New Owners for Hudson Bay Rail Line
The Hudson Bay Rail line is a critical piece of transportation infrastructure for nearly 30,000 people from First Nations, other communities along the line, and the Kivalliq region of Nunavut. It brings security for food, fuel, jobs and the economy. A safe and reliable rail line also provides certainty for industry and supply lines to grow and prosper over the long term.
On August 31, 2018, Arctic Gateway Group Limited Partnership and OmniTRAX Inc. signed a Share Purchase Agreement to take over ownership of the Hudson Bay Rail Company, the Hudson Bay Port Company and the Churchill Marine Tank Farm. The Government of Canada intends to make good on its commitment to northern Manitoba residents to restore rail service.
Repairs to the rail line have begun. Crews are working seven days a week, from sunrise to sunset, making best efforts to restore the rail service before winter 2018. Throughout this process, supports for food, fuel and economic support will remain in place until the rail line is operational.
The Buying Group
Arctic Gateway Group Limited Partnership, comprised of Missinippi Rail Limited Partnership and Fairfax Financial Holdings & AGT Limited Partnership, represents a strong and well-balanced buying group. The consortium brings together First Nations and community ownership and support, along with significant private sector leadership and global investment capacity, and collectively, substantial short line rail operating and shipping experience.
Missinippi Rail Limited Partnership includes community support and ownership stakes from First Nations and non-First Nations communities in Manitoba with potential for Kivalliq communities in Nunavut.
Fairfax Financial Holdings and AGT Food and Ingredients make up the other half of the partnership and bring private sector leadership and experience to the buying group. Fairfax Financial Holdings is one of the pre-eminent investment companies in Canada and AGT Food and Ingredients, headquartered in Regina, is a major supplier of pulses, staple foods, and food ingredients in the world.
This historic collaboration represents a progressive approach toward redefining relationships with First Nations and Inuit people in Canada. It represents an understanding of the significance of the rail line and its importance in the lives of the people in northern Manitoba.
Government of Canada Funding
Government of Canada investment of $117 million is provided through the Western Diversification Program of Western Economic Diversification Canada.
- Acquisition and Repair of the Bay Line and Port Terminal Assets $ 74 million
(Funding is over 3 years – 2018–2019 to 2020–2021)
- Operations and enhancing the commercial viability of the
Bay Line, Port Terminal Assets and Tank Farm $ 43 million
(Funding is over 10 years – 2018–2019 to 2027–2028)
The Government of Canada is also providing a $10 million repayable contribution, due 150 days after the closing date, providing time for the Arctic Gateway Group to secure their own loan on commercial terms.
Notably, under the terms of the arrangement, Arctic Gateway Group will not be providing dividends for at least 10 years. Therefore, the shareholders have no immediate returns on equity and intend to reinvest into the companies and northern Manitoba.
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