Arctic Gateway Group says the Port of Churchill will help diversify Canada's trade links to other countries

Globe and Mail

5 days ago

Less than a year into his new job as CEO of Arctic Gateway Group, Chris Avery is finding himself overseeing what is quickly emerging as a critical cog in fighting the Trump-era trade war.
AGG, which operates the Port of Churchill and the connecting Hudson Bay Railway (HBR) in northern Manitoba, strategically links Western Canada to Arctic waters and from there offers routes to Europe, South America and the Middle East.
The company is aiming to become a vital link between Canada and emerging Arctic routes to help boost interprovincial and overseas trade and to reduce reliance on the United States.
'We're proud that we're part of the national solution … and are supporting our response to what's happening in the U.S.,' said Mr. Avery, who was named chief executive officer last July. 'I think it's really been a great wake-up call to say we need options and we can't be dependent on the U.S., even though they are our closest neighbor and our largest trading partner.'
Stretching for 1,000 kilometres from The Pas in central Manitoba to Churchill on Hudson Bay's western shores, the HBR is also a lifeline for 33,000 people living in isolated areas with limited road access, said Hicham Ayoun, senior communications adviser at Transport Canada.
The Port of Churchill, Canada's only deep-water Arctic port connected to mainland, ships goods such as critical minerals, construction equipment and agricultural and energy products to Southern Nunavut's Kivalliq region and the rest of the world.
Mr. Avery said the Arctic trade route can slash global shipping times.
'The way that the sea lanes are set up and where the port is … allows you to reduce shipping days by upwards of two to three days, versus going to the East Coast or going through the Great Lakes and up the St Lawrence River and so on.'
In a letter to Prime Minister Mark Carney in early May, Manitoba Premier Wab Kinew touted the crucial role the Port of Churchill can play in the Canadian economy and in Arctic security. The letter said the port is at the core of the One Canada Trade Corridor project, which is one of the five initiatives Manitoba is pitching to the federal government to expand Canada's energy exports and critical minerals development through newly constructed all-weather roads and rail links.
HBR and Port of Churchill were previously operated by Denver-based Omnitrax Inc., beginning in 1997. But following a flood in May, 2017, the U.S. company refused to repair a stretch of rail, leading to a legal dispute with the Canadian government over responsibility for the costs. The impasse left Northern communities without rail service and facing skyrocketing prices for goods delivered by plane.
The port and railway were returned to Canadian hands in August, 2018. A partnership of OneNorth – a group of 29 First Nations and 12 communities in Manitoba and Nunavut – and Fairfax Financial Holdings Ltd. acquired them from Omnitrax and commenced repairs, supported by federal funds. The Churchill community welcomed back the first train in November, 2018, after 18 months of shutdown.
Fairfax left the partnership two years later, leaving OneNorth the sole owner of AGG, owned by a partnership of 29 First Nations and 12 communities in Manitoba and Nunavut, Mr. Avery said.
'Americans sitting in Denver really didn't care that Churchill or Indigenous communities in Northern Manitoba were cut off from the South. But our ownership group live and work in the communities … So they will ensure that the infrastructure is invested again in the future,' he said.
Mr. Avery said the company currently employs 150 workers, with more opportunities expected as it expands its operations.
The relaunch of the railway and the port have also strengthened the local economy, benefiting tourism and mining, and allowing people to 'live close to their communities … support their families, and have a good standard of living,' he said.
AGG is still working to upgrade the infrastructure after decades of neglect by Omnitrax. AGG's updates have already reduced travel time by 10 per cent, a saving of three hours between The Pas and Churchill, according to the group's 2024 progress report.
Mr. Avery noted that about 80 per cent of repairs for the HBR are complete.
'We've invested a lot of capital into the railway, so we're very much open for business now. The railway is probably in better condition than it's been for the past 25 years.'
He added that AGG is currently focusing on upgrading and expanding the port, investing in repairing wharfs and decks and conducting analysis to understand how to accommodate larger vessels.
The company marked a milestone in August with the first shipment of critical minerals from the port. This included around 10,000 tons of zinc concentrate from Snow Lake, Man., loaded onto the HBR and cargo vessels, and destined for Belgium.
The group is building a new storage facility to ramp up critical mineral shipments, 'the first new building at the Port after decades of neglect,' according to the report.
Mr. Avery said Europe is a critical minerals major market for AGG. The group plans to transport up to 20,000 tonnes of minerals this year, including potash for food production. New exports will also include sand used in new technologies such as solar panels. Construction equipment, trucks and building materials are instead on the list for Nunavut communities.
The company also plans to make agricultural products a staple of its trade activities, and is currently conducting talks with several partners, Mr. Avery said.
AGG signed recent agreements with Saskatchewan-based Invest Tisdale and Genesis Fertilizer to move grain and fertilizer products across Canada and expand their markets beyond the U.S. through the Arctic route.
Mr. Avery also wants the port to serve Western farmers who are importing products such as phosphate from trading partners beyond the southeastern states of the U.S. to avoid tariffs imposed by Donald Trump.
'What the Port of Churchill and Hudson Bay railway offer is the ability for companies and Canadian farmers to import phosphates from North Africa or the Middle East to Churchill and from Churchill directly to the Western Canadian provinces and our farmers.'
The group's future operations involve more than just commercial aspects. He said AGG is also talking with the Department of Defence about transporting supplies and goods to northern military bases through Churchill's airport.
The CEO said Transport Canada operates the airport, but AGG has access to its facilities and infrastructure.
The federal government announced in March it will invest $175-million over five years to support railway maintenance, enhance the port's security and operations, and encourage potential private investments with the group.
'It is a huge set of infrastructure that helps us assert our sovereignty in the North,' Mr. Avery said. 'These things that we're building are nation-building by nature and also generational by nature because it's not just for the next year or two, it means for our kids' generation and their kids' generation.'