Warming waters revive port plans in Churchill By Christopher Pollon Analysis Business June 6th 2025 #68 of 68 articles from the Special Report: Business Solutions Share this article Shane Hutchins, general manager of Churchill port, is working to upgrade Canada's aging deepwater Arctic facility. 'It's going to need a lot of love,' he says. (Photo by Drew Hamilton for Canada's National Observer)

National Observer

06-06-2025

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Approaching Churchill's port by train, the twin grain towers appear from kilometers away across the tundra.
It's 25 below in April, and Hudson Bay is trapped under a layer of ice as deep as three meters. This tourist town of 850 people and its increasingly strategic port is asleep — waiting for a spring ice breakup that is still months away.
For nearly a century, the port at Churchill has languished as a great western hope, repeatedly dashed — the terminus of North America's rail system at sub-Arctic tidewater — where politics and geography have conspired to make this place more a dead end than the apex of a great trade corridor.
But Churchill's fortunes are changing.
The under-used seaport and its flood-prone rail line have been transformed from a white elephant into a nation-building project — spurred by a new urgency to seek alternative markets in the wake of a US-imposed global trade war.
This year alone, the federal government has pledged $175 million to upgrade the port and the 1,300-km Hudson Bay Railway to communities like Gillam, Thompson and The Pas on or connected to the rail line.
Canada's only deep-water Arctic port in Churchill has been sidelined for years. That's changing as a US trade war looms.
In April, US and European diplomats visited Manitoba — a province now on their radar due to its strategic position at the centre of the continent and its rail links across a vast hinterland rich in grains, critical minerals and other resources exported to the world via Arctic waters that could be nearly ice-free in the summer by the 2050s.
As the sea ice retreats from Hudson Bay and the wider Arctic due to climate change, the historic Northwest Passage could increasingly be open for business.
If Churchill is to become the centerpiece of a third marine trade corridor for Canada, what are the opportunities, and what stands in the way?
Old port, new mission
Shane Hutchins, the port's general manager, drives his pickup truck through the aging facility, pausing occasionally to point to the sights out his window — the hulking concrete grain towers, a dilapidated 1920s-era power house.
'This place is close to 100 years old,' he said. 'It's going to need a lot of love.'
Now 58, Hutchins worked there from 1998 to 2012 during the so-called 'great experiment' when the Jean Chrétien government sold the port and rail line to US rail operator OmniTRAX.
Critics later accused the Denver-based firm of mismanaging the port and railway despite public funding and subsidies — allegations OmniTRAX has denied. (See sidebar below: Bitter Memories)
Arctic Gateway co-chairman and Churchill mayor Mike Spence, an Indigenous businessman and power broker, recalled the lobbying effort to bring the port and railway under local control.
'I went to the government, and I said, 'Bullshit. If anybody is going to have ownership, it's going to be the region," he said. "It's going to be the communities that rely on that rail line, because we have a vested interest.''
Hutchins — who also owns Churchill's only taxi company — left the port to serve a single term as town councillor and spent much of that time criticizing OmniTRAX's Canadian representative in Winnipeg.
Hutchins was hired back in 2023 after the port and its rail line were acquired by Winnipeg-based Arctic Gateway Group (AGG) a few years earlier.
This spring the port's 28 workers will replace the decaying wharf face with fresh wood, and buy a second tugboat.
He plans to hire another 25-30 skilled tradespeople, including mechanical fixers, carpenters, and stevedores who move cargo between rail cars and ships.
Local people will be hired whenever possible, he said, including from Indigenous communities living along the rail line.
Some of those new hires will work in a new building to store zinc concentrates from a mine in northern Manitoba, Hutchins said, adding there are plans to double shipments this year after a successful season moving the metals from Churchill to Antwerp, Belgium.
A letter of intent has also been signed this year between AGG and Saskatchewan's Genesis Fertilizers to launch phosphate and fertilizer imports and exports through Churchill's port.
In Alberta — where resentment over a lack of tidewater access for oil and gas has intensified in recent months — a group of Calgary-based energy and pipeline executives have proposed a ' multi-use energy corridor ' from Alberta to Churchill, including an LNG Plant and export terminal on Hudson Bay.
The twin grain annexes that dominate the port are connected to conveyor belts that lead to the water — a reminder that the port's original role exporting grains and pulses could be revived.
'We have moved 700,000 tonnes of grain a season in the past,' Hutchins said. 'It's still achievable.'
Climate change enabler
What makes expanding the port such a hot topic is that an ice-free Northwest Passage is no longer the 300-year-old dream of explorers — it's happening now.
Ice-free conditions that can support shipping have expanded one day a year since the 1980s, said Feiyue Wang, an expert on the dynamics of Hudson Bay ice.
The current four-month shipping season, from July through October, can now be stretched for as long as six months, due to climate change, said Wang, Professor & Canada Research Chair at the University of Manitoba's Clayton H. Riddell Faculty of Environment, Earth, and Resources Centre for Earth Observation Science (CEOS) in Winnipeg.
'Hudson Bay is on a trajectory to be ice-free year-round,' he said. '[Sea ice] has been the limitation to this third seaway, and why Churchill has never reached its potential.'
Exports from Churchill involve bulk carriers sailing up the centre of Hudson Bay and eastward through Hudson Strait. From there 'it's a straight boulevard to Europe' — faster than from the port of Montreal, he said.
Other experts point to the uncertainty created by US President Donald Trump's public desire to restore US control of the Panama Canal as an additional boon to Churchill.
To be sure, insurance — not ice or geopolitics – is the biggest barrier to extending the Churchill shipping season, Wang said, accusing insurers of being 'stuck in the 1980s.' Beyond October, rates rise dramatically for vessels because insurers rely on ice condition data that is decades old.
