duties on almost every US trading partner. The US and Japan reached a trade agreement this week of 15%, which could be one reason why the US president has decided to increase the baseline tariff rate. The European Union said on Wednesday that it is getting ready to impose 30% tariffs on over $100 billion worth of US goods if no deal is made and if Trump decides to follow through with his threat to impose that rate on most of the bloc's exports after the Aug. 1 deadline. Reports from The Financial Times on Wednesday have said that the EU and the US are now closing in on a 15% trade deal on European imports. Bloomberg News reports: Read more here. President Trump appears to have raised the minimum US tariff rate to 15%, up from 10%, as he prepares to set new reciprocal tariffs before his Aug. 1 deadline. 'We'll have a straight, simple tariff of anywhere between 15% and 50%,' Trump said Wednesday at an AI summit in Washington. 'A couple of — we have 50 because we haven't been getting along with those countries too well.' Trump's latest statement that tariffs would begin at 15% is a new twist in his efforts to impose duties on almost every US trading partner. The US and Japan reached a trade agreement this week of 15%, which could be one reason why the US president has decided to increase the baseline tariff rate. The European Union said on Wednesday that it is getting ready to impose 30% tariffs on over $100 billion worth of US goods if no deal is made and if Trump decides to follow through with his threat to impose that rate on most of the bloc's exports after the Aug. 1 deadline. Reports from The Financial Times on Wednesday have said that the EU and the US are now closing in on a 15% trade deal on European imports. Bloomberg News reports: Read more here. EU, US reportedly close in on trade deal The Financial Times reports: And more from Bloomberg: Read more here. The Financial Times reports: And more from Bloomberg: Read more here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
