What the closure of an Arctic seaport in Manitoba could mean for Canadian sovereignty

It's always a big deal when a small town loses its largest employer. ButChurchill, Man.,is not just any town and its port is not just any business.

The Port of Churchillis the onlydeepwater link between Canada'sArctic waters and its railroadnetwork. Or at least it was before Monday, when Denver-basedOmniTraxshut it down, offering little warningand even less in the way of an explanation.

• Port of Churchill layoffs 'came out of nowhere,' says town's mayor

The closure stunnedthe town of about 750, where roughly one in 10 people isemployed by the port at some point of the year. The shockwavethenrippleddown the 1,300-kilometre Hudson Bay Railway through railroad communities likeThe Pas, Man.,before fanning out into the grainfields ofnorthwestern Manitoba and northern Saskatchewan.

The closure of this port, however, is not just a regional economic calamity, like a shuttered pulp and paper mill or under-capacity fish-processing plant.

At a time when climate change is opening up the Arctic Ocean to shipping,and powerful nations like Russia and China pose new threats to Canada'ssovereignty, the viability of the only deepwater port connectedto the nation's transportation networkis no small matter.

'Once it's gone, it's gone'

While the Port ofChurchill has struggled economically since its inception, it remains an asset of strategic importance to Canada, even if Ottawa no longer owns it.

"It's actually a real attribute to have a port with a connection to the North American rail grid in the north," said Hugh Stephens, an executive fellow with the University of Calgary's School of Public Policy and a tradeexpert.

While he questions whether grain shipments will ever make the Port of Churchill profitable, he suggested it may be foolish to scrap the Hudson Bay coastlineport at a time when other nations are casting their gaze on the Arctic Ocean.

"There could be an argument to maintain it," Stephens saidin a telephone interview from Toronto. "Once it's gone, it's gone, and that's the real concern.

"Now, if it's not economically viable as a grain-shipping port, before you blow the whole thing up, have a long, hard look at what the strategicvalue could be."

• Port of Churchill layoffs could devastate northern Manitoba economy, ministers say

While climate change already has had a noticeable effect on Arctic waters, the reduction in thickness and prevalence of Arcticsea icehas yet to spark a northern shipping boom.

Container ships are not yet common in Canada's Northwest Passage, which nations such as China view as international waters. Shipping traffic on its far more navigableRussian counterpart, theNorthern Sea Route, has actually diminishedthanks to soft economic conditions, Stephens said.

Factors such as insurance rates, the size of shipping containers and the economy all have a more noticeable effect on shipping than the presence of sea ice, he added, noting that even ice-free Arctic summers wouldextendthe Hudson Bay shipping seasonby only a few weeks.

But the economics of Arctic shipping haven't stopped Russia from developing a series of rail-accessible Arctic ports. It also hasn't prevented China and the U.S.from exploring the concept of Arctic shipping, either, probably as a prelude to ocean-floor resource extraction.

Canada has been slow to bolster its own Arctic presence, even though the former Harper government madeArctic sovereignty a priority. Nanisivik, a deepwatermilitary port on the north side of Baffin Island, was announced in 2007 but won't be finished until 2018. Plans to build anicebreaker capable of plowing through multi-year sea ice have also been delayed.

• Arctic naval facility at Nanisivik completion delayed to 2018

Whether the Trudeau government seesthePort of Churchill as a strategic asset is unknown, as the Liberalgovernment in Ottawatook more than 24 hoursto issue a brief statementabout theclosure.

At the same time, municipal and provincial politicians as well as opposition MPs condemned the surprise move byOmniTrax, whichdeclined touttera peep about the port's closure for more than 24 hours after it informed employees they were being laid off.

'We could have grown it so much better'

It may have been a mistake for the Chrtien government to sell the Port of Churchill to a private interest in 1997, said Dan Mazier, president of Keystone Agricultural Producers, an organization that represents Manitoba farmers.

"We could have grown it so much better," he opined, referring to public stewardship of the port.

Before the sudden closure, OmniTraxwas in the midst of selling the port, along withthe Hudson Bay Railway,to severalnorthern Manitoba First Nations.

In some ways, not much has changed at Churchill since the 18th century, when the Hudson's Bay Company spent decades buildingPrince of Wales Fort across the mouth of the Churchill River only to see the trading post fail to muster up the expected business with the Cree,Deneand Inuit locals. The fortwas surrendered tothe French navy without firing a single shot in defence.

The grain-shipping port only wound up at Churchill after a First World War-eraplan to build theport down the coast,at the mouth of the Nelson River, collapsed in what was then a national scandal.

The port finally opened at the start of the Depression and never met expectations. Itwas overshadowed at Churchill by a Cold War-era airbase which helped enlarge the town's population to more than 6,000 people before it, too, was decommissioned and dismantled.

• Churchill struggles to maintain jobs, population

Churchill isalso home to a defunct rocket range, an offshore shipwreck,thedecaying fuselage of a crashed plane and the eerie foundations of a dismantledvillage built for a group of forcibly relocated Dene.

Residents of the town hope the Port of Churchilldoesn't join the long and haunting list of decaying machines, buildings and infrastructure projects at the edge of Hudson Bay.