A key part of Wang's work at the University of Manitoba is to document and communicate the changing ice conditions to the insurance industry — particularly for routes where waters are increasingly navigable, but ice is present throughout much of the year.
Challenges around insuring Arctic shipping remain a wicked problem, said a 2024 study by the Environmental Law Review.
Lead author Pia Rebelo wrote that insurers need to calculate the premiums for both hull and machinery, and protection and indemnity, in an extreme environment that is completely unpredictable due to climate change.
Given those challenges and the lack of existing data, she wrote, "the practical viability of Arctic shipping remains doubtful." To date, "insurers have paid out more in ship damage that has occurred in the Arctic than they have collected in premiums."
Praying for another boom
Climate change is a double-edged sword for Churchill. It is opening the gateway to ice-free shipping, but also melting the permafrost under parts of the Hudson Bay railway – the critical infrastructure that connects the port to the world.
In 2017, huge spring snowfalls followed by extended, unseasonably warm weather caused flooding that washed out large sections of the track. OmniTRAX declared force majeure and the rail line was inoperable for more than two years, cutting off the rail lifeline to many northern communities with no road access.
If there is an Achilles' heel to the gateway, it's the final stretch from Gillam where the railway line makes an abrupt northward turn to Churchill.
It runs through a bog ecosystem that needs massive amounts of ballast — rock and gravel — to shore up and raise the track above the water line.
This last stretch is also built over permafrost — which is becoming more unstable due to unpredictable warm temperatures.
For Rhoda deMeulles, owner of the Churchill Home Building Centre, a key supplier of building materials from the south to contractors in town and the far north, the debacle that followed the 2017 washout was a near-death experience.
She supplies contractors with building supplies that must first be trucked from Winnipeg to Thompson, then carried by rail to Churchill and all points north — up the Hudson Bay coast to places like Arviat and Whale Cove, into Nunavut and Rankin Inlet.
When the railway line shut down, she almost went bankrupt.
'We suddenly were sending all our building materials to Montreal, putting it in [containers] and sailing it all the way around,' said deMeulles, who worked at the store for 24 years and then owned it for the last 30.
Other staples had to be flown in from Thompson to Churchill – where a 2800m paved runway built by Americans in the late 1940s continues to serve as a critical asset for the Canadian sub-Arctic.
'I was paying $2.77 a pound. It killed us," she said. "We didn't think we were going to make it. That rail line is our life."
Then came COVID, she sighed. 'I'm hoping and praying [the port] will boom again; that's what we need.'
Technology to the rescue?
'Ports are the easy bit,' said Michael Byers, Canada Research Chair in Global Politics and International Law at the University of British Columbia, and author of multiple books on the Arctic.
'Roads and rail-lines to and from Arctic ports are hard, especially now because of melting permafrost and shorter seasons for ice roads,' he said.
An April report by the Macdonald-Laurier Institute, a think tank, questioned the rationale of developing northern corridors. It argued roads and seasonal ports in the Canadian North are "incredibly expensive to build and maintain, and their use case is limited."
Chris Avery, CEO of Arctic Gateway Group – a unit of the OneNorth partnership of 41 Manitoba First Nation and bayline communities which assumed ownership and operation of the port and railway in 2018 – insisted the current route has a future.
'Churchill will never replace the Ports of Vancouver or Montreal,' said Avery.
'The big selling proposition of the Port is that it provides western resources with direct, efficient access to markets in Europe, Africa and South America,' Avery told Canada's National Observer.
'To have a port in the north that helps us assert our sovereignty, connected by rail to the rest of Canada, makes a lot of sense.'
Past problems with flooding and permafrost were made worse by a lack of maintenance, but that's no longer the case.
'We've used half a million tons of ballast rock along the railway. We've replaced about 300,000 railway ties,' he said. 'We manage the bridges, and we manage the culverts.'
Arctic Gateway uses ground-penetrating radar mounted on locomotives to collect GPS-tracked data on the permafrost. It then employs artificial intelligence to analyze the data and identify potential trouble spots on the rail line.
'We have drones flying overhead — not just in the northern parts of the line — looking at the geometry, taking video of the tracks, ensuring levelness of the track, and also looking at all the lands surrounding the track,' Avery said.
May 'erosion' event suspends traffic
Weeks after Canada's National Observer visited, Arctic Gateway announced that 'embankment erosion' on the Hudson Bay Railway just outside of Gillam had caused a suspension of service. And although it was just early May, 'extreme wildfire conditions' had already suspended train service on a spur line north of The Pas.
The erosion is a reminder of the vulnerabilities of the Hudson Bay railway's upper sections – the weakest links in the entire gateway chain – the stability of which could impact the future of the entire trade corridor. That's why there's a plan to establish a second port on the Nelson River not far to the south of Churchill – which does not navigate permafrost to the same degree, but is hindered by massive flows of river-borne sediment.
Feiyue Wang and Barry Prentice, a professor and transportation and supply chain expert at the University of Manitoba's Transport Institute, have both recently suggested that the stretch of rail between Gillam and Churchill needs to be rebuilt on rockier ground to avoid permafrost.
'They built the [upper] rail line essentially through a frozen peat bog, and it's been a problem for 100 years,' said Prentice, who remains a champion of Churchill as a resource gateway, with a major caveat: 'What that whole system needs is billions of dollars in investment, not millions, because you've got to do much more than just fix the railway.'
June 6th 2025
Christopher Pollon
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