Federal government sues Omnitrax

14.11.2017 16:01
By: Matthew Higgs

Omnitrax will issue a complaint under NAFTA

Ottawa, ON (CKLQ) - The federal government has followed through on a threat to sue the owners of a broken rail line in northern Manitoba.

The government filed a statement of claim today that accuses Denver-based Omnitrax of breaking a deal to maintain the rail line that is the only land link to Churchill.

The rail line was severely damaged by spring flooding, Omnitrax has said it cannot afford the repairs, and food and other goods now cost more because they have to be flown in to the community.

The lawsuit seeks 18.8-million dollars in damages under a 2008 deal that the government says requires the company to keep the line running.

The company has served notice of a planned complaint under the North American Free Trade Agreement.

Omnitrax says the federal government has made it impossible for the company to keep the rail line viable.

The document says Ottawa's decision in 2012 to end the Canadian Wheat Board monopoly decimated grain shipments through Churchill and caused business to dry up.

Since the rail line closure, prices in Churchill have gone up, as the cost to buy milk is at $10.89, and 18 eggs cost $6.19